Epiphanyblog

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The reality of the health care debate

with 4 comments

I am very partisan on this issue because I have a pre- condition: rheumatoid arthritis (RA). This is not a condition caused by lifestyle. It’s a virus. A virus that affects the immune system and probably, according to recent science, affects those who have a genetic predisposition to the disease. My father and all of his seven siblings had RA, and more than one died of complications related to the disease. In other words, no matter what I did to maintain my health I had a higher than likely chance of contracting RA.

So, how does this existing condition affect health care costs?

Before I lost my job for a mid to large size advertising agency, I paid about $100/mo. Cobra jumped my payments to $339/mo which equates to what the company and I combined to pay for my health insurance. I didn’t mind the jump in my premium because my meds – the meds which enabled me to work or even lift a saucepan or walk down the street – cost far more than $339 each month.

I can’t blame the pharma company for the high cost to me. It costs them a hellava lot to manufacture the drug, and they get no tax deductions for research and development. They have to make up their R&D enormous costs from their U.S. patients because even though those same drugs are sold worldwide, other countries’ national health care plans negotiate much lower prices for those drugs. As a result, U.S. patients make up the difference with much higher costs.

Insurance companies, though, are something else.

Recently, I looked into HIPAA. It is the continuation insurance for those who must have used up Cobra. This program, the Heath Insurance Portability and Accountability Act, was passed by Congress in the late ‘90s to allow people who had lost their jobs to continue their medical insurance when they went from one job through unemployment to another job. It was supposed to help not just the unemployed but those who chose to start their own businesses to remain covered by health care. The program was designed for insurance portability. Unfortunately, the insurance industry took advantage of the loopholes in the act and decided to charge people outrageous sums.

For most healthy families and individuals, this program is just way too expensive for any normal budget. For me as a single person, it increased what I had paid to Cobra – not my employer paid program – by nearly triple. In other words, my payments went from $100/mo for my employer program to $339/mo for Cobra to nearly $1000/mo. for a HIPAA policy. Frankly, this kind of premium increase is a budget-buster.

A few years ago, the small company I worked for a small company that had their employee medical insurance premiums increase to the point that a family of three saw their share of the premiums increase by quadruple, from aproximately $250/mo to well over $1000/mo. So, how many middle class families can afford at least $1000/mo plus the additional 20% most policies require?

Moreover, the company considered eliminating the coverage simply because of the overwhelming cost to the company. In other words, if employees paid a $1000/mo, the company was paying close to $3000/mo for that employee. That cost is just way too much for small businesses to afford. It is anti-competitive for U.S. businesses.

If a person is in the mid-twenties, overwhelmingly healthy, and your state has approved the insurance companies, you can get relatively inexpensive health insurance – as long as you stay healthy and don’t use the insurance. After all, health insurance is a bet against your health. You’re betting you’ll get sick while insurance companies bet you’ll stay well. The company only makes money if you make payments but fail to make any charges against that insurance.

When Lloyd’s of London started providing insurance, it was to shipping companies who feared the loss of their ships as a result of storms and piracy. If the ships made it through to London, Lloyd’s paid nothing. If, however, the ships sank, Lloyd’s paid up. The chances were always in favor of Lloyd’s, just as health insurance is always in favor of modern day insurance companies.

But should a person’s health and wellness be based on a bet?

One Southern Republican senator a few months ago stated that medical care was a privilege, not a right. In other words, adequate health care should only be available to those who can afford it. If you’re rich, you can get the very best health care; however, if you’re middle class or of a lesser income level, you just out of luck. You can die because you can’t afford health care. Is that kind of thinking that is what this great country is all about?

The Constitution states a great many things that prohibits the Federal government from becoming too powerful, but that document does state that the Federal government has the obligation to take care of the people. Is not creating affordable and accessible medical health care taking care of the people and our businesses?

