Health Insurance Thirst Mandate

His Benevolence:   I have decided to banish thirst from the land.

Advisor:   Of course Sire. Tell me more.

His Benevolence:   All health insurance will henceforth include unlimited purchases of refreshing drink, like Coke, Pepsi, and 7-Up. The peasants will slake their thirst and be reimbursed by the insurance companies. No co-pay.

Advisor:   Your name will be legend. Sire, will you be paying for this bounty?

His Benevolence:   The insurance companies will pay.

Advisor:   Yes Sire. To do so, they will have to collect more from the peasants. Probably much more, to satisfy the peasant's unbounded thirst. Will you be lightening your taxes?

His Benevolence:   Shall you feel the whip? The taxes remain.

Advisor:   Of course Sire. The peasants will have to do their best in their gratitude.

His Benevolence:   Whatever. Let it be so. I now grow tired of this subject.

Advisor:   I will inform the scribes.

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Medical Necessity vs Mandates
11/18/10 - InsureBlog
Washington state mandated birth control as "a medical necessity" to be covered by health insurance. So, premiums for everyone will go up to pay for the additional services.

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Free Birth Control
07/26/11 - John Goodman's Health Policy Blog

Free birth control isn’t really free. It will raise insurance costs. How mandates for free services work in reality.

[edited, restated]:  New individual policies sold under ObamaCare would offer new benefits used by more participants. This would increase the average premium by 27-30%, assuming other factors are constant.

The new coverages will cost 18-21% in added premium, and lowered cost-sharing (no copay) will increase use of these services for an additional 9% in premiums.

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Company Paid Health Insurance is Part of Your Salary

People are already personally paying for their "employer-paid" insurance. They don't buy it directly so (1) it doesn't attach to them when they change jobs, (2) and they can't shop for the insurance they might want.

Medicare Myth: Low Administrative Cost

Busting the Adminstrative Cost Myth
07/03/09 - Real Clear Politics by Tom Bevan

Bevan looks at statements by Paul Krugman and Jonathan Alter.

[edited] Alter: The administration of Medicare is a miracle of low overhead, and a model of what government can do right, despite all the fraud and abuse. 3% of Medicare's premiums go for administrative costs, compared to 10% to 20% of private-insurance premiums.

Henry Stern below reports that private insurance administrative costs are 12% of total health care costs paid by them, not the "10-20%" exaggerated above.

Note that Alter praises Medicare by calling the overhead figure a miracle. Even he hardly believes that figure. I suppose a miracle doesn't require investigation or explanation. Government just does this better; they are masters at administration! Bevan debunks this:

[edited] The miracle of Medicare administrative efficiency is really just a statistical sleight of hand.

• Medicare serves a population that is elderly and receives much more medical care, making administrative costs smaller as a percentage of total costs.
• Private insurers have a number of "administrative costs" that Medicare does not have, like state taxes of 2-4% on health insurance premiums. These can't be reduced by better administration.
• On a per-person basis between 2001-2005, Medicare's administrative costs were 24.8% higher than private insurers.

Again, Medicare's patients are sicker, so we would expect somewhat higher administrative costs per person as compared to all insured people. I can't know from these figures if 24.8% higher costs are justified by this sicker population.

Read more ...

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Busting the Myth of Medicare's "Low Administrative Cost"
07/02/09 - RightWingNews by McQ

A fine summary and analysis of the above post by Tom Bevan, with a link to more information from John Stossel.

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Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance
06/25/09 - Heritage.org by Robert A. Book, Ph.D.
Via Roger's Rules

[edited] Advocates of a public health care plan say that Medicare has administrative costs of 3% (6-8% including support from other government agencies), compared to 14-22% for private health insurance through employers, and even more for individual insurance.

Advocates say government is just more efficient, and claim that private insurers impose excess costs through marketing, spending to deny claims, high executive salaries, and unrestrained profit.

But, Medicare's administrative costs per person are actually higher than those of private insurance. Higher, despite that private companies incur costs that do not apply to Medicare. Recent history predicts that switching 200 million Americans to a public plan will increase administrative costs by several billion dollars.

The bulk of administrative costs are incurred per-person. Medicare beneficiaries average more health care services than the privately insured. Dividing administrative costs by total medical costs gives Medicare a smaller percentage merely because it administers more medical expense per person.

Administrative costs per person in 2005: Medicare $509, private $453.

For years 2000-2005, Medicare's administrative costs per person were from 5% to 48% higher than private costs (see Table 1 in the article). This, despite "administrative" expenses included in private plans which Medicare does not have. These include state health insurance taxes averaging 2% (as high as 4%), and the cost of non-claim health care expenses, such as disease management and on-call nurse consultation.

Note that the costs of marketing and profit, cited by pubic plan advocates as big expenses, are included in the figures for private insurance costs.

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Public Plan or Bust
07/03/09 - InsureBlog by Henry Stern

Stern gives a view of healthcare proposals from the side of an agent offering private insurance. He describes the incentives and pressures on employers.

[edited] All protestations to the contrary, it certainly appears that our political class is dead-set on making the Public Plan the only plan.

Our best guess: employers will quickly drop their group plans altogether, leaving millions of previously privately insured folks to hop onto the new Public Plans.

A similar program in Massachusetts has led to major shortages and cost overruns, while doing nothing to address the underlying problem of escalating health care costs. Regardless, the plan makes it a "no brainer" for medium and large businesses to delete their group insurance plans:

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The Decision to Opt Out of Medicare
07/08/09 - by Dr Alan Dappen (Via Instapundit)

Medicare claims very low administrative expenses, but doesn't count the administrative burden imposed on doctors. Even fines should be included. Doctors must charge more to cover these expenses, refuse Medicare patients, or close their practices.

