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What Exactly Is A Public Option?

September 28, 2016
inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

Obamacare is failing. The impending disaster is coming November 1st when the insurance vendors publish their premium prices for Obamacare’s Health Insurance Plans.

Consumers will be shocked by the 20% increase in premiums, the sparse selection of insurance vendors and the higher deductible.

As a distraction from the failure of Obamacare, the progressive Democrats are now trying to sell the “Public Option” as the savior of Obamacare.

I have received several questions asking what exactly is the “Public Option.” The “Public Option” was turned down in 2009 when Democrats were in control of both houses of congress.

How could a “Public Option” be passed in a Republican controlled congress? It can’t be passed.

The Democratic push to sell the “Public Option” is political theater. It is meant to provide hope for President Obama’s progressive base and blame Obamacare’s failure on the Republicans.

It is also meant to distract the traditional mainstream media from the impending Obamacare failure and upcoming disasterous enrollment before the Presidential election.

Here is the answer to the question “What exactly is the Public Option ? ”

It is another defective program that will fail. If passed by congress it will result in the deepening distruction of the healthcare system.

The “Public Option” was first introduced into Obamacare at the onset of the passage of the act. It was eliminated from the bill in a Democratic dominated congress because as Barney Frank said, “We don’t have the votes”.

Barney Frank and John Kerry were convinenced that the only way to get to a single party payer system in the United States was though a “Public Option.”

The “Public Option” is the creation of a federal government-run health insurance agency. The goal of this new insurance company would be to compete with private health insurance companies on price within the United States.

The original published purpose of the “Public Option” was to provide more affordable health insurance rates to uninsured citizens who are either unable to afford the rates of or are rejected by private health insurers.

Now it will be providing cheaper insurance than the private insurance companies are offering to force the private insurance companies to reduce their premiums.

The private insurance companies will not show up to compete.

Obamacare was supposed to be doing creating competition through its Health Insurance Exchanges and State Co-Ops for the people with pre-existing illness and the poor.

The result was premiums went through the roof for both the Health Insurance Exchange policies and private insurance policies.

The government is ended up providing subsidies for 85% of only 10 million people who have bought insurance through the Health Insurance Exchange. It is economically unsustainable for the government and tax payers if the entire population would buy insurance through the Public Option.

It is obvious that the government would try to undercut the private insurance companies and force the private insurance compaies to lower their prices. The result would be bankruptcy as the State Co-Ops experienced.

“Supporters argued that a government insurance company could successfully lower its rates by using greater leverage than private industry when negotiating with hospitals and doctors,[18] as well as paying the employees of the public option insurance company salaries as opposed to paying based on individual medical procedures.[19]”

However, the federal government is dependent of the healthcare insurance industry for the administrative services necessary in adjudicating healthcare insurance claims.

Federal government dependence is true of all government healthcare programs except the VA Healthcare System.

Does anyone think the federal government bureacracy can run a healthcare system effectively and efficiently?

The healthcare insurance industry builds profit into its administrative services contracts. The federal government’s bureacracy cannot control those prices.

The reduced premium pricing would result in government subsidizing the “Public Option” further resulting in an increase in the federal deficit. This has happened in Medicare. Premiums have gone up, covered care has gone down. Medicare is unsustainable.

The recipients of Medicare think it is a wonderful program. The trustees of Medicare feel it is unsustainable simply because of the massive hidden subsidies and cost overruns.

There is no question that premiums are increased, reimbursement to providers has decreased, care is rationed and access to care has decreased.

No one in government is thinking of a more efficient way to format Medicare.

Neither Barak Obama, Hillary Clinton, or Bernie Sanders are thinking about the consumer and the consumers’ needs at this point.

Neither are they thinking about a healthcare system that is affordable to the federal government or the consumers of healthcare.

No one is thinking about consumers driving the healthcare system and being responsible for their health and healthcare dollars.

These politicians are only thinking about power and central control by the federal government over the healthcare system no matter the cost to the federal government, the tax payer, the quality of care delivered to consumers, or the system’s effect on economic growth.

“The real sign of how Bernie Sanders changed the Democratic Party can be seen not just in shifts in the Democratic Party platform, but in how the party’s current leader, Barack Obama, has altered his own posture. “

“And this week, in a special communication to the Journal of the American Medical Association, Obama endorsed a public health insurance option to enhance the Affordable Care Act, his signature legislative achievement.”

“This puts Obama in line with his preferred successor, Hillary Clinton, who recently reiterated her support for a public option and for allowing Americans between 55-65 to buy into Medicare. Both policies tilt toward Sanders’s vision of universal coverage.”

Philosophically it is called Socialism.

Big government controlling society does not work. There are countless examples of socialism’s failures in Europe, bankruptcies, unemployment and stagnation, both economically. and politically.

America must learn now. We ought to adopt a healthcare system that is consumer driven.

Big government and its bureaucracies cannot do it for us. It has led from one disaster to the next. It will destroy our healthcare sytem.

America should try a system that provides financial incentive to the public so people are responsible for their health and healthcare dollars.

The government should adopt a healthcare system that I have outlined.

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

 All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Public Option: Another Catch 22

September 21, 2016
inDisinformation and the healthcare system, Medicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

Obamacare is in crisis. The public does not realize it because the media is keeping the impending disaster out of the public’s view.

The Obama administration and media is also shielding the public from the past history of Obamacare and its failures at each step.

At this moment, the Obama administration, the traditional mass media and Hillary Clinton think the magic bullet to save Obamacare is a “Public Option.”

