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The Health Care Number You Didn't Hear

Posted by on May. 21, 2011 at 9:27 AM
  • 16 Replies

February 26, 2010

The Health Care Number You Didn't Hear

By David Gratzer

On Thursday, the President gathered with Congressional members to discuss health reform. The President and Democratic leaders spoke of many numbers in their attempt to rebuild support for their proposals.

They mentioned 30 million (the number of uninsured Americans, according to the White House), 17 (the percentage of GDP spent on health care), and 1912 (the year when Teddy Roosevelt first called for universal coverage). But here's the number that no one mentioned: 12. And while all the other numbers are important, the key to reforming American health care rests with that one number, unmentioned.

American health care is expensive. If we spent what Switzerland does, we could cut income tax rates by 80%. And American health care is getting more expensive. Federal government figures indicate that health costs rose by 3.4% last year, roughly double the rate of inflation. It's not surprising, then, that the Obama White House has advocated "bending the curve" of health costs since Inauguration.

And, for the past year, the Administration has attempted to explain to Americans why health costs keep rising. The President spoke in July of Americans being offered two pills - "a red pill and a blue pill" - that are equally good, but one is half the price. Translation: drug companies are greedy. The President toured the Mayo Clinic, one of the best hospital complexes in the world and noted that Mayo physicians are on salary. Translation: your fee-for-service doc is greedy. The President used his September address to a joint session of Congress to bemoan the dearth of competition in the health insurance industry. Translation: insurance companies are greedy (and running a cartel).

If greed is the trouble, the White House seeks to address these woes with a raft of new regulations and rules. Obamacare will cut the profitability of pharmaceutical companies; it will create a committee to pay doctors for what the committee views as quality medicine; it will introduce a new Medicare-style public insurance to compete with private providers. Washington, in other words, will grow. The House version of the White House's proposal would create more than 100 new federal agencies and bodies.

But the problem with American health care isn't greed, its structural. After all, food and clothing are all organized with the profit motive - and the President isn't giving speeches that your butcher is too greedy or that Macy's is overly concerned with the bottom line.

The problem, ultimately, is 12.

A bit of background: American health care is an accidental system. Private coverage - the type most Americans have - has its origins in the wage controls of the Second World War as employers offered rich health-insurance benefits in pre-tax dollars. Public coverage like Medicaid and Medicare, on the other hand, takes its inspiration from the Beveridge report in Britain, drafted in the early 1940s; Lord William Beveridge believed in zero-dollar health care - that people ought to pay nothing at the point of use. Today's American health care fuses these two systems, but with a common economic flaw: people are overinsured, paying pennies directly on every dollar of health service they receive.

The end result: for every dollar spent on health care in the United States, just 12 cents comes out of the individuals' pockets. Imagine what food costs might be if your employer paid 88% of your grocery bill or what a trip to Saks might be like if your company covered the vast majority of the costs of the shopping spree.

Far from addressing the 12 cent problem, Obamacare would exacerbate it. With its rich subsidies, expansion of government programs, insistence that all insurance cover specific services (and some with no copayments at all), Obamacare would pour fuel on the fire of health inflation. It's one reason that even the chief actuary of the Centers for Medicare and Medicaid Services - a federal employee - predicts cost rises under the President's plan.

The White House has been sharp with its critics, demanding that they outline an alternative vision. Here's one: that Washington move decisions away from bureaucrats (be they corporate or government) and empower individuals and families. In other words, American health care should be more like the other five-sixths of the economy where consumers spend more of their own money - certainly much more than 12 cents on the dollar - and get more value for it.

 http://www.realclearmarkets.com/articles/2010/02/26/the_health_care_number_you_didnt_hear_98362.html

Dr. David Gratzer, a physician, is a senior fellow at the Manhattan Institute. He is the author of Why Obama's Government Takeover of Health Care Will Be a Disaster (Encounter Books, 2009).

by on May. 21, 2011 at 9:27 AM
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Replies (1-10):
pvtjokerus
by Ruby Member on May. 21, 2011 at 9:28 AM
Obviously, the unions heard about this because that is why they are asking for a "free" pass from Obamacare.
imamomzilla
by on May. 21, 2011 at 9:31 AM

 BUMP. Need more coffee.

drinking

pvtjokerus
by Ruby Member on May. 21, 2011 at 9:43 AM

U may want to add some more sugar....lol

Quoting imamomzilla:

 BUMP. Need more coffee.

drinking


sweet-a-kins
by Emerald Member on May. 21, 2011 at 9:46 AM
Why would you lie?

Some, that are larger, are getting more time to accommodate

You lose all credibility when you lie


Quoting pvtjokerus:

Obviously, the unions heard about this because that is why they are asking for a "free" pass from Obamacare.

