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Bernie Sanders’ Proposed Tax Hikes To Pay For “Medicare for All”


Stanley Feld M.D.,FACP, MACE

Nothing is free despite Bernie Sanders and other socialists’ promises. “Medicare for All”is proposed to replace private insurance with government insurance as the single party payer.

The government controls of several parts of our healthcare system. All these parts, Medicare, Medicaid and the VA Healthcare System, are financially unsustainable. All, except Medicare for seniors, are unsatisfying for patients.

Each year the Medicare premiums and deductibles for seniors have been increased, services have decreased and reimbursement to providers have decreased. It is past the point of being unaffordable for many patients although it has been invaluable for sick patients who could not possibly afford the cost of care without Medicare.

In reality the government owns these healthcare services, but it does not run these healthcare services. The administrative services are outsourced to the healthcare insurance industry. The healthcare insurance industry, in turn, has figured out how to game the system and take advantage of the government and citizens involved in the system.

Additionally, the inefficiency of government bureaucracy intensifies waste and cost. The estimated cost of Bernie Sanders’ “Medicare for All” is thirty -trillion dollars of ten years. Many believe thirty-two trillion dollars over ten years is a low number. It is also over 90% of the United States’ total ten- year budget at present spending.  

 Bernie Sanders has released a set of tax hike options in order to get some of the money to pay for his fiasco.

These tax hikes would hit American families at every income level and businesses large and small. The proposal increases taxes by $16.2 trillion over the next decade, according to an estimate of Americans for Tax Reform.”

This proposal will cover only half of the thirty-two trillion-dollar estimate.

  1. A 4% increase in payroll tax to employees.

“According to Sen. Sanders’ estimates, this increases taxes on American families and individuals by $3.9 trillion over ten years.”

  1. A new 7% increase in payroll tax for employers.

This tax will hinder business growth. It will decrease employment because it will decrease business spending on employees. It will also increase government spending for entitlements. This tax increase will only provide an estimated 3.5 trillion dollars over 10 years. It will probably result in less than 3.5 trillion because there will be less payroll tax to collect.

Please note Bernie’s numbers between employee and employer payroll taxes do not add up. It is pure fiction.

  1. The proposal would ban employer-provided healthcare insurance and repeal the employer deductions for health care insurance. The net result will be increasing taxes on businesses by over $3 trillion over a decade.

     This adds up to an additional 3 trillion-dollar cost to business not necessarily a three trillion-dollar savings.

  1. Bernie Sanders’ proposal would also repeal Health Savings Accounts, which are utilized by an estimated 25 million American families. Health Savings Accounts are a good deal for middle class families earning between $60,000 to $200,000 a year. Health Savings Accounts would even be more attractive if they were changed to Medical Savings Accounts.  

At present roughly half of the Health Savings Accounts are owned by middle class families.

A key element in a successful reform of the healthcare system is to provide health and financial incentives to citizens. Citizens must become responsible for their health and healthcare dollar in order for healthcare reform to succeed.

Bernie’s plan helps people be less responsible for themselves and more dependent on the government.

Isn’t this exactly what the socialists want? Historically socialism always fails.

  1. The tax deduction for cafeteria plans and the medical expense deduction is also eliminated.
  2. Eliminating Health Tax “Expenditures”

n all, Sanders estimates this will increase taxes on families and businesses by $4.2 trillion.

  1. 70 percent Top Tax Bracket for Ordinary Income and Capital Gains Income


This would give America the highest income tax rate in the world.

“ According to the Tax Foundation, a top 70 percent rate for ordinary income and capital gains income above $10 million will raise $51.4 billion over a decade. After accounting for macroeconomic effects, the proposal would actually cost the government $63.5 billion because of the proposal suppresses investment and economic growth.” In reality the income and negative effect to the government are a small number and insignificant to paying for the cost of “Medicare for All.”

  1. 77 Percent Death Tax

“Sanders proposes raising the death tax rate to 77 percent for inheritances.  

     Currently, the death tax applies to estates over $11 million or 22 million per couple. Over 22 million dollars is taxed at a rate of 40%.

      The death tax is, in reality, a double tax. People have paid tax on the money they have saved already. At the time of death, the government taxes them again on post-tax dollars. The tax should really be called a confiscation tax.

      Bernie Sander’s death tax proposal will increase taxes by $2.2 trillion over ten years. This is an insignificant amount compared to what “Medicare for All” will cost.

  1. Wealth Tax
    “Bernie Sanders proposes an annual wealth tax of 1 percent kicking in above $21 million in assets. Sanders estimates the proposal will increase taxes by $1.3 trillion over ten years.”

      10. Bank Tax

         “ Sanders proposes a tax on financial institutions totaling $800 billion over ten years.”

      11.Broaden the Self Employment Tax
Sanders would require business owners to report more of their business income as salary, increasing the amount of self-employment tax owed. This would increase taxes by $247 billion over ten years.

The total increase in taxes would only result in a $16.5 trillion-dollar payment on a thirty-two trillion-dollar bill. Where will Bernie get the rest of the money? He probably figures the government could print the other $16 trillion dollars. If it does it will decrease the value of the tax increases and an overall cost will be higher than 32 trillion dollars.