All progressives are obsessed with the idea that a single party payer system will magically convert Obamacare into an affordable healthcare system. They also think the Public Option is a direct route to a single party payer system.

https://youtu.be/f3BS4C9el98

 

It is unfortunate that the progressives’ base believes a single party payer system is the answer to our dysfunction healthcare system despite the failures experienced in Vermont, New Hampshire, Canada and England.

My wife and I were touring the Canadian Rockies a few weeks ago with a tour group.

I got into a discussion with a couple of lawyers on the tour about the healthcare system.

I told them Canada spends 50% of its GNP on healthcare. All of the provinces are experiencing massive deficits.

Canadians who are healthy and do not need to interact with the system are happy and feel secure that their healthcare needs will be serviced without cost. Nothing is free.

Canadians who need the healthcare system are unhappy. They experience long waits and poor service.

The lawyers’ immediate reaction was healthcare consuming 50% of Canada’s gross national product was impossible.

The United States consumes only 18.5% of our GDP on healthcare.

They checked their IPhones. Their iPhones said Canada only spends 11.4% of their GNP on healthcare. They clearly did not believe me.

I told them to read my blog and the Frazer Report.

The Washington Post published: in 2009, Canada spent 11.4 percent of its Gross Domestic Product on health care, which puts it on the slightly higher end of OECD countries:

This is not true according to the Fraser report.

 “Six of ten Canadian provinces are on track to spend half of their revenues on health care, according to the Frazer Institute. To be specific, 

“By 2017, four more provinces — Saskatchewan, Alberta, British Columbia and New Brunswick — will spend half of their revenues on health care, according to the institute.”

I decided to reinvestigate the discrepancy between the two numbers when I got home.

Why would the Washington Post publish one number (11.4 percent of its Gross Domestic Product on healthcare) and the Fraser Report publish a 50% number?

In 2012, I figured the Washington Post just got it wrong. The reporter probably copied a number from some report that did not include all the funding for healthcare.

The Fraser Report added up all of contributions various Canadian agencies made to the government funding of the Canadian single party payer healthcare system.

The August 2016 Fraser Report made the discrepancy clear between the 11.4% and 50% number.

“Canadians often misunderstand the true cost of our public health care system.”

 “This occurs partly because Canadians do not incur direct expenses for their use of health care, and partly because Canadians cannot readily determine the value of their contribution to public health care insurance.”

The August 2016 Fraser Research Bulletin explains the discrepancy. It starts off by saying;

Health care in Canada is not “free.” While Canadians may not be billed directly when they use medical services, they pay a substantial amount of money for health care through the country’s tax system. Unfortunately, the size of these tax payments is hard to determine because there is no “dedicated” health insurance tax.

“As a result, individuals and families often cannot fully appreciate the true cost they pay towards the public health care system.”

The Canadian Government has figured out how to hide the true cost of healthcare from the press and the public.

The Obama administration is also hiding many costs from the American public as the insurance premiums are skyrocketing.

“The purpose of this research bulletin is to help individuals Canadians and their families better understand how much healthcare actuallt dosts them personally so they can determine whether they are receiving good value for their tax dollars.”

 The problem is the Canadian public is only interested in what their individual healthcare coverage insurance costs.

Their coverage is “free” at the point of service. Free is good but nothing is free. Their complaint is the difficulty with access to care and the time it takes to get care.

Canadians are not thinking about the total healthcare costs to society. Canadians are not thinking about the source of revenue for that cost.

In Canada general revenue taxes are increased gradually.

Somehow these increases are not recognized.

Yet, people earning $48,456 a year have a tax rate of 43.1% and pay $11,439 dollars for healthcare coverage.

The healthcare coverage comes off the top of the tax bill similar to our social security payment pays for our Medicare Part B insurance.

Someone making $281,359 pays $158,255 in taxes or q tax rate of 56% of which $37,361 is paid for healthcare insurance coverage.

When people speak of “free” healthcare in Canada, they are entirely ignoring the substantial taxpayer-funded cost of the system.

The healthcare insurance premiums paid by Canadians only covers a fraction of the costs of the Canadian Healthcare System.

Some Canadians might assume that in those provinces that assess them, health care premiums cover the cost of health care.

 “However, the reality is that these premiums cover just a fraction of the cost of health care and are paid into general revenues from which health care is funded.”

 This is precisely what President Obama is doing with our healthcare system. The true cost is totally opaque.

In the U.S. it is impossible to figure out from which taxpayer fund President Obama take the revenue for the $2.5 billion dollar loans lost for the failed Co-Ops experiment, the $650 million dollar website fiasco, or the insurance subsides for 85% o the consumers who signed up for Obamacare.

 Congress is not helping us find out where the money is coming from either.

“Indeed, Canadians cannot easily work out precisely what they pay to government each year for health care because there are many different sources of government revenues that may contribute to funding health care, including income taxes, Employment Insurance (EI) and Canada Pension

Plan (CPP) premiums, property taxes, profit taxes, sales taxes, taxes on the consumption of alcohol and tobacco, and import duties, among

others.”

 President Obama is not telling the American public the truth about the cost of Obamacare with its tiny participation.

If Americans knew where all the money is coming from they would demand immediate real of Obamacare.

There is a growing mistrust for our elected officials. The increase in public awareness is a result of the spread of social media and Internet communication.

It is difficult for the Obama administration and media to hide thing from the American people anymore. The catch is Americans have to more pay attention.

