Sunday, February 28, 2010

Health Insurance, a Financial Tool, not a Government Entitlement

The administration keeps on telling the world that there are 40 million people in the US without health insurance. It’s as if they want it real bad and can’t get it. Are the 35 million people on food stamps a part of this group?  How about the 10 million people on unemployment?  They interviewed a gentleman the other day about health insurance. He said he was doing without, because he was putting his daughter through college. Now if they were to pass health care, he wouldn’t have the option to make that decision; the money for his daughter’s education wouldn’t be there.

Once you buy the idea that there are 40 million people that have no health insurance, then they hit you with the statement that these same 40 million people can’t afford health insurance. Back up and look at it a different way. 40 million people are self insured; they pay their doctor bills out of pocket. All insurance is, is a way of paying for future health costs in advance. Some choose to pay as they go. That plan works OK unless they have a very serious illness. Of those 40 million people that choose to be self insured, it takes a major illness for them to consider health insurance as unaffordable. It’s not the insurance that is unaffordable; it is the 20 to 40 years of missed payments that come due when you get sick. The idea that the government can manage anything cheaper than private enterprise has got to be a joke.

In my 64 years, I have spent about $4,000 total (including insured amounts paid) on doctor bills. Being self insured would have saved me quite a bundle, probably about $20,000. Oddly enough, I have spent probably over $8,000 sitting in a dentist chair. It is interesting to note, as we grow old, that Medicare doesn’t pay for dental fillings or dentures. I guess that’s why you don’t look a gift horse (Medicare) in the mouth.

Last Wednesday a Congressional committee grilled Angela Braly the CEO of Wellpoint Health Insurance (Anthem Blue Cross). House member Bart Stupak was upset that Angela was paid a million a year and the Company made 2.7 billion dollars. The fact that it was a 4 percent return on investment, didn’t sink through Representative Stupak’s head. He kept referring to the 2.7 billion dollar profit, being a lot of poor people’s insurance premiums; that was just too much profit for a private insurance company. He thought that a 39 percent increase in premiums was outrageous. As an investor, a 4% return is pretty poor also. Common sense suggests that no company would raise rates 39 percent just to make a profit. Irritating your policy holders isn’t doesn't help when it comes to renewals.

It's hard to believe that health care costs are increasing at 12 percent a year. Look at it other way; we know the government is printing too many dollars, their decrease in real value leads to the false assumption that prices are increasing. To the man on the street, if wages and prices increase together, it’s inflation. If your wages stay the same, those price hikes are real.  Ouch!

Health insurance is like buying a car, cost is an issue. If you want a Lamborghini, you need big bucks. If you want to buy a Ford pickup, it is probably well within your budget. With the government's proposed health plan, you are "entitled" to the Lamborghini. The trouble is, you order the Lamborghini and you get a Ford pickup. Gee, how did that happen?


Anonymous said...

Come to California. If you are a State employee, you retire with FREE health care, for life, for yourself and your spouse, even if you die during retirement.
Also, you can cash out unused sick time, and vacation time. Often, these golden handshakes are $100,000. or more at retirement, in cold, hard, cash.

frakrak said...

stoxarJim you are right 4% return is far removed from being excessive by present corporate standards!

Perhaps what you are seeing with
American consumers is the fact they are pulling out of private health because of a lack of confidence in the products being sold to them?

There was a great re-adjustment here when public health was introduced (medicare), private health funds lifted premiums to cover the flight out of their funds. Another headache for Obama, (hope he has factored that one in?)

No doubt what ever he has budgeted for he will need to prop up these funds from total collapse!! So the American tax payer will need twice the expected ammount to get the new system up and devouring every state and federal budget properly -
Should provide a great "scapegoat" for the biggest welfare recipient in your country (Wall Street)! At least it won't be the banksters putting the final nail in the coffin!!!

frakrak said...

Stoxar? think that may have been the word verification Jim .... found my glasses!

Shift said...

I just want some consistency.

If health care is not a right, I want Medicare disolved! I do NOT want to spend MY money on a bunch of old people that should just be put on an ice shelf and cut loose into the great beyond.

Worthless, resource-sucking, old people need to stop taking my tax money.

Don't even tell me about how these old people put money into the system. I have been putting money into the very same system for over 25 years and I expect NOTHING. Because nothing is exactly what will be left after the current crop of old people have taken everything.

To all of you old people out there: GET A JOB! PAY YOUR OWN INSURANCE! GET OUT OF MY POCKET!

frakrak said...

Great suggestion re the ice shelf idea!! Gotta be the first time I’ve really feared global warming though; seems to be quite a few of ‘em floating around the Pacific and Atlantic at the moment!

As part of the medicare legislation Obama could include a yearly “adventure holiday” for the most prolific users of the service! The demographic would have to be for the over seventies though, (that would keep Jim and myself safe for a few more years).

One of the greatest statesmen the world has seen for quite some time, Muammar Gaddafi, has just declared Jihad on Switzerland. I am betting that this will cure more of the world’s ills than medicare ever could.

Shift said...

Hey frakrak,

You were supposed to be offended!

Man, my trolling skills is lame :(

Take care

frakrak said...

