Tuesday, July 31, 2012

Founding Fathers, States Rights and Individual Freedoms

The number one concern of our founding fathers and the framers of the Constitution was having the federal government get too big.  They were afraid the federal government would infringe on the rights of the states and restrict the freedom of individuals.
This is why several states would not adopt the constitution until the first ten amendments were added.  The ninth and tenth amendments specifically limit the size of the federal government. 

The Ninth Amendment

        “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

The Tenth Amendment

        The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

        These two amendments seem pretty clear and straightforward.  The founding fathers thought they made it clear the federal government would have limited powers for things like foreign affairs and consequently would stay small in size and expense. 
        What happened?  What would the founding fathers think of the 3.6 trillion dollars our federal government now spends every year, and almost 16 trillion dollars of debt?  What went wrong?  This cannot continue. We must stop this power and greed in Washington.  We are creating a political elite ruling class.  We must fix this problem or we will all lose our personal freedoms eventually.  It is already happening in several areas of individual and states rights. Unfortunately, we do not get too concerned if the loss of these rights and freedoms do not affect us personally, and before we know it, it is too late. 

        We must get involved and reduce the size of the federal government and the government debt now before it is too late.

Tuesday, July 24, 2012

The Solutions To Affordable Health Care

The primary reasons for the rising health care costs are huge service and administrative costs and the lack of competition.  So how do we fix it?

Actually the solutions are quite simple.  We eliminate the majority of service costs.  This means taking the cost of filing insurance claims away from the health care provider, and eliminating the majority of the claims service cost from the insurance provider.
We promote true major medical insurance and make
changes to eliminate first dollar coverage medical insurance.  We promote and encourage medical savings plans.  Medical savings plans will give people cash reserves to pay predictable, routine and preventative health care costs.  This will promote competition and eliminate the cost of insurance company involvement. 

Simple right?  How do we do it?  Actually, it is quit simple.  I think I could write the legislation myself and it probably would be less than ten pages long. 

1.          Make the discounting practice to insurance companies illegal.  Individuals paying for their normal routine health care must not be penalized. 

2.          Make it illegal for any health care provider to have direct contact with any medical insurance company, or ask a patient for their medical insurance.  Service companies or accounting firms can provide this service if the patient desires, but it will not increase the cost of health care from the health care provider.  These companies can hire the displaced workers from the claims departments of the insurance companies and health care providers.

3.          Encourage true major medical policies with high deductibles of maybe $50,000 or more per injury or disease.  Deductibles are per injury or disease, and NOT annual.  These policies will have no benefit limit and no co-pay.  We must not run predictable, routine and preventative health care costs though medical insurance.

4.          Encourage individual medical savings accounts that accumulate over the years.  Money put in these accounts would be tax exempt if we continue with our archaic tax system.  These savings accounts could be used to pay predictable, routine and preventative health care costs.  It could also be used for major medical insurance premiums in the event of an emergency.  Maybe major medical insurance premiums could also be discounted with proof of a medical savings plan. 

5.          A “Luxury Tax” will be imposed on any first dollar coverage medical insurance.  This will have to be implemented in stages based on a person’s age, as older people do not have the medical savings accounts in place.  Eventually this “Luxury Tax” should be as high as 100% of the premium. 

6.          There will always be poor people.  Private charity or government run clinics and hospitals similar to the present VA hospitals and clinics will provide health care for the poor. 

This solution may seem radical, but think about it.   It
will work, and it will reduce health care costs.  The biggest roadblocks for this simple solution are politicians and insurance companies, which will fight the change, because it will cost them money and power.  I think most health care provides will welcome the change.
I believe this could reduce health care costs by 40% in the first year and as much as 80% went fully implemented.  Think about. It makes sense. 

Tuesday, July 17, 2012

The Medical Insurance Industry and The Health Care Industry

        On March 8, 2012 I posted a blog titled “ The Greatest Marketing Job Ever.”  This blog points out how the medical insurance industry sold the public on the idea of medical insurance with first dollar coverage. 
They also sold the public on the convenience of having the health provider handle the claim.  They sold the health care provider that this was a needed service for their clients.  They also sold the health care provider that this system would help them get paid for their services. 
This sounds great, but all this service costs.  Thousands of people are employed in medical billing and claims for both the insurance company and the health care provider.  Every health care service provided is submitted to the insurance company, even if pays nothing on the claim.  The cost of the claims process is enormous and is driving up the cost of heath care. 