An excellent example is Hillary Clinton’s cancellation of a noon fund raising event is North Carolina. The cancellation was announced at 9 a.m. It went viral on the Internet at 10 a.m.

The cancellations aroused suspicion that Hillary was sick again, especially when her campaign announced that it had not comment.

Five hours later it announce that she had to cancel her events for the week to study for the debate.

With the many lies Americans have experienced from President Obama from Obamacare to the Iran Nuclear Treaty and Hillary from her emails and the Clinton Foundation, Americans are starting to become aware of their need to pay more attention to the day’s events and not rely on elected surrogates to look after us.

Healthcare, taxes, our economic growth and personal safety are important issues to most Americans. Many Americans are wondering if we can trust our surrogates.

Americans are starting to demand the truth.

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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More On The Public Option

August 4, 2016
inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

Hillary Clinton is a tax and spend Democrat. She will be an extension of the Obama administration.

Her list of promises and expenditures will continue in healthcare without success in providing better cost effective care to Americans.

Her plans for healthcare will result in increased government control of Americans’ lives and freedoms while escalating the federal deficit.

The expansion of President Obama’s failed programs will simply accelerate the path toward total collapse of our healthcare system.

Slide7

Dr. Robert Kocher was special assistant to President Obama for health care and economic policy from 2009 to 2010. He was instrumental in promoting the consolidation of healthcare systems. He also encourage these healthcare systems to buy physicians practices in order to consolidate networks.

The rational was the government would then deal with one provider (the hospital system). The communications within the network would improve the quality of care and decrease the cost of care.

Theoretically, this should be true. However, the differences between the culture of hospital administrator and physicians made Dr. Kocher’s goals impossible to achieve.

“I believed then that the consolidation of doctors into larger physician groups was inevitable and desirable under the ACA.”

This last week he admitted that he was wrong and individual practicing physician groups are more efficient and less expensive than “hospital controlled networks of physicians.”

“I, along with Ezekiel Emanuel and Nancy-Ann DeParle, argued that “these reforms will unleash forces that favor integration across the continuum of care.”

“We thought only hospitals or health plans can afford to make the necessary investments” needed to provide the care we will need in a post-ACA world.”

“Now I think we were wrong to favor it.”

“What I know now, though, is that having every provider in health care “owned” by a single organization is more likely to be a barrier to better care.”

In 2010, I predicted hospital systems owning physicians would not work. Anyone with an understanding of hospital politics and hospital administrators thinking knew it could not work.

The only reason physicians let hospital systems buy their practices was because the physicians were disgusted with the intrusive government rules and regulations and they were afraid they would be left out of the growing future trend.

It was clear to me the trend was misguided political manipulation.

The best of the clinicians tried to make it work but failed. ACO’s controlled by hospital systems were destined to fail and not save money.

ACO’s that are owned by private group practices are barely saving money and profiting by that savings.

President Obama and his administration fell for the concept because they visualized it as a path to control physicians and the healthcare system.

The Obama administration and its experts never considered what the consumers might want or need.

The healthcare insurance industry is now suing the government because the government is reneging on its reinsurance commitment totaling billions of dollars.

President Obama and Hillary Clinton are calling for a public option. This is a diversionary tactic The public option is certain to fail.

The government will continue to remain totally dependent on the healthcare insurance companies for administrative services.

The reintroduction of the public option will accelerate the collapse of the healthcare system. It appears that Ms. Clinton has no idea of the unintended consequences.

The unspoken reality of the “public option” is to destroy private healthcare insurance. It is not a good idea. It will accelerate the  collapse of the healthcare system.

Slide7

I have written extensively about the consequences of the public option.

The government would squeeze private insurance out of the marketplace through regulatory control over access to care, premium control over consumers, and financial control over providers. The government would undercut the marketplace.

The government will remain dependent on the healthcare insurance industry to administer the services provided for all of the existing government healthcare services including Medicare, Medicaid and Obamacare.

The healthcare insurance industry would be in better shape because all the insurance risk would be transferred to the government.

The government programs are unsustainable at the moment. This unsustainability will escalate.

“While private plans must negotiate market rates with doctors and hospitals, a Medicare-like “public option” would fix payment rates by fiat, well below the rates that would otherwise prevail in a real market.”

President Obama said just the opposite in his Journal of the American Medical Association article.

“Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”

President Obama’s statement is a total lie. However, the mainstream media is repeating the lie as a fact.

I hope President Obama and Hillary Clinton’s public option is no more convincing today to the public than it was in 2009.

It should be less convincing in the face of all the Obamacare failures to date.

Taxpayers are realizing that the public option will put them at more real financial risk. Taxpayer financial risk was clearly stated in the first version of the public option with no congressional questions asked.

The public option does not create a competitive marketplace and level the playing field. The competition will disappear at the taxpayers’ expense.

“Using a market mechanism, like a “health insurance exchange,” then adding a “public option” to undercut private plans and destroy a competitive private market was a political strategy.”

“All the public relations rhetoric about expanded “consumer choice,” promoting “market competition,” and keeping private plans “honest” was, of course, classic boob bait.”

It is clear that both Barack Obama and Hillary Clinton think the American public is stupid.

President Obama has been playing the American public for 71/2 years. He was correct when he told Senator Kerry and Representative Barney Frank that we don’t need a public opinion.

Obamacare was enough to get central government control of the healthcare system.

Let us think about it a little.

The federal government mandated coverage. The problem is the mandates didn’t work.

Then, Obamacare defined what healthcare plans are permissible.

