Look, I know there is rhetoric on both side and we all fall for the one liner, me included. We all want something done about health care, but when you learn about how this thing was put together, you will think differently about this, maybe.
I was watching C-SPAN last night and saw this very informative video from MIT professor Jonathan Gruber, who co-wrote both the Massachusetts program and the current Federal bill being voted on. He was a paid participant and openly admits he is biased towards the bill, but I appreciate the honesty. What I found striking is that he openly admits that 90% of this bill is designed for coverage and only 10% is geared for cost controls. He also admits they are trying a “spaghetti approach” to controlling costs, meaning they are throwing 37 different pilot programs against the wall to “see what sticks.”
If you listen to what he is saying it is clear that the government will become the biggest premium payer to insurance companies through subsidies. The implications of this can lead to the government having the ability to start dictating what gets covered and what is not covered, in my opinion. The MA plan is the benchmark for the national plan and that should be of some concern to us all. Why? The cost of insurance did not come down with a mandate to everyone to be insured and competition never increased, there are 4 carriers in MA. Currently, according to the MA treasurer, 52% of all spending in MA is going directly to this insurance program or Medicaid, again showing that costs were not controlled. Of course, the MA bill was all about coverage and not about reducing costs, Mr. Gruber admits that.
If we look at the MA program there are problems with it, like most people have to go to community hospitals and those hospitals are only getting 60-70% of the reimbursement rate and 7 MA community hospitals are currently suing the state because they are going bankrupt. In order for everyone to get covered and for rates to not go through the roof insurers will have to pay doctors less, Mr. Gruber dances around that topic in his speech saying “surgeons used to be middle class people, but now they live in the Hamptons with investment bankers.” I have said that doctors do charge too much, $150 for a 2 minute office visit is nuts, but if private insurers have to adopt Medicare rates we will have less doctors, that is a fact.
Mr. Gruber is an economist, not a health care professional or insurance executive, which goes back to my point that no insurance person was ever involved in this process, but economists and lawyers are? I am sorry, but I do not like this approach because people often get left out of the equation in economists and lawyers models. He pointed towards the fact that doctors over test, which may be true, and that things like genetic testing is “too expensive.” He brings up some great points and says we will never have socialized or Canadian style health care in the US, I disagree with that as this bill will subsidize premiums up to, I think $80K in income.
This bill will do some great things, do not kid yourself, like the preexisting condition repeal and you cannot be dropped from coverage if you get sick, but those items could have been taken care of in straight up or down votes a year ago January. Regardless, Americans are furious over the process of what is happening and not being listened to. I want a straight up and down vote on the issue and I want to know for a fact that my Congressman read the bill, any Congress person saying this bill controls costs is not being truthful as the author tells you they are not sure this will control costs.
Mr. Gruber admits that when MA hit its financial trouble in 2008 they had to cut the program in MA. What does that mean on the Federal level where this thing is a trillion dollars? He says that by spending $950B to cover people now will save $30T over the next decade, I think he misspoke big time there as that is impossible. I also do not believe that the taxes collected over the next 4 years will not be spent, we are broke after all borrowing $200B a month remember, and the program will start in the red right off the bat in 2014. I also do not believe that the new taxes will only be on the top 5% of US taxpayers, like the AMT (alternative minimum tax) it started out on high net worth individuals and now it hits people below the $100K mark, unless Congress passes the AMT fix every year. Just like the AMT these new taxes will creep down because wealthy individuals got wealthy because they know how to avoid taxes.
CBO estimates, I hate CBO estimates, why? If you give the CBO the numbers you want to run you will get the results you want, it is that simple. They make little assumption on how these numbers will change over time, like people buying less income securities or dividend paying stocks so taxes drop or wealthy people decide to make $199,000 instead of $200K a year. They assume today’s numbers will stretch from here into infinity which is a joke. Look at Medicare projections back in the 1960’s, or the 1980’s or the 1990’s, you have to project the worst case scenario, not the best, and I can assure you that if they did that the numbers would be ugly. Basically, feed the CBO the data you want to get and bingo! Deficit reduction.
Mr. Gruber also wants to get rid of the tax break on health care premiums, the Cadillac Tax as it is called. Basically it is getting rid of the tax subsidy, or tax deduction, on plans that cost over $23K a year. This is not going to raise the money they think as most of the people with Cadillac plans are unions or a small portion of executive, a very small portion. There is no way that this tax deduction will stay at this level and plans that cost less than $23K will, eventually, lose their tax break as well, especially as the Cadillac Tax kicks in and those plans are dropped. Most of you have health insurance because, A) Your employer wants to remain competitive in the workplace; and B) Because they get a tax deduction for providing that benefit, why do you think they pay so much of the premium? You get rid of that and people will be left on their own, so it may be a good thing for employers, time will tell.
