WyBlog

Debunking a blogger's list of "Healthcare Reform Myths Debunked"

Can you "debunk" a "debunking"? It's certainly a rhetorical tongue twister! At any rate, Mike Buffington stopped by the WyBlog yesterday to say "I don't think I have ever agreed with you on anything" but he liked my latest Rule 5 post.

Mike kindly left a link to his blog so I checked it out. Recently he posted Healthcare Reform Myths Debunked. But before he teed up the straw men and whacked them out of the park he enumerated "8 ways reform provides security and stability to those with or without coverage".

That's what I want to talk about, because if this list is indeed the crux of the Obamacare plan, then we're all doomed. It all sounds so perfectly reasonable, except if you've ever been in the position of actually paying for health insurance.

Here's Mike's list:

1. Ends Discrimination for Pre-Existing Conditions: Insurance companies will be prohibited from refusing you coverage because of your medical history.

We already have this, if you maintain a "chain of coverage", with no gaps longer than 60 days. There's a good reason for this restriction. Otherwise a sick person could drop coverage until he needed his medical bills paid, sign up for this new mythical no-pre-existing-conditions policy, and charge the insurance company up the wazoo for treatments. He can avoid paying premiums while still reaping the benefits of having insurance.

Now some will say "but, Obama will make sure everyone has insurance". Great; the existing laws are adequate to protect your rights. If you didn't have insurance, you have to wait a year for coverage of pre-existing conditions. If you had other insurance, coverage is immediate. This is a fair trade-off.

These two provisions will do more to escalate costs than any others in Obama's plan. Why? Because people need to have "skin in the game" in order to act responsibly. When every doctor visit is free, people will go to the doctor for everything. It's human nature. There will be no incentive to act responsibly, to decide if your sniffles or hangnail are truly problematic or merely an inconvenience. Unlimited "free" doctor visits (eliminating co-pays creates that effect) means people will seek out their doctor a potentially unlimited number of times.

A shortage of doctors, or rationing of care will be the inevitable result.

I know of this firsthand, because as a small business owner we see a direct correlation between our employees' health care claims and our renewnal premiums. When we increased our co-pays our employees went to the doctor fewer times a year. Curiously they didn't take more sick days. Hmmm. Perhaps that means some of those doctor visits really were superfluous?

This is the real philosophical disconnect between left and right on the healthcare debate. If you've never been responsible for paying for health insurance you cannot grasp the simple fact that resources are finite but demand is not. Think of it as the buffet effect; when you're ordering a la carte you pick the meal you can afford, when it's "all you can eat", you gorge yourself. Liberals want an endless healthcare buffet; I want to know who's going to pay for that. (Nevermind that buffet food is usually of inferior quality! - Ed.)

As I've said elsewhere, I'm not opposed to the idea of "reform". But, I believe that people need to have a vested interest in their health care and in how their insurance dollars are spent. That is, co-pays and deductibles are necessary to ensure that limited resources are not overly burdened.

4. Ends Dropping of Coverage for Seriously Ill: Insurance companies will be prohibited from dropping or watering down insurance coverage for those who become seriously ill.

Even if they stop paying for their insurance? This is one of those liberal chimeras that always crop up with tear-jerker anecdotes about the guy on his deathbed who was denied life-saving treatments by his evil HMO. You get what you pay for. If you buy bargain-basement health insurance, you can expect shoddy service and "gotchas". The answer isn't more regulation; it's in helping consumers make better informed choices when selecting their healthcare coverages.

In a truly competitive system the bad HMOs will be run out of business, or left to deal in the shadows with the people who want to try to get by on the cheap. It shouldn't be our job to protect everyone from themselves. So if some folks want to cut corners that should be their choice. With liberty comes responsibility, even if it means you are responsible for hurting yourself.

5. Ends Gender Discrimination: Insurance companies will be prohibited from charging you more because of your gender.

You know, this is one of those liberal dogmatic issues that I just don't understand. I work in life insurance. Liberals complained about gender discrimiation in life insurance rates. Guess what? The rates are actuarily sound. Women live longer so their rates were less than those charged for men. On the flipside, since women do live longer their annuity payouts were lower per month. (If you don't understand the concept of the present value of money then go learn some math before proclaiming this practice "unfair".)

So what do you think life insurance companies did when faced with mandates for "unisex" rates? Yup, they raised the rates for women. And they lowered the annuity payouts for men. Maybe it made some feminists feel better, but believe me when I tell you that everybody got screwed by that one.

Can anyone honestly believe that health insurance actuaries are any less savvy than life insurance actuaries? Half the population will end up paying higher rates, but I guess it'll make somebody feel better about something. Maybe.

6. Ends Annual or Lifetime Caps on Coverage: Insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive.

Another cost increase. Annual or lifetime caps exist because some people want lower cost insurance plans. In exchange for a lower premium they get a reduced benefit. Eliminate the reduced benefit, and all you do is raise the cost. People should be free to decide for themselves how much coverage they're willing to pay for.

7. Extends Coverage for Young Adults: Children would continue to be eligible for family coverage through the age of 26.

Ah yes, the Peter Pan provision. Why grow up? Age 26, why not age 35? Or 40? At some point you have to become an adult. It's 18 for everything except drinking alcohol or buying cigarettes. I'd rather see those age restrictions lowered than have 26 year olds who are still seeing their pediatrician when they get a case of the crabs.

8. Guarantees Insurance Renewal: Insurance companies will be required to renew any policy as long as the policyholder pays their premium in full. Insurance companies won't be allowed to refuse renewal because someone became sick.

Here's another provision that I don't get. I think he's missing the obligatory "at the same rate as last year" wishful thinking line. Renewals are always available (if not from the same company, then certainly from someone else in a truly competitive market), but perhaps not at the same rate as you were paying. Does bread cost the same this week as it did last year? Sometimes costs go up. Deal with it.

Why not try multi-year plans instead? You can buy term life insurance for 10, 20, even 30 years at a fixed annual premium. Yet health insurance is sold strictly year to year. I'd like to see a hybrid product, multi-year health insurance with an accompanying life insurance component. If you get sick and die, the life insurance pays off to compensate the health insurer for your end-of-life claims. Buy it when you're young and you're covered for life.

And that's an example of really thinking out of the box. But so long as the president and his minions are going to use insurance companies as a convenient whipping-boy those companies have no incentive to propose any innovative solutions. If President Obama was really interested in complete healthcare reform he would have brought actuaries to the table instead of just relying on ACORN, MoveOn.org, and the SEIU to dictate to Henry Waxman what they want in order to fulfill their selfish dreams.

Posted at 20:59 by Chris Wysocki   []   Comments | Archived | Perm Link |
Technorati Tags: Obamacare   |   Tweet