There is something seriously wrong with socialistic thinking. I do not believe the majority of American will fall for this serious defect in thinking.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Do Finland’s and Britain’s Healthcare System Work


Stanley Feld M.D.FACP,MACE

 The Finn’s have been frustrated with their highly praised and publicized socialistic healthcare system. Finland’s free healthcare system has received excellent press in Britain. Now citizens in the U.S. are being brainwashed about the success of this system by Bernie Sanders.

Why? Britain’s socialized medicine system is collapsing. The system lost 200,000 nurses since 2010.  

In 2017/18, more than 26,000 nurses left the health service.  Voluntary resignations from the NHS is up 55 per cent.

The number of NHS staff quitting over long hours has tripled in six years. Voluntary resignations citing chronic staff shortages resulting in long hours and poor work-life balance were the largest reason for such nurses quitting the NHS. Primary care physicians are quitting for the same reasons and low reimbursement.

Royal College of Nursing (RCN) acting chief executive, Dame Donna Kinnair, said: “Health and care services are losing thousands of experienced, dedicated nursing staff who feel as if no-one is sufficiently listening to their concerns and patient care is routinely compromised by chronic staff shortages.

The National Health Service is about to lose more nurses and physicians because the National Health Service is about to have to reduce nurses’ pay once again while increasing weekly work hours.

“Finland’s health service has been in a parlous state for decades and it is getting worse.”

Bernie Sanders should not be telling us how great “Medicare for All” will be.

Last year former Social Security and Medicare Trustee Charles Blahous exposed the $32.6 trillion price tag.

“As massive as BernieCare’s estimated $32.6 trillion ten-year price tag is, it would be even more massive if it didn’t assume that U.S. doctors and nurses will simply accept the low pay and poor working conditions that Mr. Sanders has in mind.”

“The 32.6 trillion assumes doctors and nurses in the United States continue to willingly practice medicine if the job comes with lower pay and even more bureaucracy than the current highly regulated system?”

it will create a deficit of more than three trillion dollars a year and not save the 600 billion dollars over ten years promised. Bernie Sanders should know Britain’s and Finland’s free healthcare systems have failed. He should stop lying to the American public.

https://www.zerohedge.com/news/2019-03-12/finlands-government-collapsed-under-weight-socialized-healthcare

Back to Finland and the big Bernie lie. 

Finland has more doctors per capita than the UK but, at the level of primary care, a far higher proportion of these physicians are in private practice that is the case in Britain.

Seventeen percent (17%) of Finnish doctors work solely in the private sector. Most of these physicians are general practitioners. This is twice the percentage of physicians that were in the private sector twenty years ago.

An additional twenty percent of physicians work in the private sector as well and the public sector.  

The bizarre thing is most employers in Finland pay for their workers to have private primary healthcare. Employers do not pay for their employees’ families. The families remain in the public sector.

The public sector is far from free. A family practitioner visit cost 16.10 euros. However, patients only pay for the first three visits and then it is free.

According to Dr. Saarinen of Ula “the more experienced and “better” doctors end up in the private sector, leaving the “inexperienced” and “inefficient” doctors running the health centers.”

 Private practitioners are better paid and work under less pressure than public practitioners.

“A hospital consultation in the public sector costs about €38, and you pay for each night that you spend in the hospital, up to a maximum of €679.”

The free healthcare service in Finland is not national. Municipalities pay for the free service. The result is service in poorer areas of the country tend to have bad health service and limited access to medical care.

Private GPs usually set up practices in more affluent areas where they are more likely to get paid.

It looks like a grim socialized medicine system. No wonder Finns deny the finding they are the happiest people in the world.

In Helsinki there are reports of huge queues at health centres (GP surgeries), waits for appointments of many weeks, and greater and greater demands with less and less funding. In south-eastern Finland, it takes about a month to see a GP. Back in December 2013, it was reported that Finns were increasingly using private doctors in neighboring Estonia to save time and money.”

Dr. Saarinen explains that the system essentially forces people to go private or rely on friends who are doctors.

Finland’s healthcare system has been a mess for at least two decades.

The big question is why in the U.S. do we permit politicians such as Bernie Sanders, OA Cortez, and a complicit mass media get away with the lies about the glory of socialized medicine?

How do we permit our media and our politicians get away with this disinformation?

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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The Concept of “Medicare for All” is Misguided

The Concept of “Medicare for All” is Misguided

Stanley Feld M.D.FACP,MACE

Bernie Sanders (I-VT), has long been touting Finland, Sweden, Denmark and Norway as the shining examples of socialism and socialized medicine. 

 The New York Times reported on a UN study proving Finland is the happiest country in the world. The problem is the Finns do not think the study is accurate.

The New York Times has once again printed fake news to influence readers to believe in the wisdom of “Medicare for All.”

Carl Sandberg said in “The Prairie Years”, “If you tell a lie enough times it becomes the truth.”

https://blogs.scientificamerican.com/observations/finland-is-the-happiest-country-in-the-world-and-finns-arent-happy-about-it/

Bernie Sanders (I-VT) has been hanging his socialistic rhetoric on the success of Finland’s socialist society and especially Finland’s healthcare system which is free healthcare for all. 