These Obamacare regulations escalated the premiums and the deductibles to unaffordable heights.

The federal government determined what health benefits consumers could receive.

It didn’t work. If a benefit was not included, consumers bought that benefit outside the system or did not buy healthcare insurance if the benefits where too many.

Physicians started to not participate in the Obamacare system. This non-participation has caused a shortage of providers.

Some medical procedures or treatments were not covered. The government decided what should be covered, what level of coverage should exist and what copayments and deductibles were to be allowed.

Consumers have been protesting. The government has not been listening.

Obamacare has all the tools and power of the law to control the healthcare system without a public option.

However, the Obama administration and another future Clinton administration feel they must destroy the healthcare insurance industry in order to give the public no choice and compel them to comply.

The public option will also fail. It will lead to restrictions on freedoms and liberty. When this is clear the public will get very angry.

The cost of healthcare will rise, not fall, because of greater inefficiency and bureaucratic control.

There will be reams of red tape and unenforceable provisions as a result of government control.

There will be special deals to certain providers in order to avoid uncontrollable protest.

Who will lose? The poor and the middle class!

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

All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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President Obama Continues to Deceive i.e. The Public Option

July 27, 2016
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D., FACP,MACE

President Obama continues to deceive the American people about Obamacare’s success as his term in office is winding down.

He is trying to use his charming personality to erase the fact tat Obamacare is failing.

The public must keep their eyes and ears open.

Obamacare is falling apart as the months continue. President Obama and the liberals are queuing up to pour more money into a failing healthcare reform model by reintroducing the need for a public option.

On June 30, 2016“CMS division of the HHS Dept. released the HHS Dept. released the actual Q1 effectuation report,

Each year the Obama administration has lied to Americans about enrollment in the health insurance exchange program.

As of June 30,2016, only 11.1 million people have signed up and continued to pay their premiums for Obamacare coverage in the 38 federal health exchanges as opposed to over 13 million that were published. State exchanges are closing monthly.

The latest prediction is that only 10.2 million will have insurance through Obamacare for the entire year. Eighty-seven percent of those insured through the federal health insurance exchanges have government subsidies in the government’s attempt to make health insurance purchased through the exchanges affordable.

If President Obama is correct about Obamacare providing insurance for 20 million people who did not have healthcare insurance previously then 9 million new people have signed up for Medicaid coverage.

Medicaid coverage is completely free to the recipients and is a single party payer system. The federal government presently pays for Medicaid coverage. The increased enrollment is also increasing the federal deficit.

Soon the federal government is going to dump some of the financial responsibility on participating states that are already running budget deficits.

It is only a matter of time before all the 23 state Co-Ops will go out of business and the federal health insurance exchange will take over.

Illinois is the 16th state to close its Co-Op doors. It followed one week after Oregon Health Co-Op closed its doors.

Land of Lincoln Health received $160.1 million in loans from the Centers for Medicare and Medicaid Services. More than 54,000 enrolled in coverage from the co-op through March 31.

 Where are these 54,000 people going to go for healthcare insurance?

 “It’s a bad day for the marketplace in Illinois and our consumers,” Jason Montrie, Land of Lincoln Health’s CEO said. “This is the end.”

Who is going to pay CMS back for these federal loans? The state of Illinois cannot afford to pay CMS back. The American taxpayers will re-pay the loan.

So far the total number of federal loans given to the failed nonprofit insurers is more that $1.5 billion for an experiment that was destined to fail from the start.

When are the liberals and progressives going to learn? You cannot keep spending other peoples’ money. You will eventually run out.

These last two weeks have been a big distraction because of party conventions.

Hillary Clinton announced her healthcare proposals. She has proposed an increase of $40 billion dollars in mandatory federal spending insulated from annual budget fights over the next 10 years to develop community health centers.

Hillary Clinton also wants to expand Medicare by letting people age 55 years old or older to opt into Medicare.

In addition she wants a public option.

“Bernie Sanders tweeted. “Together these steps will get us closer to the day when everyone in America has access to quality, affordable health care.”

Who is paying? The middle class taxpayer will pay the burden of the increase in taxes. It will not be paid by the 50% of the entitled citizens who do not pay taxes.

This is an attempt by Hillary Clinton to expand coverage for middle-aged adults. It also gives us a glimpse at how she wants to make Obamacare her own.

President Obama was not taking this lying down. He published an article in the Journal Of the American Medical Association, a “scientific journal.” This article is complete progressive propaganda. Why the AMA permitted this publication is beyond my understanding?

In his “special communication” President Obama once more presents another Trojan Horse (A destructive program that masquerades as a benign application.) to the physicians of America and the consumers of healthcare.

“Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan.

Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers.59,60

The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited.

Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.61”

In 2009 Barney Frank and John Kerry insisted that a public option was essential for Obamacare to evolve into a single party payer system.

President Obama told them they would get to a single party payer system without a public option.

He has now changed his mind.

https://youtu.be/f3BS4C9el98

 

I have written extensively about the defects in a public option. http://stanfeld.com/?s=public+option

The New York Times writers did not describe the meaning or consequences of the public option in articles about both Hillary Clinton’s and President Obama’s call for a public option.

The American people should be told the real reason for the public option.

The combination of a “public option” within a health insurance exchange system was originally developed by liberal health policy analysts as a dual action mechanism to secure a “single payer” system. It presents the facade of a free market system but the end game is a full-scale government monopoly.

“If a public option became part of government-run health, the Health and Human Services secretary would establish such a plan, set its benefits, and fix its payment rates.