How can any small but growing business which potentially could grow into the next Microsoft or Google do so when their health insurance costs take a huge portion of their revenues. Moreover, how do these emergent small businesses compete on price against international companies that do not have these very real high costs in their operating budgets? The answer is very simple: they can’t. International companies have a significant advantage because they do not have to pass along the cost of employee health insurance along to their customers in the form of higher prices.

What is the real reason why U.S. companies move overseas?

It’s not just salaries the employees take home. The major reason is the cost of benefits, most particularly health care. Health care alone adds approximately 30% to a company’s operating expense budget in the U.S. Moving offshore makes financial sense for companies. If you want to prove to your investors that you’re making money, you reduce your operating expenses. The best way to do that cost reduction is to eliminate employee costs. And the best way to reduce those costs is to reduce health care costs which is the greatest additional employee expense on the company’s books.

So, why are American’s up in arms – almost literally – against health insurance reform when it so obviously is in their best interests?

The only reason I can see from watching the media are the number of lies, misinformation, and partisanship being stirred up amongst people who fail or refuse to see the benefits of lower costs and greater coverage.

A few months ago I saw a documentary in which Switzerland’s national health care program was featured. The Swiss are historically very fiscally conservative; yet, during a liberal administration national health care passed against a virulent campaign against national health care. All the rhetoric used in the used now in the U.S. was put into play in Switzerland. Nevertheless, national health care passed and now even the conservatives love it…and private insurance companies said they are doing very well and are highly profitable under national health care. So, how have those companies increased their profits? They said they became much more efficient in reducing costs and, thereby, increased their profitability.

So, where is competitiveness in the U.S.?

U.S. insurance companies could do the same if they were forced to do so. Money is the only incentive insurance companies understand, especially since they do not make a price-competitive product like clothes, computers, of any of the other physical products we rely upon. As a matter of fact, health insurance is not very competitive at all. In looking at the HIPAA policies, prices varied by $20 to $50/mo. So, where is competition in this kind of pricing?

A public plan is easy.

Expand Medicare, charging a sliding scale for the service, until legal retirement age. Medicare has an administrative cost of approximately 3%. Private insurance companies have an approximate admin. cost of 17%. The highest Medicare employee salary is $150,000. Average CEO salaries for private insurance companies is well over $1M. Often it’s over $5M. Medicare is non-profit. Private insurance is for-profit which means that Wall Street sets their stock prices – equating to the value and quality of senior management – at a level depending upon profits. Private insurance companies have absolutely no incentive to lower costs. Their only incentive is to reduce claims in order to increase profits.

If the U.S. is to remain globally competitive and sustain a high quality of life, medical costs must be reduced to a sustainable, affordable, and globally competitive level.

What the far right is spewing is misleading and erroneous. Their only goal is to defeat whatever Democrats propose to increase their own ratings. They don’t care what is good for the American public or for American businesses. They only care about themselves and their incomes. I admit I do not like these people because they do a great disservice to the American people. They fail to be honest. If they were honest and used honest arguments, I could appreciate their points of view and may even like some of their ideas. However, that is not what I am hearing from the Right. They have no honest arguments. They only spew lies and misconceptions and scare tactics. That is not honest. And we as American citizens deserve better than scare tactics and lies. We deserve honest ideas.

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Written by Valerie Curl

August 19, 2009 at 5:08 AM

4 Responses

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  1. I’m sorry to hear about your condition. This is perhaps the simplest explanation of the healthcare debate I have read. Honesty is what needs to be shared among Americans, and we have been deprived of that for many years. Unfortunately, profit has become more important than trust.

    lockeanddemosthenes

    August 19, 2009 at 5:19 AM

  2. Glad I came back to this site some new very interesting items which I wanted to know more about. Great work on your site.

  3. Greatings, Interesting, I`ll quote it on my site later.
    Have a nice day

    Eremeeff

    September 12, 2009 at 6:23 PM

    • I hope you do, not just so that I get better Google ratings but because there has been so much misinformation put forward. As Eliz. Warren said today, the American family needs to have someone on their side.

      Valerie Curl

      September 14, 2009 at 8:22 PM


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