Another problem in my option is the practice of discounting the cost of health care services to the insurance company.  The insurance company obviously encourages this practice.  It also means the health care provider must raise their prices to cover the discounts. 
Health care providers discount their services by as much as 70% to the insurance providers.  This means an insurance company would only pay $300 for a $1,000 service. 
Which figure do you think is used for your deductible or co-pay requirement.  If you think the $300 figure is used for those computations, you are just being naive.
It also means that if you want to buy a true major medical policy and pay for your normal predictable and routine health care personally, you will be paying $1,000 for a $300 service.  Some politicians like U.S. Senator Charles Grassley of Iowa has been trying to stop the discounting practice for years with little success.
Since many people do not ask about costs for health care services, there is little competition.  People have the attitude, “It is covered by insurance anyway so who cares.” 
There was a study of heath care costs in our area.  One health care service studied varied in price from $1,000 to $6,000.  Were there differences in quality?  Yes, but quality had little correlation to the price.  This seems to be the same as with most businesses.

How much has this first dollar coverage medical billing raised the cost of heath care?  A very conservative estimate is 100%.  Personally, I think the real cost is closer to 500%. 
How do we fix the problem?  It is a problem that has been caused over the last sixty years and can’t be totally fixed over night, but some change could be done over night.

Specifics next week.

Tuesday, July 10, 2012

Affordable Health Care and Medical Insurance

        Much to my surprise the Supreme Court has said “Obama Care” is constitutional.  There are a lot of different opinions on the specifics of the decision and what it means.  My concern is with providing affordable health care.   
        I don’t think “Obama Care” can do that even under the best possible scenario.  The reason is we are attempting to fix a problem caused by “First Dollar Coverage” medical insurance with “First Dollar Coverage” medical insurance.  It makes no sense.  It cannot achieve the objective of affordable health care. 

        One of the major problems in providing affordable health care is differentiating between “health care” and “medical insurance”.  These are two separate things and the terms are not interchangeable. 
        It seems most politicians and even at least one Supreme Court Justice does not understand the difference.  They keep interchanging the terms.  How can we deal with a problem if we don’t identify and define the problem?

        Many people think they are guaranteed the best health care because they have good medical insurance.  They may be wrong and will never now the difference until it is too late. 
        Many people don’t even know what coverage they have.  I hear statements like. “I have the best” or “I have full coverage.”  This often means people don’t know what coverage they do have. 
The leading cause of bankruptcy in this country is medical expenses.  Over 40% of all bankruptcies are because of medical expenses.  
        The really reveling part of these bankruptcies is the majority of these people had medical insurance.  They thought they were covered.  Not true. 
        There are several problems with medical insurance including; annual deductibles, co-pay requirements, excluded coverage, maximum limits for coverage, and continuing monthly premium payments.  If you are sick and cannot work, you have no salary or income.  Who pays the premiums, deductibles, and co-pay requirements? 
        If you are independently wealthy or part of the political elite there is no problem, but there is a problem for the rest of us.  Medical insurance premiums may have been offered as a benefit of our job, or we may have paid them personally.  We have paid these premiums for years with little benefit in most cases, but when we really need it for a catastrophic illness or injury, we end up with no medical insurance coverage. 

        Next week I will take a closer look at the working of the medical insurance industry and the health care industry and how it is hurting our health care and costing this country. 

Tuesday, July 3, 2012

Muslim Brotherhood President in Egypt

        Egypt elected a new President last week.  The new President is from the Muslim Brotherhood.  I was not surprised by this event. 
What did surprise me was a news commentator making the statement that Las Vegas would have given a million to one odds that this would not happen two years ago.   I could not believe the stupidity of this statement.  I would have taken some of that action at a million to one.  How naive are people?
Egypt had financial problems.  There were riots and protests in the streets.  The Muslim Brotherhood was a major force in those demonstrations.  Who in their right mind did not think the Muslim Brotherhood gaining control was a possibility.
At lot of people like Glenn Beck made the prediction over two years ago.  Oh, that’s right Beck is a “Conspiracist” so his predictions don’t count.  Not even when he is right.  Sorry I mentioned it.

Are we so concerned with making a statement about Muslims that might be considered politically incorrect, that we ignore the facts?  Not all Muslims are bad, but some Islamic extremists are bad and we cannot ignore that fact. 
        I am not even saying a President from the Muslim Brotherhood is a bad thing for Egypt.  I remember when John F.  Kennedy was elected President.  Some people thought the Pope would be running the country.  It did not happen. 
        If Egypt’s new President tries to rule under Sharia law, there is a problem.  People would lose their freedom and in some cases, their lives.  That would concern me and I hope it is not the case.  We just have to stay alert and not ignore the facts.