[edited] Our medical practice cannot afford to accept medicare patients. Medicare won’t pay for phone or email consultations, barely pays for an office visit, and far underpays to cover a house call.

These services are critical to our medical practice. Medicare would require us to hire too many staff to do too much paper work and administration. Medicare has too many regulations. We can’t understand a lot of them, and Medicare doesn’t seem to understand them either, most of the time.

If I accepted Medicare, then they would have the right to audit our notes and then fine us for non-compliance, for infractions that are not readily clear. Their auditors are paid for every infraction they find, so the temptation to levy fines is irresistible.

Fundamentally, Medicare does not focus on what is most important: practicing effective and efficient medicine to maintain the good health of our patients. Medicare’s paltry reimbursements are coupled with regulations impossible to satisfy. This would not allow us to offer a complete service to our patients, wellness care and the time needed to understand each patient’s unique medical needs and circumstances.

( There is more )

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A 2-minute video clip shows Rep. Jan Schakowsky (D-IL) on 4/18/09 speaking at a rally for Obama's healthcare reform. Schakowsky is emotional and determined.

[edited] (1:23) Those of us who are pushing for a public health insurance option don't disagree with the goal [of a single payer government health plan]. This is not a principled fight. This is a fight about strategy for getting there, and I believe we will.

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What They Sell Versus What They Really Want!
08/02/09 - Economic Swim

A 2 minute video of President Obama's remarks past and present, about a goverment option for healthcare leading to a government run, single payer system. I think the idea is that the government run option will be fair, because it will be, in time, the only option that there is.

Lack of Competition in Health Care Insurance

Health care reform: The real problem is lack of competition
06/11/09 - St. Louis Post-Dispatch by David C. Rose

[edited] The Obama Administration is moving ahead on health care reform. Obama's plan will push nearly all Americans into government-provided health insurance. That is not a good thing. The problem with American health care is too little competition.

There is justifiable concern about the uninsured. Most Americans end up getting health care when they need it, but the current approach produces incredible anxiety and is ridiculously inefficient.

There is rising frustration with the increasingly shabby way insurance companies treat patients. Patients can't do what restaurant patrons do when they receive poor service, which is to go elsewhere. Most health insurance is tied to a job, so most patients are stuck with their insurance company. And it shows.

The Obama administration's plan will produce less competition. But, the solution is more competition.

Why is the health insurance market so uncompetitive, unlike other insurance markets? During World War II, a tax break was granted to non-wage benefits such as employer-paid health insurance premiums. Over time, this cost saving tied most American health insurance to employment. This forces patients to fire their employer before they can fire their insurance company. So, we get poor treatment from insurance companies.

For true competition in health care, it must be possible for individuals to fire their insurance company. This requires extending the tax break on employer-provided health insurance to all health insurance, including privately purchased policies.

Medicare is a good deal partly because the government drives a hard bargain with health care providers by offering artificially low payments. In a competitive market of many insurers, no one insurer could do this.

Artificially low payments don't cover the full cost of procedures, so health care providers shift costs to everyone else. In other words, the lack of competition in today's market leads to higher insurance costs for people who aren't old enough to qualify for Medicare. Extending Medicare-like insurance to everyone won't work, because no one will remain to pay the shifted costs.

[ The same applies to emergency room (hospital emergency department) prices. The law EMTALA forces ER's to treat all patients equally regardless of ability to pay. They must shift these costs onto those who can pay. This produces the amazing $10 ER aspirin. -ag ]

In a competitive market, driving such hard bargains is impossible, so prices reflect actual costs. The Obama administration plan will give us the worst of both worlds.

• Artificially low premiums will drive most private insurance out of business.
• There will be no place to shift costs.
• Shortly, we will have no reduction in cost from cost shifting.
• We will have substantially less competition.
• Less competition will result in higher actual costs.

This has been the experience in countries with nationalized health care. Many have an even worse looming entitlement problem than the United States.

The better solution is to give the same tax-free treatment to both individual-purchase and employer-provided health insurance. That would indirectly reduce the costs for covering the uninsured, which is the other major problem in American health care.

It is now very difficult to purchase insurance if you are not employed or if you work for a very small employer. Once insurance migrates out of large employer pools, sufficiently large pools will become possible with individualized insurance. Customers then would be able to vote with their feet if they are unsatisfied, and those who don't work for large employers no longer would have to pay higher premiums than everyone else.

There still would be some uninsured people. That could be handled directly through insurance vouchers. A voucher program would further eliminate distortions and reduce costs, not just shift costs.

A successful example is food stamps, which have essentially eliminated the problem of hunger in America. Food stamps are vouchers that provide direct payments while preserving competition. Small wonder they work so well.

A society may decide to provide benefits to people. The wrong way is to force the producers of those benefits to raise their prices to cover the extra costs. The right way is to give vouchers to those who are favored. The political problem is that vouchers reveal the value of the benefits, rather than hiding those benefits within the market.

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ER Medicine and Bureacracy
08/31/08 - MDOD by 911DOC

Medicine becomes more expensive, harder to do, with worse outcomes, as government imposes intrusive regulation and arbitrary quality measures, despite any good intentions. Government Motto: "You say you are a caring doctor, so treat the poor for free."

Does no insurance cause trauma?

10/06/08 - M.D.O.D by 911Doc   --> Source

[edited] David Noonan (not Danny) at Newsweek draws conclusions from a recent medical study that shows uninsured patients are more likely than insured patients to die in the hospital, especially from trauma.

He doesn't mention the obvious conclusion, that those who choose to go without insurance probably make other bad decisions (like driving drunk, snorting cocaine, or smoking). Mr. Noonan concludes that it is, in fact, a lack of insurance that kills people.