While private plans must negotiate market rates with doctors and hospitals, a Medicare-like “public option” would fix payment rates by fiat, well below the rates that would otherwise prevail in a real market.”

The “public option” would be a better deal for consumers rather than private healthcare coverage. The government would artificially force premiums down with subsidies. It could indiscriminately lower non-negotiated reimbursement to physicians and hospitals and force insurance companies out of the healthcare market.

It would result in an increase in federal taxes.

Additionally, the result will be a defacto single party payer system with less choice and access to care.

President Obama continues to ignore the fact that the government is dependent on the healthcare insurance industry to perform the administrative services for this government program. He ignores the fact that he needs doctors and hospitals to treat and care for sick patients.

He is only interested in financing the healthcare system and controlling the consumer’s ability to choose.

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

All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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If President Obama Cannot Get A Public Option One Way He Will Get It Another Way

June 19, 2011
inMedicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust, Universal Healthcare
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Stanley Feld M.D.,FACP,MACE

 

McKinsey Quarterly has reported its survey concluding there will be a radical restructuring of employer-sponsored health benefits (ESI) as a result of President Obama’s following the 2010 passage of the Affordable Care Act.

Healthcare insurance rates have already skyrocketed as a result of anticipating the conditions of Obama care. President Obama has been powerless to do anything about the increases. 

Thirty percent (30%) of companies providing ESI to their employees will drop healthcare insurance coverage once Obama care takes effect in 2014.

The survey included 1300 employers providing ESI across industries, geographies, and employer sizes. Other surveys have found that as we get closer to 2014, President Obama’s Healthcare Reform Act will provoke a much greater number of employers to drop employer sponsored healthcare insurance.

The penalty for not providing healthcare insurance coverage is much cheaper than providing healthcare coverage. 

 McKinsey’s survey suggests that when more employers become aware of the new economic and social incentives embedded in Obamacare the percentage of employers dropping ESI will come closer to 100%.

The Congressional Budget Office estimated that only 7 percent of employees currently covered by employer-sponsored insurance (ESI) will have to switch to government subsidized-exchange policies (Public Option) in 2014.

The McKinsey study concluded;

 

  • Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.
  • Many Human Resources officers and CFOs do not know the implications of Obama care.
  • Among employers having a high understanding of President Obama’s Healthcare Reform Act more than 50% will stop offering employee healthcare benefit and more than 60% will make some kind of change.
  • At least 30 percent of employers feel they would gain economically from dropping coverage and paying the penalty. They would even gain if they increase their employees’ salary or other benefits.
  •  The insurance coverage is in excess of $15,000 per year per employee. The government penalty is $2,000 per employee.
  • The difference in cost will force employers to drop ESI and force employees into the Public Option.  This was President Obama’s plan all along.
  • The survey also showed that more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI.
  • Sixty (60) percent of employees would expect an increase in compensation from their employers. 
  • Who are these rules in favor of? They are not in favor of the employee.

 

Health care reform fundamentally alters the social contract inherent in employer-sponsored medical benefits and how employees value health insurance as a form of compensation.

 “Obamacare” guarantees the right to health insurance regardless of an individual’s medical status or ability to pay. In doing so, it minimizes the moral obligation employers may feel to cover the sickest employees, who would otherwise be denied coverage in today’s individual health insurance market.

The logical result is healthcare insurance premiums would increase for the individual and benefits would decrease to keep the premium cost down.

In 2014, people who are not offered affordable health insurance coverage by their employers will receive income-indexed premium and out-of-pocket cost-sharing subsidies from the government.

The highest subsidies will be offered to the lowest-income workers. It enables these low paid workers to obtain coverage they could not afford in today’s individual market.

The government will pay the subsidies for the increasing premiums in this Public Option. The government would then pass the increased premium cost on to the taxpayer on a means tested basis.

This is what Don Berwick and President Obama meant by redistributing wealth. 

The next step is government’s complete control of the healthcare system using a single party payer system. 

Employers will no longer be able to offer better healthcare insurance benefits to their highly compensated executives. Obamacare requirements will increase medical costs for companies.  Companies will be forced to discontinue employee healthcare coverage. The penalty is set low to further encourage companies to discontinue coverage. President Obama’s goal is to have most people in the “Public Option” This will lead to government control of the healthcare system.

 State insurance exchanges will be paid for by the states with a federal subsidy. These exchanges will offer individual and family policies of set benefit levels (bronze, silver, gold, and platinum) from a variety of insurance companies.

The effect on the federal deficit will be much greater than the original CBO’s estimate of 10 million people, or about 7 percent of employees, currently covered by ESI.

Seventy (70) million people will be added to the “Public Option”. This increase in numbers will add to the deficit. The result will mean higher taxes for the middle class.

President Obama wins his ideological goal. Consumers will have less control over their decision-making and choices.  The healthcare insurance industry will gain more control over pricing and profit. President Obama will continue to outsource the administrative services to the healthcare insurance industry.

 The losers will be consumers and physicians.

 

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

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Here Comes The Public Option. Next: Single Party Payer.

May 16, 2010
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

Barney Frank declared during the healthcare reform bill debate, if we do not have a public option healthcare reform will fail.

Senator Kerry felt we must have a single party payer system. He stated the Democratic Party did not have the votes to put it in the bill.

President Obama and the Democrat figured out how to sneak a single party payer system into the healthcare system in America by default.

President Obama’s signature promise about the healthcare reform bill was "If you like your health care plan, you can keep your health care plan. If you like your doctor you can keep your doctor.”