Last week Finland’s government collapsed over universal healthcare costs.                                                                                                                                                  

 Similar problems are bedeviling Sweden and Denmark, two other countries frequently held up as models to follow on health care. Finland’s crisis in particular comes as calls for universal health care have grown louder among Democrats in the United States.”

Americans have not heard from the mainstream media about the collapse of Finland’s government or the reasons for that collapse.

Norway is excused from this discussion because Norway has become a very rich country from its North Sea oil income and its restrictive immigration policies. It is the citizen’s sugar daddy along with a 50% tax rat

The Kaiser Family Foundation found that 58 percent of Americans oppose “Medicare for all” if told it would eliminate private health insurance plans, and 60 percent oppose it if it requires higher taxes.

Reuters reported that soaring treatment costs and longer life spans have particularly affected the Nordic countries financial problems.

“Nordic countries, where comprehensive welfare is the cornerstone of the social model, have been among the most affected,” according to Reuters. “But reform has been controversial and, in Finland, plans to cut costs and boost efficiency have stalled for years.”

..Just a few days before Finland’s government collapsed over its inability to foot the bill for its expansive socialist experiment, Sanders took to Twitter in an attempt to shame America.

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“In the United States it costs, on average, $12,000 to have a baby. In Finland it costs $60. We’ve got to end the disgrace of our profit-driven health care system and pass Medicare for all.”

With the collapse of Finland’s government over its inability to financially support its massive socialist agenda, Bernie will undoubtedly do the same thing he always does when socialism (or communism) fails: ignore, obfuscate, and deflect.”

 We only have to remember Vermont’s “Medicare for All” failure.

Bernie Sanders and AOC should read Finland and Sweden’s newspapers to understand that the people are unhappy with free but unavailable medical care. The unhappiness of the citizens historically happens in every socialist state.

If Democrats are successful in getting “Medicare for All” into law, we will face the same dilemma in America’s future.

Finland has been held up as a model welfare state. The distribution of the resulting high taxes is spent on the social issues the politicians think are most important and not what the citizens think are most important.  The majority of the high taxes are spent on education and childcare, not on health care.

The experience of a patient in Finland is very educational. This article appeared in Britain’s Guardian newspaper as Britain struggles with its National Health Services system.

“Why is Finland’s healthcare system failing my family?”

This reporter moved to Finland from the U.K. to experience this highly rated welfare state. Finland receives an extremely positive press in Britain. The British welfare state systems are failing.

“I have moved to from Britain to Finland because it is lauded as the shining example of a successful welfare state.”

https://www.theguardian.com/society/2016/feb/23/finland-health-system-failing-welfare-state-high-taxes

“Imagine going to your nearest doctors’ surgery at 9am on a weekday with your sick six-year-old daughter because you cannot make an appointment over the phone. After your drive to another part of the city, you can’t simply book a time with the receptionist.”

 There is no receptionist. You have to swipe your daughter’s national insurance card through a machine, which gives you a number.

“Then you and your feverish child simply sit and wait. Or rather, you stand, because the room is so crowded that people are sitting on the floor, on steps, or leaning against walls. The numbers come up on a screen every 10 minutes or so, in no particular order so you’ve no idea how long your wait will be as your daughter complains of feeling cold then hot and then cold again.”

Patients get sicker and frustrated waiting for care.

“By 10.45, another patient’s dad exclaims he’s been there since 8.15, he’s had enough, and he’s going to go to a private GP. “You used to just be able to make an appointment with a doctor!” he says angrily.”

You are not waiting to see a physician you are waiting to see a nurse that will determine whether you see a physician assistant or General Practitioner.

At 11.30, you give up and take your daughter to see a private doctor as well, forking out £50 for the privilege.”

Finland’s schools always have the best ranked international student assessment results in the western world; there’s high social equality; all its teachers have master’s degrees.

But unknown to Bernie Sanders, Finland has one of the worst health services records in Europe.

According to an OECD report published in 2013, the Finnish health system is chronically underfunded. The Nordic nation of five million people spent only 7% of GDP on its public health system in 2012, compared with 8% in the UK. In 2012, the report found, 80% of the Finnish population had to wait more than two weeks to see a GP.

America’s healthcare system is becoming unaffordable. When politicians like Bernie Sanders, AOC, and all the announced Democrat candidates for president support “Medicare for All” it sounds easy and appealing. The fact is socialized medicine doesn’t work.

The only system that can work is a system that creates incentives for consumers to be financially and medically responsible for themselves and the creation of rules by the government forcing insurance companies and hospital systems to become competitive in favor of consumers.

Donald Trump knows this. If only our elected officials in Washington wanted to act for the benefit of the citizens who elected them.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Politics of Electronic Medical Records

Politics of Electronic Medical Records

Stanley Feld M.D.,FACP,MACE

The EMR project that President Obama forced on the medical profession in 2009 has not yet produced any evidence that EMR will save the country $350 billion in inpatient care and $150 billion dollars in outpatient care over a 15 year period of time.

The RAND analysts claim that more than $350 billion would be saved on inpatient care and nearly $150 billion on outpatient care over a 15-year period of time. 

