Tuesday, November 26, 2013

Was Obama Care Designed To Fail?

     This is an interesting idea.  The Affordable Care Act is the crowning achievement of the Obama Presidency and it seems to be a total disaster.  How is this possible? 
     The web site does not work inspite of an almost unlimited budget and more than enough expertise available to roll it out in a much shorter time than the government had to work with.   I saw one comparison showing how we won World War II in less time than the government had to get the website functional. 
     The Affordable Care Act is 2,400 pages of legalese that no one seems to have read.  It is so complex that I probable could not understand it or comprehend it if I did read it.  Maybe Nancy Pelosi was right when she said, “We have to pass it to find out what is in it.”
     I could never understand how the unions backed it, but they have been granted exceptions.  I never understood why some insurance executives supported it, but now we know they were promised bailouts if claims were too high.  The political elite is also excluded.  The rich are not affected.  It seems like only the working middle class is affected.
     We were promised we could keep our medical insurance if we liked it.  We were promised we could keep our Doctors.  We were promised lower medical insurance premiums.  People with medical insurance through their work thought they would not be affected.  We now know all that was not true.  Were the people making these claims misinformed, incompetent or just lying?  It’s just politics, so who cares?
     In order for Obama Care to work, a lot of young healthy people that do not have medical insurance must sign up with higher premiums than they would have had prior to the implementation of the law.  This is further complicated by the fact that the law allows kids to be covered under their parent’s policy to age 26.  The numbers don’t work.  They can’t work.  Some right wing nuts have been saying this for years.  I am proud to be one of those nuts.
     Forget the web site for a minute.  What is going to happen with Obama Care?  We already know many people will lose their medical insurance.  Some will have to change Doctors.  Some will lose their jobs or have their hours cut to part-time. 
     More people will sign up for Medicaid.  Some people will receive subsidies from the government to pay for their medical insurance.  Unfortunately, they will still not be able to afford the deductibles.  The cost for the government will continue to escalate. 
     More government departments will be created and more employees will be hired.  Eventually, Affordable Care will grow to the point it will be more efficient to go to a Single Payer.  This is what the Progressives wanted all along, but they knew they could never get there in one step.  Is Obama Care just one of the steps?  Did the political elite know it could never work? 

Tuesday, November 19, 2013

Business Myths

In my book Business Fits: How to Find the Right Business for You! I have a chapter called “Myths about Starting a Business.” The myths discussed are:

·       Starting a business is too risky.  A good job is the only real security.

·       Start small and grow.

·       Banks make business loans.

·       Build a better mousetrap and the world will beat a path to your door.

·       I will know the right business when I see it.

·       I need to find a business that can’t fail.

·       Why should I pay a franchise fee and continuing royalty for something I can do myself?

·       Do what you know and love and you will be a success.

If any of these business myths peaks your interest, you can order Business Fits at: https://www.createspace.com/4290991

Tuesday, November 12, 2013

Thunderbird or Pinto

When I was a Ford-Mercury dealer in the early 1970s, I sold both Thunderbirds and Pintos.  Both cars were both great cars for the time.  The Thunderbird was a true personal luxury car, and usually what my wife chose to drive.  The Pinto was also a great car, but did not have the comfortable ride or the equipment of the Thunderbird.  The Pinto did have a lower purchase price and was more economical to operate and maintain. 
Both cars filled a need and the more economical Pinto offered some people the opportunity to buy a new car that could never afford a new Thunderbird.  This is the free market system.  As a dealer, I liked to sell a new Thunderbird because I normally made more profit selling a Thunderbird than selling a Pinto, but I sold a lot more Pintos than Thunderbirds. 
What would have happened if the government passed a law that all Pintos were “Sub Standard” and everyone had to buy a Thunderbird?  The answer is simple.  Most people would not have been able to afford a new car.  They would have to keep their existing car, buy a used car, use public transportation, or walk.  
Now I understand that Progressives would say the evil car dealers and manufacturers should just sell everyone a Thunderbird for the price of a Pinto.  Unfortunately, neither the dealer nor manufacturer can stay in business this way.  The other option is for the government to subsidize everyone that can’t afford a Thunderbird. 
This makes sense only if we want bigger government, more taxes, less personal freedom, and a socialist country eliminating the free market system.  Kind of sounds like Obama Care doesn’t it.  Personally, I don’t like the idea and will vote accordingly.

Wednesday, November 6, 2013

Insurance Deductibles

When I was a Ford-Mercury dealer, I needed insurance for the business.  This insurance policy was normally referred to as Garage Keepers insurance.  One of the things it covered was damage or losses to vehicle inventory.  The majority of the policies at that time had a per vehicle deductible much the same as the deductible on your personal vehicle with your Family Auto policy.  For example, you might pay the first $100 to $500 of any damage claim.  This is fine for an individual, but presents a risk for an auto dealer. 
The problem with a per vehicle deductible for a dealer is that damage to a lot full of vehicles could be a catastrophic loss for the dealer.  Protecting against catastrophic loss is what insurance should do.  I knew a Ford dealer that had his entire new and used car inventory damaged by a hailstorm.  The damage per car was not huge, but the total damage was devastating.  Since he had a per vehicle deductible, the storm almost bankrupted the dealership. 
For this reason, I demanded an insurance policy with a Per Occurrence deductible instead of a per vehicle deductible.  Some companies would not write the policy at the time, but I found one that would.  By increasing the deductible amount, the premium remained the same.  This meant I had a higher deductible and loss when there was damage to a single vehicle, but I was limited to the same deductible for a catastrophic loss to many vehicles.  The free market system does work if we can keep the government out of it. 
In the early 1970’s car dealers still made a big deal of introducing the new models.  The introduction was usually done at night and dealers often made it a real party with food, drinks, balloons and spotlights in the sky.  Transport companies covered vehicles so the public could not see them until the day they were to be introduced.  I had rented the grandstand at the fair grounds to store and hide vehicles until the introduction day.  Some kids broke into the building and damaged almost all the vehicles.  It would have been a catastrophic loss if I had not had the Per Occurrence deductible. 
All insurance should be meant to protect against catastrophic losses and not first dollar loss that should be assumed risk.  How did we ever get into the mess we are in with health care and first dollar billing medical insurance?  See my blog of 3/8/2012 titled, “The Greatest Marketing Job Ever In The US.”
First dollar billing medical insurance is a joke.  With all this administrative cost, it is no wonder our total health care cost is five times what it should be, and anyone that thinks the federal government can handle this administrative cost better and cheaper than the private sector only has to look at history. 
        Think about the deductibles with medical insurance.  Your deductible is annual.  You start over ever year.  How does this protect you from a catastrophic illness or accident? If you are sick or hurt so you can’t work, how do you pay the premiums and deductible?  Catastrophic medical insurance should have a large deductible per illness or injury, and not an annual deductible.
        The only solution for affordable health care is catastrophic medical insurance with a large per illness or per injury detectable, and medical savings plans.  Why do we continue to look to the federal government and insurance to solve a problem they created?  The government can never to something as efficiently as the private sector with the exception of ……  Sorry, I can’t think of anything.