What President Obama left out of his promise was that if your employer stops your healthcare insurance coverage there will be no choice but to use the subsidized government healthcare plan from the healthcare insurance exchange “Public Option”.

President Obama uses this move a lot. It is called misdirection.

“As companies crunch numbers on what the new law means for their bottom line, some have concluded they might be financially better off canceling their health care coverage and moving their workers to government-subsidized "exchanges" that will be created in four years. “

Corporate action to drop healthcare insurance will make Barney Frank, Nancy Pelosi, John Kerry and President Obama happy. I do not think the Democrats have thought about the unintended consequences. Just think what the influx of consumers to the government subsidized plan will do to the CBO’s estimate of the healthcare reform bill reducing the deficit by $115 billion dollars in ten years and 1 trillion dollars over the next 10 years.

The CBO revised its estimate this week. It stated that the bill will increase the deficit by that amount in the tenth year instead of decreasing it. I believe this is an underestimate.

AT&T Inc has concluded that eliminating employees’ healthcare insurance could mean a $1.8 billion dollar saving per year. It is much cheaper to pay an estimated penalty $2,000 per employee than $15,000 to 18,000 in non deductible dollars for employee healthcare insurance coverage.

“The documents, obtained by Fortune magazine and posted online this week, reveal that four companies – AT&T, Verizon Communications Inc., Caterpillar Inc. and Deere & Co. – had investigated to varying degrees the impact of dropping health care coverage and pushing their workers onto the new exchanges, where they will be able to buy their own insurance.”

This year AT&T spent about $2.4 billion to cover medical costs of its 283,000 active workers. Next year they are scheduled to pay more.

AT&T instantly denied that it has a plan in place to drop healthcare insurance for employees. AT&T would only have to pay an annual penalty of $600 million, or $2,000 a worker if the company dropped the healthcare insurance.

The burden would be on the employee and the government. President Obama promised us all affordable healthcare insurance.

Large companies are sick of dealing with increasing insurance premiums, insurance paperwork and regulatory compliance. These large companies would pocket huge savings by eliminating healthcare insurance for employees.

"Even though the proposed [penalties] are material, they are modest when compared to the average cost of health care," Hewitt Resources said in its report. "To avoid additional costs and regulations, employers may consider exiting the employer health market and send employees to the exchanges."

All the large corporations are denying they have plans to drop healthcare insurance. However it is o
bvious this is just what they should do to protect their vested interests.

Just as bad an unintended consequence is firms fewer than 50 full time employees do not have to pay a penalty for dropping insurance. A firm at the 50 employee threshold could fire workers to get below the 50 mark. They could then hire them back as part time employees.

If al these people lose healthcare insurance they will be forced to go into Medicare, Medicaid or the government subsided “Public Option” through the healthcare insurance exchange. Either option will increase government spending. The estimate increases are low at $160 to 300 billion dollars per year.

President Obama’s little trick will work. The losers will be consumers. Everyone will be forced into the “Public Option” by default. The single party payer (the government) will automatically take over the healthcare system in America (socialized medicine).

The federal deficit will increase without Repairing the Healthcare System.

Taxes on everyone will have to be increased . Does President Obama understand all of this?

Americans must wake up. The 2010 midterm elections are near.

“It is time to trow da bums out”

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

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Public Option vs. Ideal Medical Savings Account: Part 4

September 8, 2009
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

Politicians and healthcare policy makers have not included consumer driven healthcare in the healthcare reform debate. They have not included tort reform in the debate either.

The debate is about a public option. President Obama is going to redefine his meaning of the public option in his message to congress. He will make it sound benign. It will not sound like a government takeover of healthcare. He will omit the details and consequences of the bill.

President Obama must know the government cannot afford a public option. He knows he must control costs somehow. His policy makers believe the only way to control cost is by total government control over the healthcare system. Ultimately the goal is a single party payer system.

This way of thinking about the problem is wrong. Government control does not reduce costs in most projects. It usually increases costs. The President is focused on reducing physicians’ and hospitals’ reimbursement. He believes they are the reason for increasing costs. Medicare has continually decreased reimbursement to physicians and hospitals. Yet costs have increased.

To some extent decreased reimbursement leads to increased utilization but it is not the principle reason for the increase in utilization. A principle reason is an increase in the need to practice defensive medicine. Plaintiff attorneys deny it. The Massachusetts study confirms that defensive medicine leads to a large increase in utilization and costs.

Physicians are an easy target because they are not well organized. The Democrat controlled government is timid about attacking the plaintiff attorneys and tackling tort reform. Defensive medicine results in about a $700 billion dollar a year cost to the healthcare system. 

Howard Dean said it a few weeks ago. “Congress will not face the issue of tort reform because it does not want to take on plaintiff attorneys.” Consumers can solve this for congress by signing a valid limited liability waiver. Patients can put their own cap on damages. It would not require any courage on the part of congress or the President to face this difficult political issue. All congress and the President have to do is declare the waiver valid.

Texas and California have had the courage to place caps on damages. It has been very successful. If there were caps on damages and they were effective the need for defensive medicine practices would decrease.

The public does not trust congress or the President with control over its healthcare coverage. The public experience with unintended consequences of government control is obvious to all.

Recent examples are the unintended consequences of the bank bailouts, Goldman Sachs bailout, the economic stimulus package promise, the auto bailout, and the war in Afghanistan. All these bailouts are increasing the deficit at the expense of the taxpayers and future generations.