The RAND EMR study was wrong. The study sounded good to President Obama because he thought EMRs would enable the federal government to control medical and surgical practices in America.

Unfortunately, data from three other studies, a cardiology group, a Harvard group and Canadian group showed there is no savings difference between paper records and electronic records.

The project has been a $38 billion dollar failure. I predicted the EMR project would fail in 2011. EMRs are a great idea. The EMR projects goals were wrong.

Wall Street Journal article in 2012 stated,  The electronic medical record (EMR) is touted as the key to containing costs, reducing errors, improving quality, and simplifying administration: an “elegant exercise in wishful thinking.

The RAND Corporation study was paid for by all the vested interests stakeholders involved in medical care except physicians and patients.

Allscripts Healthcare Solutions, the Cerner Corporation and Epic Systems of Verona, Wis. are the major EMR software companies who paid for the study.

In February 2009, after years of behind-the-scenes lobbying by Allscripts and others, legislation to promote the use of electronic records was signed into law as part of President Obama’s economic stimulus bill.

GE and the healthcare insurance industry were also major funders of the RAND Study. The Obama administration funded the implementation of the EMR project to the detriment of the healthcare system.

The healthcare system has not contained costs, reduced errors, improved quality or simplified administration. Each category has gotten worse.

I do not think the Obama administration’s primary interest was to fix the existing healthcare system.   If the EMR project hobbled the healthcare system, the population would beg the government to completely take over institute his “Public Option” and subsequently “Medicare for All.” There was no consideration of the fact that that Medicare and Medicaid are unsustainable.

The complete control of the VA Healthcare System has not worked out very well for the government. One important reason for the VA Healthcare System’s failure is the bloated government bureaucracy. Effective medical care takes instantaneous judgement and rapid execution. Government regulations inhibit the process leading to long waiting times and ineffective and costly treatment.

Medicare and Medicaid costs have been unsustainable and are getting worse. Why would a politician think complete government control over 20% of the GDP, the healthcare system, would be any better than a free market system where patients would take responsibility for their healthcare and healthcare dollars?

The government could provide the dollars to the needy with financial incentives attached for all in the system.

Ideal EMR should be for the benefit of physicians and their patients. The EMR should not be only for the financial benefit of healthcare insurance companies, the government,  the pharmacy benefit managers and the software companies.

The EMR project places the secondary stakeholder in the position to judge physicians’ behavior and subsequently penalize them if they do not comply with government regulations and expected results.

The EMR should be a tool to continually educate physicians to help them become better. It should educate patients so they can become professors of their disease and help them avoid the complications of their chronic diseases.

The EMR should not be a tool used by secondary stakeholders to penalize physicians and patients. This will not decrease the ever-increasing cost of healthcare.

At the moment EMRs are relatively useless. A lot of money has been spent by all the stakeholders with very limited benefit. There have been hundreds of examples published by all stakeholders about the defects in the present EMRs that do not allow for an increase in the quality of care and a decrease in the cost of care.

 My ideal EMR along with my ideal medical saving accounts can go a long way toward repairing the healthcare system. http://stanfeld.com/is_an_ideal_ele/

 

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Why Vermont’s Single Party Payer Healthcare Plan Failed

Stanley Feld M.D., FACP,MACE

Vermont’s single party payer healthcare plan was doomed to fail from the onset for several reasons.

Vermont had a Republican governor for eight years. He decided to retire.  Peter Shumlin (D.) won the Democratic nomination for governor after progressive activists demanded that each candidate for the Democratic Party nomination promise to enact single-payer health care if nominated.

Shumlin’s got the nod, won the election. He was anxious to pass the single party payer system.

Vermont’s consultants were Harvard’s William Hsiao and MIT’s Jonathan Gruber.

William Hsiao has spent most of his academic career helping governments install single-payer healthcare systems.

There is little evidence that the systems by developed in Taiwan and other countries by William Hsiao have been successful. They have not been cost effective or sustainable. They have not preserved freedom of choice.

Gruber and Hsiao made the same mistakes for Vermont that they made for America with Obamacare.

Hsiao and Gruber promised that single-payer health care in Vermont could save $1.6 billion over ten years. With that endorsement in hand, Shumlin and the legislature passed Act 48, a law instructing the state to figure out how to finance a single-payer system. They dubbed it Green Mountain Care.

Governor Shumlin said, “If Vermont gets single-payer health care right, which I believe we will, other states will follow,” pronounced Shumlin. “If we screw it up, it will set back this effort for a long time. So I know we have a tremendous amount of responsibility, not only to Vermonters.”

Unfortunately, Americans have a short memory, the short memory promoted by the conformational bias of the traditional mass media toward a progressive agenda.

Progressive Americans and their progressive politicians had better wake up fast. “Medicare for All” does not work.

Medicare does not work in a financially sustainable way for the government or seniors. It was not sustainable in the Bernie Sanders small state of Vermont. It is nice to believe you can provide healthcare benefits for nothing to all. However, nothing is free especially when it is run by central bureaucrats. It has been proven over and over again.

First, bureaucrats and healthcare policy consultants do not understand the medical care system. The history of Vermont’s single- payor story is interesting.