The best advice anyone can give at the moment Shift, would be to buy a comfy deck chair and keep a sense of humour ....

Technical Tony said...

Unfortunately, I think you are missing two important points:

1) Anyone and Everyone who goes to the ER, e.g. after getting hit by a car, has defacto 'insurance'. So I don't understand why you're complaining about efforts to nationalize it. At the very least, let's nationalize the CATASTROPHIC coverage.

2) You claim that you've only ever spent $4000 on insurance. But were you including your employer's monthly contribution to your health insurance, as well as your own paycheck deduction?

Jim in San Marcos said...

Hi Anon 5:52

That could change if the State goes into bankruptcy with these retirement plans. It might sound far fetched, but the states can't pull money out of thin air.

I can vouch for unused sick time and vacation time being applied towards retirement, that's why I don't get sick.

Thank you for your comments.

Jim in San Marcos said...

Hi Frakrak

I think that a lot of the people pulling out of health care, are those that are responsible, with families. When money is tight, you have to shoulder more risk, so you drop health insurance. In most cases, it will be no problem. The problem lies with the insurance company's customer base. You won't drop the plan if you anticipate surgery or are sick already. Then after you have the surgery, you drop the plan. The insurance companies are facing a problem with the healthy people dropping out of the plan. It is these premiums that help pay for the people who are sick.

I haven't quite figured out what you mean with the word "Stoxar."

Jim in San Marcos said...

Hi Shift

I look at it this way, most kids today wouldn't bother to support their parents or in a lot of cases, can't afford to. Social Security and Medicare are a way to force our kids to cover our needs without us old folks having to hold out our hand.

Medicare is a very noble idea, but it is being found that in the last 20 days of our lives, we can wrack up 100k of doctor bills and the system is paying them. I think this is where the program gets stupid. It works for the doctors and hospitals. We can't blame them, but there has to be life time limits on health care costs per person. We are all going to die.

The thing that worries me, is that the present system of Medicare is unsustainable the government will run out of money by 2015.

The thing you are looking at here that is unnoticed is the people who vote. A rule of thumb is that the percentage of people that vote for each age group is determined by age. So the older you are the more of you that vote. It wouldn't be a problem if we didn't live so long and died off sooner. Your Congressmen know how to get re elected. Give the silver foxes retirement benefits.

The problem is not as simple as it looks. I have suggested that maybe only franchise voters who own land and pay say $10,000 in taxes a year.--we know that isn't going to happen.

As for "old people," we are all going to get there (hopefully).

Take care.

Jim in San Marcos said...

Hi Technical Tony

I disagree. When you get hit by a car or shot by a cop, and go to ER, you get treated and what has been happening the last few years, is that the hospital goes broke and closes. If you have a heart attack in LA, you have a 45 minute ambulance ride.

Trying to shut a hospital down if you are a for-profit concern is rather difficult with all of the state laws. But if you let someone die unattended in the emergency room, the State will shut you down. Of course the newspapers play it as if this is being done to protect the public, it is really a way to back out of being a health provider.

Bottom line, you are going to die in the ambulance.

As for your second point, I think you misread me. My total medical bills out of pocket and those paid by the insurance company have totaled less than $4,000 in my lifetime so far. I have paid over $20,000 in health care premiums in my 40 years of working.

Thank you for your comments.

Anonymous said...

Watch the DVD series, "Cosmos" by Carl Sagan. I just did.

All of this seems quite insignificant after absorbing those concepts.

We are all spiritual beings riding the cycle of life over and over. A body is just like a car. It goes to the junk yard and then you get issued a bright, shiny new one.

A lifetime is just a short blip on your whole track. You've had many and will have many more.

Don't be so serious. Relax and enjoy the ride.

Nothing can ever really happen to you because you are not your name, personality or body... you are an immortal spirit.

Jim in San Marcos said...

Hi Frakrak

"Deck Chair" has a rather ominous ring to it.

I guess we could listen to the band and make a snow cone or two from the ice on the deck.

The thing that bothers me is that the Titanic was unsinkable--Congress is busy at work so I guess we can relax. On second thought,----maybe not.

Thank you for your comments.

Take care.

Jim in San Marcos said...

Hi Anon 8:49

I too, like Cosmos with Sagan.

All I can say is your drugs are better than mine.

Your thoughts were very mellow and relaxing. I wish I could see the world through your eyes.

Thank you for your comments

frakrak said...

Jim as you have said, health is a very complicated mix for a government to get right. Our Federal government is taking health back from State control. No one wants it! No one can get it right! Doctor’s fees will come under scrutiny and no doubt Obama will try and cap these fees, I wish him good luck there.

As for “stoxar” it was the word ID to publish comment (errant cursor location) apologies from me. I am overdue for another pair of glasses thru medicare :)

Good health to you and your family Jim …..

Jim in San Marcos said...

Hi Frakrak

I did that too, one time. You had me going for a minute there.

Here is a good little spell checker for internet blogging that I like Link and for anybody else that is listening, Microsoft offers a free antivirus program for download at Link

Hope this helps. Take care.

Take care, and the best to your family too.

Anonymous said...

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The Health Dude

Anonymous said...

if we were all perfect, your ideas would work beautifully. Normally, i like what you say but every now and then you just lose me