The public mistrusts the healthcare insurance industry as much as it mistrusts the government to control healthcare. The healthcare insurance industry has restricted access to care and rationed care. It has not reimbursed physicians and hospitals in a timely fashion. It has found it is cheaper to pay the negotiated settlement rather the medical bills for its insured.

Nancy Pelosi is right about one thing and only one thing. The real villain is the healthcare insurance industry. However, she does not understand with a public option she is not controlling the healthcare insurance industry fees for administrative services. The government outsources administrative services to the healthcare industry and will still be subject to grotesque administrative services fees.

The healthcare insurance industry has lobbied to change the law to increase co pays to 35-40% of bills so it can lower premiums to affordable levels. Increasing deductibles and lowering premiums would satisfy President Obama’s goal of affordable premiums. At the same time, it will increase the out of pocket cost of medical care for consumers who might need to use their “affordable healthcare insurance.”

The healthcare insurance industry will be forced to offer insurance to consumers with preexisting illness at an affordable cost. Some states have a high risk pool. The premiums in the high risk pools are at least 11/2 times higher than normal premiums and have higher deductibles. High risk patients must be put into the general insurance pool.

There has not been a word in the healthcare reform discussion about patient responsibility for their health. We are in the middle of the worst Obesity epidemic in American history. President Obama should declare a War on Obesity. He should promote legislation that could help eradicate obesity. He should provide patients with financial incentives to eliminate obesity and adhere to prescribed therapy. Obesity is a leading driver of increasing healthcare costs. The costs will only become grater as the obesity epidemic continues.

It is time consumers took control of their own health care dollars and their own health and well being. The defensive medicine/tort reform issue can be solved by consumers. Obesity can be solved with the government rewriting farm subsidies and a substantial public service health campaign to change our eating habits.

A consumer driven healthcare system along with the ideal medical savings accounts could solve many of the healthcare system’s problems without total government control. The government’s job should be to help with educating the public, negotiating prices that are transparent and fair and enforcing regulations to create a level playing field for consumers among the other stakeholders.

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

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Public Option vs. Ideal Medical Savings Account: Part 3

September 4, 2009
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

Dear President Obama;

Please listen. The American public doesn’t want the public option. They know America cannot afford another entitlement program. Americans do not want increased taxes. They are afraid China is lending us too much money. If and when they pull out it will be doomsday.

The healthcare insurance industry would love you to get your healthcare reform bill passed. It would increase their profits at taxpayers’ expense. The healthcare insurance industry did it to Massachusetts. The federal government had to bail out Massachusetts. Why not the entire country?

Americans want healthcare reform. They would love to provide universal care, have affordable insurance coverage, and increased quality of care. Your strategy is wrong.

There is another way to accomplish these things. It requires you to have faith in the intelligence of the American public. The strategy would decrease the cost to the healthcare system instantly. It would decrease the obscene costs for administrative services to the healthcare insurance industry. It would diminish the need to develop a massive government bureaucracy.

It eliminates the influence of lobbyists for vested interests. It would create competition among physicians, hospital systems and healthcare insurance companies. The healthcare insurance industry is drooling over your healthcare reform plan.

Americans know government bureaucracy can be cruel and inefficient. There are too many generalities that are wide open to abuse.

I received this note from a reader summing up America’s mistrust of government control. This person is neither a Republican nor Democrat. He is an American.

Stanley,

To sum up the recent post you can simply remind readers of the laughable old line, "I am from the government and I am here to help".

It was gaggy enough to see all the pigs at the trough getting 100’s of billions.  It will make everyone wretch just watching the same participants helping themselves to trillions of dollars worth of slop.

Heaven help us.  Neither the press nor the Obama fans can see through this smokescreen.  God, haven’t people figured out that when the government doles out money poor people don’t get helped, rich people do.  Does foreign aid help poor people in other countries.  If it did poverty in Africa would have ended decades ago.

Go back to the days of Lyndon Johnson.  We fought the war on poverty and lost that.  We lost the Drug War.  We lost the Vietnam War, we are losing the Afghan and Iraq Wars and we are well on our way to losing the war on the high cost of healthcare.  All of these efforts were lost not because they weren’t laudable goals, but because they were not properly considered.  As you know, some we should not have fought, others we should have fought differently.

Interestingly, the only real win we have had in the last forty years was the war on welfare and it came about because something was taken away, not added. 

Is there a lesson here?

L

How do you accomplish your goals and have the American public trust you once more? You can accomplish your goals of universal care, affordable insurance and increase in quality of care by putting individuals in control of their health and healthcare dollars.

This must sound radical to a liberal. If you permit consumers to drive the healthcare system they will drive the prices down.

How would a consumer driven healthcare system work using an ideal medical savings account?

Employers, states, and the federal government are currently paying healthcare premiums at very high administrative service fees to the healthcare insurance industry. Many self employed are paying the entire healthcare insurance premium with after tax dollars making their cost at least 35% higher than employer based coverage. Most cannot qualify for insurance because of preexisting illness.

The healthcare insurance industry controls the premium dollars. Patients have no financial incentive to be responsible for their health or healthcare dollars. The goal of a consumer driven healthcare system is to create a system that would provide incentives for consumers to be a watchdog for their healthcare dollars.

If these payers gave half of the $12,000 per family per year to consumers and permitted them to keep monies unspent in a retirement account, then patients would be motivated to use their healthcare dollar wisely

If consumers with chronic diseases perform well (weight loss, diabetes control, asthma prevention, COPD and heart disease prevention) and stay out of the ER or hospital because of proper maintenance they should receive a bonus for their retirement fund.