In December 2014 Vermont Governor Peter Shumlin (D.) announced that he was pulling the plug after four years on Vermont’s single-payer, government-run health care system.

“In my judgment,” Governor Shumlin said, “the potential economic disruption and risks would be too great to small businesses, working families, and the state’s economy.”

Rather than saving $1.6 billion the Green Mountain Care would cost an additional 2.6 billion dollars in tax revenue for 2017 alone. The law would require a 151 percent increase in state taxes.

“Fiscally, that’s a train wreck. Even a skeptical report from Avalere health had previously assumed that the plan would “only” cost $1.9 to $2.2 billion extra in 2017.”

“In 2019, Costa estimated that Green Mountain Care would have required $2.9 billion in tax revenue vs. $1.8 billion under pre-existing law: a 160 percent increase in revenue.”

The result should explain why the dream of single-payer health care in the U.S. should be dead for the foreseeable future.

Daily, we read articles calling for “Medicare for All” from progressive politicians running for office.

How stupid do they think Americans are?

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Associations Are  Growing

Stanley Feld M.D. FACP, MACE

Any initiative President Trump and his administration presents to the public is criticized as junk as soon as it is presented. It is criticized without any evidence for the criticism because it does not fit into the Democrat’s narrative of “Medicare for All.”

When the Trump administration rolled out the plan to once again let associations sell healthcare insurance plans to its individual and small businesses Democrats charged that these plans would be worthless.

The mainstream media did not publicize the Trump administration’s initiative. The fact that Obamacare has resulted in higher premiums and deductibles for small businesses and individuals has been downplayed by the mainstream media. In fact, we occasionally see articles declaring that the people like Obamacare. Only twelve million people are insured by Obamacare.

It is not true that people like Obamacare. The fact is premiums and deductible are not affordable for many on Obamacare despite the fact that 85% of the enrollees receive federal government subsidies

The fact is that individuals without healthcare insurance and who do not qualify for Medicaid need insurance. They are stuck buying Obamacare insurance because they do not have any other option. Many have had to go uninsured because they could not afford premiums and deductibles. Many have gotten jobs in our excellent economy where the large employers pay for group healthcare insurance.

The associations’ plans were proposed to provide a less expensive alternative to Obamacare by allowing workers and small businesses to pool together to buy healthcare insurance through the association.

An association, like big corporations, has the ability to negotiate with healthcare insurance companies to lower premium prices and deductible. The tax treatment is also favorable.

The association initiative started in January 2019. Early evidence suggests that the initiative is working out — at least for now.

“The administration’s alternatives, known as “association health plans,” have been covering the same benefits that Obamacare plans do, even though they are not obligated to, according to a new analysis by the industry publication Modern Healthcare and another by AssociationHealthPlans.com.”

 

Just like Obamacare plans, the associations’ plans are paying for prevention, visits the doctor’s office and the hospital, emergency medicine, prescription drugs, maternity care, and mental healthcare.

The plans are also covering people with pre-existing conditions, such as cancer or diabetes.

 “In fact, the plans are required to cover all of the above. This is an aspect of their coverage that was not well publicized by the mainstream media, according to Kev Coleman, president of AssociationHealthPlans.com. “That’s something that was lost in the mix.”

 The requirement is part of Obamacare’s regulations. Since Obamacare has not yet been repealed by Congress the rules will remain.

“Officials in the Department of Labor announced new rules for the plans in June, with some of the plans allowed for purchase beginning in September. Since then, at least 28 plans have launched in 13 states, according to Coleman’s analysis.”

Self-employed consultants working out of their homes, plumbers, and massage therapist are joining associations to have the negotiating power of large numbers of people seeking healthcare insurance.

Chambers of commerce and small cities have been forming state trade associations and their employees are joining these rapidly forming associations and enrolling in their insurance plans.

The Nebraska Farm Bureau Federation has 59,000 farmers and ranchers in their association. The associations are similar to what Jeff Bezo,Jamie Diamond and Warren Buffett are planning to do for their 700,000 employees. They plan on selling the insurance across state lines which will reduce the price even further than the 33% reduction the associations are anticipating offering.

The Obama administration had limited the formation of associations selling healthcare insurance. Associations were selling their own plans. They were inexperienced administrating them. Some associations went bankrupt. Large healthcare insurance companies have strict criteria and oversite. Self-run associations are going to take longer than.

Associations are being formed. Outside health insurers have run a few association plans since September 2018. Associations were only allowed to begin running their own plans beginning in January 2019.

Critics complain that the healthcare insurance industry is providing teaser rates to associations now. The critics claim the healthcare insurance companies will eventually raise the premiums. It is a possibility. However, with the increase contributions allowed for Medical Savings Accounts and Health Savings Accounts, association members will have a financial incentive to become a prosumer. Consumers would have incentive to become responsible for their health and healthcare dollars.

A more recent study by the Congressional Budget Office projected that 5 million would be enrolled in the plans each year, 1 million of whom would otherwise have been uninsured. The analysis did not assess how many people on Obamacare would become uninsured.”

