Saturday, February 13, 2010

Paying for health care

The latest I have seen from the Repub side re "Health Care Reform" comes from Repub Rep David Ryan of WI who, among other things, wants to stop Medicare and give the "elderly" $11,000 a year to buy insurance.

Laying aside the fact that the elderly have a lot of "pre-existing conditions," the fact is that $11,000 wouldn't touch the premiums. Why? Because insurance works because the risk is spread across large groups, most of the group members are contributing and not collecting. Reduce the size of the group and narrow the age requirement and the cost will go through the roof.

I saw this vividly demonstrated a few years ago when one of the companies I had retired from, and was using their Life Insurance,tossed all the retirees into a separate pool from the current employees. The price went through the roof.

Medicare is not insurance in the normal meaning of the word. The agreement is that the worker bees pay a Medicare Tax all their working life and at age 65 can receive medical and RX "insurance" at a greatly reduced rate. In fact the monthly premiums are means tested. The "poor" pay a lower price.

Of course all of this has been, is being, and will be done in the name of "fairness."

Well, as Colonel Potter is known to have said, "Horse hockey." Insurance is not "fair" and neither is "life."

You live a certain "life style" to hedge against the need to use "health care" and you purchase insurance to hedge against the cost of paying for that "health care."

When you are young and dumb the odds are in your favor. As you grow older the odds change. At some point the chest pain will probably become acute, the blood pressure high and the prostate larger.

In the past medical costs were less because the positive outcomes were less. As technology improved the heart attack became survivable and the high blood pressure induced stroke avoidable. The diseases that killed at age 50, 60, 70.....became treatable and we now live into the 80's to die of very expensive cancers.

And the prices have gone up commensurate with the positive result rate. What a surprise.

And what are the solutions offered? Well, Rep. Ryan wants to give the elderly not enough money to pay for insurance but enough to make the insurance companies richer.

And that is essentially what Obama wants to do except he wants to use a different paymaster. Of course his plan also destroys Medicare by cutting funding which will reduce services and will trigger rationing which is de facto "death panels."

That was well described by Obama's in house health care expert:

Substantively, it suggests services that promote the continuation of the polity-those that ensure healthy future genera- tions, ensure development of practical reasoning skills, and ensure full and active participation by citizens in public deliberations-are to be socially guaranteed as basic. Conversely, services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia. A less obvious example Is is guaranteeing neuropsychological services to ensure children with learning disabilities can read and learn to reason


That the current situation is not "fair" is obvious. But neither is what Ryan or the Democrats have proposed. Indeed, there is only one way to approach "fair" and that is this.

Using Medicare as a model introduce a single payer plan that covers ALL US citizens and anyone in the country on a green card/visa.

To pay for it we introduce a national sales tax paid by everyone at the point of purchase.

Doctors, clinics and hospitals will be paid directly. The payment level will obviously have to be much higher than what Medicare and Medicaid pays, but since there will be no doubt of payment the overhead associated with collections, multiple insurance companies, etc., will be reduced.

Oh, you say... "How much will the tax be?" Well, what if it was 15%? If you spend $50,000 a year, and the "rich" spend much more than that, then you will pay $7500 or a little over $600 a month.

But wait! The poor spend more of their income on food and such than the "rich." Well, unprepared food, utilities, etc. could be excluded. Of course since the "poor" are more likely to be over weight and smoke they are the ones who most likely will be needing earlier and more costly treatment.

Fair is fair, eh?

Will 15% be enough? I don't know. But I know what is presently on the table by both sides is not fair.

And if you don't want to pay for lunch, why should you eat?

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