The fees for services would have to be negotiated beforehand as we presently do. All fees should be totally transparent. You would have 300 million people watching and reporting their costs or care.

The remaining $6,000 would buy high deductible coverage that would provide first dollar coverage. The healthcare insurance industry would do very well. If they quit Fidelity or Vanguard could do the bookkeeping.

Think of all the administrative costs saved on the first $6,000. Think of all the middlemen expenses avoided.

Medicare cost per patient in only $6600 per year including the last 30 days of life. The average cost of younger persons is much lower. Cost of care would be decreased because physicians would be paid at point of service. If the cost for medical care was over $6000 for a patient’s care first dollar high deductible insurance would take over.

Medical care is the relationship between the patient and the physician. If you provide the tools and money to create a transparent relationship without middlemen the patients would make the cost decrease as we have seen in other industries. America would have an affordable system.

If the employer became an extender of the physicians care and a patient advocate the costs would drop.

Employers, patients and physicians have the same goals. All are at the mercy of the middlemen (healthcare insurance industry).

This is the American way. It can be done.

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

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Public Option vs. Ideal Medical Savings Account: Part 2

August 22, 2009
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

The Public Option is a misnomer. It will not be an option. It will become the only choice.

The intent of the Public Option is exactly as Barney Frank described in his off the cuff interview. It is a critical step to a single party payer system government. Representative Anthony Weiner has confirmed the intent of the Public Option. President Obama has been saying it in code all along.

The Public Option is a critical step on the way to a single party payer since the Democrats do not have the votes for a single party payer at this time. A single party payer system would work if it would not be paralyzed by a bureaucracy, did not run out of money, did not engage in rationing of care and permits patients to make their own medical decisions.

Medicare is running out of money and Social Security and Medicare has 107 trillion dollars of unfunded liabilities.  Medicare deductibles are constantly being increased. Physician reimbursement is constantly reduced. A 300 billion dollar reduction in physician reimbursements is scheduled for 2010.

Investor’s Business Daily revealed President Obama’s goal on Wednesday, July 15th one day after HR3200 was published.

“Right there on Page 16 is a provision making individual private medical insurance illegal.”

The Investor’s Business Daily was not sure its interpretation was correct so they checked with the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

“LIMITATION ON NEW ENROLLMENT.— LIMITATION ON INDIVIDUAL HEALTH INSURANCE COVERAGE page 16

IN GENERAL.—Individual health insurance

coverage that is not grandfathered health insurance

coverage under subsection (a) may only be offered

on or after the first day of Y1 as an Exchange-participating health benefits plan.”

President Obama has promised we could keep our present healthcare insurance if we like it. It will be grandfathered in. Otherwise, we will have to buy insurance from Healthcare Exchange-participating health benefits plans.

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

“Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington’s coverage.”

If an individual changes healthcare insurance carrier he cannot buy private insurance from another company except through the certified healthcare insurance exchange.

Those who currently have private individual coverage won’t be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private unregulated carriers.

“What wasn’t known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law.”

On average, consumers change insurance carriers every eighteen months. The Healthcare Insurance Exchange will regulate the kind of healthcare insurance available.

The healthcare insurance industry has abused all the stakeholders. The consumer should be protected from abuse.

However, the healthcare insurance industry will continue to abuse the government and taxpayers. It charges the government a 15% administrative service fee to process claims.

Consumers will be forced into the government subsidized public plan. Employers will be happy to pay the 8% of their gross revenue. Employers are currently paying 18% of their gross revenue to the healthcare insurance industry. The healthcare insurance industry will not compete with the government. It will withdraw from selling healthcare insurance.

By default America will have a single party system, with an enormous bureaucracy and an enormous deficit.

Another downside is individuals will be paying public option healthcare premiums with after tax dollars. Premiums will be determined by means testing. Healthcare costs could become higher than today’s healthcare insurance premiums between tax rates increasing and the surtax for healthcare.

The cost will go down only by decreasing physicians’ and hospitals’ reimbursement. Six hundred billion dollars are scheduled to be removed from Medicare payments as the number of seniors covered increases. The result will inevitably be a further rationing of medical care for seniors.

HR 3200 is going to outlaw health savings accounts (HSAs) Health Savings Accounts are not as good as Medical Savings Accounts. HSAs do not provide enough incentives to patients to control their health and healthcare dollars. It keeps the healthcare insurance industry in control of the healthcare dollars.

Eliminating alternative forms of healthcare insurance has been a goal of Democrats for years. They want to crush any creative alternative.

“With HSAs out of the way, a key obstacle to the left’s expansion of the welfare state will be removed.”

Washington shouldn’t be killing business opportunities, or limiting choices, or legislating major changes in Americans’ lives. It should be making rules to eliminate abuse of systems, and providing incentives for individuals to be innovative and efficient.

The public option won’t be an option for many, but rather a mandate for buying government care. A free people should be outraged at this advance of soft tyranny.

Healthcare reform is not about better healthcare for Americans. It is about the government controlling our lives and decreasing our freedom to choose.

I would suggest the following note.

“We do not want the government to control our lives and increase our taxes. We want affordable, universal healthcare coverage that does not limit access to care. We want control over our healthcare dollars.

You can reach you Congressional Representative with the links below.

https://writerep.house.gov/writerep/welcome.shtml

http://www.senate.gov/general/contact_information/senators_cfm.cfm

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