The Trump administration plan is truly a disruptive plan to the healthcare industry and government healthcare establishment. The Democrats are terrified because it might work much better than Obamacare and result in a total rejection of “Medicare for All.”

https://www.washingtonexaminer.com/policy/healthcare/uninsured-rate-rises-during-trumps-first-two-years-in-office

“It’s not clear from the Gallup poll whether those who are now uninsured used to have an Obamacare plan or had one through an employer or government program. Other data, from the Department of Health and Human Services, show that the number of people in Obamacare plans has dropped only slightly since Obama left office.”

The problem is that enrollment in Obamacare has not risen while the uninsured has.

The number of people on Medicaid has risen dramatically due to some states accepting  Medicaid expansion. The federal government is due to stop paying over 90% of the bill for Medicaid and transfer the burden of payment to those states. Most of those state have large budget deficits that are only going to become larger.

“The highest increases in the uninsured rate were among women, people living in households with annual incomes of less than $48,000 a year, and adults under the age of 35. The young adults had an uninsured rate of more than 21 percent, a 4.8 percentage point increase from two years earlier. Among women, the uninsured rate increased from 8.9 percent in 2016 to 12.8 percent by the end of 2018.”

People cannot afford Obamacare premiums or deductibles. Associations might provide more affordable options. People working for large organizations presently have healthcare coverage.

Consumers understand how inefficient government-run programs have been. It is appropriate to let the free market give it a try. The formation of associations with appropriate regulations is certainly a free market step as opposed to the Democrats’ Obamacare that has failed. It is clear that government control of medical care is financially unsustainable.

We will see how associations and consumers responsible for healthcare dollars works out.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Did Obamacare Cause The Increase In Private Healthcare Insurance Premiums?

Stanley Feld M.D.,FACP, MACE

A reader of my blog received this question from one of his friends.

The reader asked me his friend’s question  “I have a question and I don’t want it to be political (as I stay away from that for many reasons).                                                                                                                                 
Health insurance is so expensive and it does not cover hardly anything. We had to get the worst plan with the worst coverage. But it was not this way 6 years ago. We could afford good coverage.   

 The question is: Did Obamacare cause this change in healthcare insurance and these problems in access to care?

A reader asked:

Which of your blogs would be the best one to show him to answer his question?

The answer to the question is YES!! I will try to explain.

If I sent all the links to your friend would be overwhelmed. There are too many to count.  I will summarize some of the major reasons Obamacare is to blame for some of the increases in private healthcare insurance premiums and the decrease in the access to care. Obamacare has led us into a financial disaster. “Medicare for All” is not the answer.

I believe the goal of Obamacare was to create greater dysfunction in the healthcare system which would lead to huge premium increases for private healthcare coverage. The public would then beg the government to adopt a single party payer system with “Medicare for all.” This has been the progressives”  goal since 1935. Do you remember Barney Frank and John Kerry saying we cannot have a single party payer system yet because we do not have the votes?

https://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2018/10/the-main-reason-behind-rising-medical-costs.html

The government has not had a very successful single party payer systems record.  The VA Health Administration, the Indian Health Service, Medicare and Medicaid are all inefficient and financially unsustainable.

“Our federal government already runs three single-payer systems—Medicare, the Veterans Health Administration, and the Indian Health Service—each of which is in a shambles, noted for fraud, waste, and corruption.”

“Why would we want to turn over all of the American medicine to those who have proved themselves incompetent to run large parts of it?”

https://imprimis.hillsdale.edu/short-history-american-medical-insurance/

The federal government depends on healthcare insurance companies to do the administrative services for Medicare, Medicaid and Obamacare. Administrative services include negotiating payments to hospitals, nursing homes, physicians and providers on all levels.

The various healthcare insurance companies are supposed to bid for these service contracts. The insurance companies receive one global fee.  The healthcare insurance company with the contract must pay providers on a fee for service basis. The healthcare insurance companies do not have good enough data to make an accurate bid estimate.  Actuary science is not rocket science. The healthcare insurance company builds in a twenty percent cushion to the bid. If the bid was low and the healthcare insurance company that lost money Obamacare guaranteed through a complicated reinsurance formula reimbursement to the company for its loss.

Recently the government audit discovered an overpayment of $10 billion dollars to the healthcare insurance industry for Medicare Part D.

I believe there is much more overpayment in Medicare Part A, B and D because of the government bureaucracy. The government only had the money to pay 12% of the reinsurance claims of the healthcare insurance company one year. The insurance industry simply raised the premium in the private sector.

http://stanfeld.com/president-obama-somehow-finds-the-money/

http://stanfeld.com/accelerating-the-destruction-of-the-healthcare-system/

http://stanfeld.com/the-deception-and-disinformation-continues/

Nationwide, the Obama administration made $7.3 billion in reinsurance payments to health insurers. The reinsurance program, funded by taxes on health insurers and self-funded employer health plans, has been criticized by Republicans as a “bailout” for insurers.

https://www.ibj.com/blogs/12-the-dose-jk-wall/post/53906-obamacare-shovels-another-122m-to-indiana-insurers

The healthcare insurance industry then once again raised premiums on the private healthcare sector to make up for its losses. to

The government reinsurance payments weren’t enough in all cases. New York-based Assurant Inc. asked for a 26 percent hike in private premiums for 2016, due to high claims in Indiana, before that company decided to exit the Obamacare markets in all states.

