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Political rant, thanks for hearing me out.

July 27, 2012

I get asked a lot about the “Obama-care” law.  Mostly because one of my part time jobs is in the Health Care Industry.  (EMS in Cleveland Metro Area)

Here it is in a nut shell: “It won’t work.”

Thanks for reading.

 

No, really here is why. First the law makes people buy a product from a private company or non-profit group or face a fine for not buying a service.  This is being argued as Constitutional because of the “interstate commerce clause”, that gives the Congress the power to regulate interstate commerce.

The problem is if you don’t buy something, how is not buying the service crossing state lines?  Ok, if logic does not work, then we have to ask what saying Yes means to other potential laws?  IF making people buy a service, even if they don’t want it or don’t want what is offered, is ok what makes it unlikely that such power won’t be abused?  If we can make people buy insurance or go to jail, then why can’t Congress make people buy Chevy Volts?  Or buy whole life insurance?

After all, whole life insurance crosses state lines, works best if everyone had it.

Now people do try to point out “you have to buy Social Security, Medicare and Medicaid”.  No, you, don’t.  You have to pay Social Security TAXES.  You don’t buy Social Security.  Because Social Security is a TAX, you can be forced to pay it even if you won’t be allowed to use it.  This is different than a mandate to buy.  Taxes are 100% Constitutional and can’t be more than what you earn.  To work they have to be a percentage of your income.  The mandate won’t care what your income is, you will have to buy the insurance or face going to jail.  Medicaid, Medicare, SSI only take a % of your income.

Now, does that mean I would support the Medicaid for all plan (also known as Single Payer)? No, but such a plan would be legal.  [Written before the Supreme Court ruled on the issue. They ruled that the law would be unconstitutional under the Interstate Commerce Clause, but Roberts created out of thin air an argument the Obama and Anti-Obama groups never argued – the penalty for not buying private coverage is a tax because the IRS collects it, sort of – the law bars the IRS from collecting the fine other than with holding a tax return, so if you don’t have money coming back you don’t have to pay the fine.]

The second reason it won’t work is the cost savings won’t be there.  Here is why, the “savings” are worked from a faulty basis.  The claim is often made that Medicaid/Medicare has an administration over head of 3% vs private insurance companies that have 25 to 40% overhead and profit.  Now this is true only because a lot of the overhead of Medicaid/Medicare is hidden and not part of the operation budget.  Medicaid/Medicare does not collect premiums (taxes), the IRS does.  That cost is in the IRS budget, not the Medi’s.  The Medi’s don’t worry about employee retirement, that cost is part of the Office of Personnel Management.  The Medi’s are exempt from accounting rules that private companies are not.  The Medi’s don’t have to worry about lawsuits like private companies.  The Medi’s don’t have to pay taxes on premiums, payments and hold insurance to cover losses, lawsuits, and such.  So, yes, Medi’s have a 3% overhead IF you compare apples to plums.

Those costs will still come up, just hidden.  The other way “savings” would happen is because the supporters ran the numbers assuming that the repayment rates to doctors and hospitals would finally be cut.  See years ago, Bush II rammed through the largest Federal Gov intrusion into the health care system called Medicare part D.  To cover the massive cost, he “paid” for it by cutting the repayments to doctors in three years, 2009.  Which got pushed back to 2010, which got pushed back to 2011, which got pushed back to 2012, and  is likely to be pushed back to 2013. When suddenly they will go through and lower Medicare/Medicaid costs by 40%.  Add in that the CBO counts “savings” from lower costs that will be applied to the debt at the same time counting those “savings” as income given to states to cover the cost of higher Medicaid spending. (meaning you reduce your cable bill by $20 by dropping HBO, announce you saved that money, then give the money to your spouse who buys Cinimax, Stars, and HBO4.)

The reason these cuts were even put in there was the third reason the savings will not come about.  Under Medicare D, the thinking was “if old people can get low cost drugs (well drugs partly paid for by the tax payer) they will take them and stay in better health, lowering the number of visits to the hospital and doctors and need less treatment”.  But it did not work that way.  Instead, they went to the doctors more, doctors were more likely to prescribe drugs, resulting in more complications.

Medicaid was sold on the same thinking, give the poor medical coverage and they won’t end up in the Emergency Department as much.  But it does not work that way.  Instead they end up in the ED more because they know Medicaid will cover it.  But going to the doctors? Takes too much time or they only make appointments in the daytime, the ED is open 24/7.

Many times I’ve taken people who have Medicaid but have not seen their doc in years and his office is just two blocks away.  They have not gotten their kids shots because “the ER won’t give them”, yet they have missed nine wellness appointments that were made for them.

There won’t be savings.  This is why it won’t work.

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