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stormcris
by Christy on May. 21, 2011 at 9:51 AM

100% is the amount coming out of my pocket. But, I would like to see how they came to the 12 cent figure. 

pvtjokerus
by Ruby Member on May. 21, 2011 at 10:03 AM

Well, let's start with the SEIU; the AARP; the United Federation of Teachers, that’s in addition to the 27 new waivers for health care or drug companies and the 31 new union waivers Obama’s Department of Health and Human Services approved.


Quoting sweet-a-kins:

Why would you lie?

Some, that are larger, are getting more time to accommodate

You lose all credibility when you lie


Quoting pvtjokerus:

Obviously, the unions heard about this because that is why they are asking for a "free" pass from Obamacare.


mommaoftwo
by Bronze Member on May. 21, 2011 at 10:13 AM
We pay $300 a paycheck for horrible insurance but it is the best plan thy have. We are looking into getting state. Insurance as a suppliment, on top of our paycheck we have a $1000 deductible and after that we pay 10%.
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Della529
by on May. 21, 2011 at 10:15 AM

Others have received waivers also.  This from October 2010.

McDonald's, 29 other firms get health care coverage waivers

Nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.

Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.

 

 

"The big political issue here is the president promised no one would lose the coverage they've got," says Robert Laszewski, chief executive officer of consulting company Health Policy and Strategy Associates. "Here we are a month before the election, and these companies represent 1 million people who would lose the coverage they've got."

The United Agricultural Benefit Trust, the California-based cooperative that offers coverage to farm workers, was allowed to exempt 17,347 people. San Diego-based Jack in the Box's waiver is for 1,130 workers, while McDonald's asked to excuse 115,000.

The plans will be exempt from rules intended to keep people from having to pay for all their care once they reach a preset coverage cap. McDonald's, which offers the programs as a way to cover part-time employees, told the Obama administration it might re-evaluate the plans unless it got a waiver.

McDonald's and Jack in the Box didn't immediately respond to requests for comment.

The waiver program is intended to provide continuous coverage until 2014, when government-organized marketplaces will offer insurance subsidized by tax credits, says HHS spokeswoman Jessica Santillo.

The regulations would have hit some insurance plans for young adults in the universal coverage program run by the state of Massachusetts. The program, enacted in 2006, has a plan for individuals ages 18 to 26 who can't get coverage through work, covering about 5,000 people. The waiver obtained by the state "will give us time to implement the transition plan in a manner designed to mitigate premium increases," says Dick Powers, a spokesman for the state program.

The biggest single waiver, for 351,000 people, was for the United Federation of Teachers Welfare Fund, a New York union providing coverage for city teachers. The waivers are effective for a year and were granted to insurance plans and companies that showed that employee premiums would rise or that workers would lose coverage without them, Santillo says.

http://www.usatoday.com/money/industries/health/2010-10-07-healthlaw07_ST_N.htm

 

ThatTXMom
by Platinum Member on May. 21, 2011 at 10:29 AM

*shakes head*  Funny how the thing you push for is sometimes the thing you don't want applied to yourself. 

sweet-a-kins
by Emerald Member on May. 21, 2011 at 10:36 AM
Can someone pleas highlight the portion that says UNTIL 2014

I'm on my cell...


They are not getting exempted as the op is lying about....they have utility 2014


Quoting Della529:

Others have received waivers also.  This from October 2010.


McDonald's, 29 other firms get health care coverage waivers







Nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.

Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.


The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.


Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.


 







 


"The big political issue here is the president promised no one would lose the coverage they've got," says Robert Laszewski, chief executive officer of consulting company Health Policy and Strategy Associates. "Here we are a month before the election, and these companies represent 1 million people who would lose the coverage they've got."


The United Agricultural Benefit Trust, the California-based cooperative that offers coverage to farm workers, was allowed to exempt 17,347 people. San Diego-based Jack in the Box's waiver is for 1,130 workers, while McDonald's asked to excuse 115,000.


The plans will be exempt from rules intended to keep people from having to pay for all their care once they reach a preset coverage cap. McDonald's, which offers the programs as a way to cover part-time employees, told the Obama administration it might re-evaluate the plans unless it got a waiver.


McDonald's and Jack in the Box didn't immediately respond to requests for comment.


The waiver program is intended to provide continuous coverage until 2014, when government-organized marketplaces will offer insurance subsidized by tax credits, says HHS spokeswoman Jessica Santillo.


The regulations would have hit some insurance plans for young adults in the universal coverage program run by the state of Massachusetts. The program, enacted in 2006, has a plan for individuals ages 18 to 26 who can't get coverage through work, covering about 5,000 people. The waiver obtained by the state "will give us time to implement the transition plan in a manner designed to mitigate premium increases," says Dick Powers, a spokesman for the state program.


The biggest single waiver, for 351,000 people, was for the United Federation of Teachers Welfare Fund, a New York union providing coverage for city teachers. The waivers are effective for a year and were granted to insurance plans and companies that showed that employee premiums would rise or that workers would lose coverage without them, Santillo says.


http://www.usatoday.com/money/industries/health/2010-10-07-healthlaw07_ST_N.htm

 


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