This was typical price shifting.

http://stanfeld.com/?s=price+shifting

Healthcare insurance companies projected that Obamacare would result in them losing money because of adverse selection. Obamacare’s increase required benefits for both public and private insurance. Obamacare’s rules included coverage for oral contraceptives for all and coverage of pre-existing illnesses among others. A sixty-year-old male does not need an insurance policy the receives oral contraceptives.

The healthcare insurance industry asked for double-digit increases in private healthcare insurance in every state. The logic was that these enrollees would pay for the loses that would occur from the Obamacare enrollees.

http://stanfeld.com/managing-points-of-view-and-healthcare/

The government’s argument is all should pay for everyone ’s healthcare needs. These healthcare needs have increased as the population has gotten more obese and has had a rise in drug addiction. These increased healthcare risks resulted in increased actuary estimates of healthcare cost. It does not put a burden on consumers who do not act responsibly.

The increased healthcare premiums caused many employers to drop healthcare coverage for their employees. The decrease in healthcare insurance coverage added to the pressure of healthcare premium increases.

The healthcare insurance industry also plays games with the Medical Loss ratio. The result is an increase in healthcare premiums and deductibles while decreasing services. The Obamacare issued regulations that the insurance industry must dedicate 80% of the healthcare premium to direct medical care and 20 % can be used for administrative expenses for both the public government insurance and private insurance. It is the state insurance regulators responsibility to enforce the regulation.

The expenses the industry wanted to be included are;

Expenses to be included in direct medical care are:

  1. The cost of verifying the credentials of doctors in its networks.
  2. The cost of ferreting out fraud such as catching physicians over testing patients or doing unnecessary operations.
  3. The cost of programs that keep people who have diabetes out of emergency rooms.
  4. The sales commissions paid to insurance agents.
  5. Taxes paid on investments.
  6. Taxes paid on premium income.

All these expenses are administrative expenses in my view and not medical expenses. If these expenses are permitted as benefit expenses, premium money available for direct medical care would decrease. The eighty percent required for direct medical care would be markedly reduced. The result would be an increase in healthcare insurance premiums.

http://stanfeld.com/medical-loss-ratio-how-did-the-healthcare-insurance-industry-do/

http://stanfeld.com/what-is-the-medical-loss-ratio/

The calculation for direct medical care helps the healthcare insurance company prove it lost money. The insurance company then applies to state regulators for a premium increase. The state regulators permit the premium increases.  If the premium increase is refused by the regulators the insurance company threatens to leave the state. The other option the healthcare insurance company uses is to decrease the insurance services and/or increase the insurance deductibles.

Another problem has developed in the healthcare insurance industry that is causing it to raise premiums and reduce services and access to care as a result of Obamacare.

Hospital systems are buying out physicians’ practices. Obamacare has put many restrictions on physician practices. It has increased practices overhead. Obamacare has decreased the ability for physicians to use their medical or surgical judgment that they have become happy to sell their practices to hospital systems. The hospital systems now have to deal with the problems of medical practice. The cost of electronic medical records, which have not added to the quality of medical care, increased many physicians’ willingness to sell their practices to hospital systems. At the moment the percentages of hospital-owned practices are up to 65% from only 17% ten years ago.

http://stanfeld.com/physicians-barriers-to-practice-their-profession/

https://www.wsj.com/articles/SB10001424052748704122904575315213525018390

As premiums have gone up physicians have not experienced an increase in reimbursement. They have been forced to see more patients quickly to earn almost as much as before Obamacare. Obamacare has destroyed the patient-physician relationship which in my view is essential in medical care. Physicians simply do not have time to talk to patients.

Hospital systems have taken over physician populations in many communities. This gives the hospital leverage over the healthcare insurance industry. The hospital system can demand higher reimbursement because it provides all the physicians.

The large hospital systems can demand that the insurance company only use the physicians in its hospital system even if there are lower cost of care options in a community.

The result is an increase in healthcare premiums and decreased the quality of care.

All of this is the result of Obamacare. There are about ten more reasons why Obamacare has increased premiums and decreased access to care. I have left link exposed. You are encouraged to look at them to see the full explanation for some of the point I have made.

I hope this blog answers your friend’s question. :  Did Obamacare cause this change in healthcare insurance and these problems in access to care? 

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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A Thoughtful Solution To Repairing The Healthcare System

Stanley Feld M.D., FACP,MACE

President Trump might be going in the right direction. Unfortunately, the media’s hatred of him and the Democratic Party’s ideology and obstructionism might prevent him from potentially pursuing a new and sustainable direction that gives consumers the power to choose their healthcare goals. There is no reason that the government could not incentivize and subsidize the needy and less fortunate with this simple system.

I think everyone is tired of the political noise in the healthcare system. There seems to be no room for an understandable signal. However, I believe that effective technology and social networking can serve to decrease that noise to signal ratio and provide a less complex system.

President Trump is offering association directed healthcare plans, a blueprint to reduce decrease drug costs and health reimbursement arrangements to reduce the cost of healthcare insurance.

All three initiatives, if kept simple, can put control of the healthcare system in the hands of consumers.

Associations can provide healthcare plans to its members.  An association health plan (AHP) can provide multiple medical insurance plan options. Smaller employers, freelancers and self-employed association members can buy healthcare insurance through the association.

President Trump’s new regulations have made it easier for the members of associations to be equal to large corporations in negotiating the purchasing for health care insurance. They can also offer multiple healthcare plans and still have a high enough enrollment to obtain deeply discounted premiums and deductibles for small businesses, freelancers and self-employed that the members cannot get on their own.

These consumers will also be able to spend pre-tax dollars on their healthcare plans.

Access to the savings and benefit flexibility enjoyed by large group health plans is the foundation of the new association health plans. These savings can range from 8 to 18 percent for the same health insurance policy.”

“ Savings can be increased further through tactics such as self-insuring. Avalere Health, a healthcare research and consulting firm, has projected in a recent report that “premiums in the new AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022, depending on the generosity of AHP coverage offered.”

I think Jeff Bezos, Jamie Diamond and Warren Buffet’s new alliance has the right idea. They will provide deeply discounted healthcare coverage for their combined employees.

The primary advantage of offering health insurance through an association is the ability for an association to aggregate multiple employers so that the resulting health plan:

  • Operates under a large group health plan rules, which can be less costly than Affordable Care Act rules for small group plans.”
  • “Leverages its scale of participants in negotiations with health providers in order to obtain more favorable rates for medical services.”

The country has not been given enough information nor data to understand Obamacare’s inefficiency. The media has not been helpful in letting consumers understand Obamacare’s inefficiency and deficiencies.

President Trump is interested in having associations form and compare their success to the failed structure of Obamacare. Obamacare would seize to exist.

If associations are done right they can become a simple system that consumers can easily understand and use. This was Steve Jobs vision when Apple developed the iPod, iPhone, and iPads.

The insurance product that could achieve this vision for healthcare is my Ideal Medical Savings Accounts.

Americans need the new option to create a sustainable healthcare system.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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Thinking About The Healthcare System’s Problems

Stanley Feld M.D.,FACP, MACE

President Trump’s administration has developed an alternative to Obamacare.

The press is suddenly saying the public considers the healthcare system its biggest problem. The healthcare system has been a huge problem all along. Obamacare was supposed to fix the problem. Obamacare has only enrolled twelve (12) million people in an individual healthcare market in 2019. Eighty-five percent of those enrolled are receiving government subsidies. Many of the enrollees have unaffordable deductibles and cannot afford to use the healthcare insurance.

Obamacare is methodically destroying the infrastructure of the healthcare system. Consumers of healthcare are becoming commodities. The healthcare system is complex. Obamacare has increased its complexity. It has increased costs to Medicare and Medicaid and made the entire healthcare system unsustainable.

Unfortunately, Democrats have ignored Obamacare’s effect on our national deficit while not increasing the efficiency of delivering healthcare. There has been some press quoting Democrats who have said that Republicans are starting to believe that our budget deficit is not significant.

It was recently discovered that insurance companies have overcharged the government’s Medicare Part D more than ten billion dollars.

What are consumers thinking as their savings are worth less and drugs cost more each year? Do they believe that the government’s bureaucracy is efficient? Is it any wonder that Congress’ approval rating is close to single digits?

When people feel they have less freedom to choose their doctor, hospital or insurance company and are being compelled by their government to settle for what is available, does anyone think they want more of the same?

Now, the narrative heard all over the land is “Medicare for All.” Medicare for all will not solve the healthcare system’s problems. It did not solve the VA Healthcare systems problem. The VA system is being privatized.

I do not believe that the way to solve our healthcare problem is to enlarge an unsustainable program. It is illogical. It will make the healthcare system worse and more unsustainable.

The first thing to do to solve any problem is to understand the problem. Everyone wants the best medical care for the entire population. Everyone says the healthcare system is so complex that it is impossible to fix.

The best way to cut through the healthcare system complexity and find a solution is to a clearly define the goal. The goal should be quality medical care available for all at an affordable cost. This means that all of the waste must be eliminated from the healthcare system. This is the goal of the Trump administration’s three-point approach.

Next, is to search for an approach devoid of politics and ideology that will have the highest impact. In my view, this means developing a system that provides consumers with the most control and responsibility for their medical care decisions.

The highest impact can be provided by the development of a system using technology to put the healthcare system in the hands of consumers. It must provide consumers with the greatest control over their choices and generate incentives to be responsible for their medical care and healthcare dollars.

There will be outliers who will be a potential burden to the system. However, if a system is developed with financial incentives to consumers, those outliers will realize they are hurting themselves. I do not believe consumers are stupid. They have simply been uneducated, unaware and unmotivated to control their health and healthcare dollars because a system to motivate them to be healthy and responsible for themselves is unavailable.

Steve Jobs said it all when he told his engineers that the consumers are not too stupid to use the machines, we are too stupid to make machines that easy to use. The same holds true for our healthcare system.  The goal in the healthcare system would be to reorient our thinking.

Obamacare is beyond improving because it put more power in the hands of the government which translates to more control over consumers’ freedom. An “improvement” such as an attempt to provide “Medicare for All” will lead to disaster.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.



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