Oh, for all those who think we have the 37th worst health care in the world, think again. Over 240K people come to America to get some form of treatment and only 12,000 Americans leave for treatment abroad. Mr. Gruber explains that it is social economics is the problem, essentially, and, in his example, a black baby in Washington DC has the same chance of reaching their first birthday as a baby in Jamaica, that is horrible. However, what he says is what I have been saying, this is because we have an access problem.
He also states that we are like the Roman Empire if we do not get health care under control. The issue is that health care is one leg of the three legged problem. The other two legs are Social Security and our national debt. This bill currently only might fix health care, but based on MA it probably will not and based on what we know about our elected officials the other 2 legs are not going anywhere. However, as Mr. Gruber pointed out earlier in his speech, this bill really might not control costs at all. This bill also does not control prescription drug costs, at all, and Mr. Gruber says we must pay more so the rest of the world can pay less, unreal.
There was a better way of getting to a middle ground and trust me I want a middle ground. I just do not believe that this bill is legal, the Federal government cannot force you to buy anything, in my opinion, and I do believe that deem and pass should be banned, look what happens and I have heard enough of “well, they did it too,” two wrongs do make a right. I highly recommend watching this 1 hour 23 minute video to cut through the rhetoric. However, listen to what he says and what he kind of says. Listen to it without your own bias as you will hear some things that might not sit well with you. Sometimes what a person does not say means more than what they would actually say.
Oh, no illegal immigrants will get coverage, just an FYI.
Those are words you will never hear in Washington because, from what I gather, they have no idea how a calculator actually works. I just started reviewing this new bill, you know, the one so popular that the phone lines to Congress were jammed all week long, and it does not add up. I shouldn’t say that it does not add up, I should say that the assumptions are ridiculous.
They decided the best way to go was to raise the Medicare tax “only” on individuals making over $200,000 a year and couples making over $250,000 a year. The income tax increase is .9% for the Medicare tax, this will be in addition to the other coming tax hikes coming at the end of this year, and there is now an unearned income Medicare tax. So, if you make a lot of money and have dividends or interest you will have to pay an additional 3.8% tax on those investments, so much for investors buying dividends stocks.
Here is the problem, the Democrats claim this tax hike will raise $210B paying for roughly 20% of this bill. Are these people for real? Why would investors hold income producing investments if they will lose 3.8% on the interest earned? They will not because they will buy a variable annuity or growth stocks that pay nothing in dividends. That blows that $210B figure right out of the water, but the Medicare income tax hike is hard to get around. Unless you can control how much you are getting paid you will have to pay that tax, but it will surely have repercussions.
For the first time ever we have an administration who is going to impose one of the largest tax increases on Americans during a recession. I take that back, this did happen twice before, the 1930’s and the 1970’s and both decades were terrible. I can hear many of you now, it is only on the rich! Well, I got news for you first, there has never been one estimate from Congress on taxation, revenue generated and cost that has ever been right. Second, there is no way that only people making over $299K a year can pay for this program, it is impossible. That $200K number will trickle down to, my guess at least, to the sweet spot of $150K for individuals and $175K for couples which is a lot of people I might add.
Insanity does not begin to describe what is happening right now. I mean, sure the President signed an $18b jobs bill today and is about to urge the passing of a trillion dollar spending bill, do you see something wrong with that? It is a bit disproportionate and, frankly, right now the country needs jobs. At this point I just hope we have a real up or down vote on this bill so we know where our Congressional member stands and we do not go through with this sneaky backdoor deemed to pass vote.
I cannot wait to read the full bill, but, unfortunately, I will not have time until well after it is passed. I do know that ultimately this is bad news for all of the country because it was not put together properly. All the people wanted was for Congress to start over and do this the right way, no one is in the “do nothing camp.” Unfortunately, that is not to be and we are on the verge of expanding upon already existing failed programs. Essentially, it is like taking Medicare, which is almost broke, and giving it to everyone, good idea! Actually, that is Alan Greyson’s idea right now, Medicare for all is what he says, but, as most lawyers are, he is illiterate to just how ugly the balance sheet of the government or Medicare really is. Good luck!
I have been on the phone trying to get through to my Congressman, Dan Maffei (D), all day long to voice my opposition to what is going on in Washington. His phone was busy and I finally got his voice mail which was full, but I wanted to give him a piece of my mind so I kept calling until I got through. I left him a scathing message with less than polite language so if you do not hear from me send care packages to GITMO c/o Ray. I really do not care what side of the issue you are on, but I hope you are voicing your opinion to your representative. I am opposed to the current bill and want them to start over. I am not in the camp of “there is nothing wrong here,” but this thing has gotten way out of hand.
Many of you know my position on this bill, it is bad news for the country, and even more shockingly is the fact that Congress went back into hiding to hammer out the details again. This whole thing is like watching a plane crash and you have 2 choices, get in front of it so it ends quickly or stay where you are and risk catching fire, both choices are bad. What is worse is the fact that they may not actually vote on the bill itself, but use a procedure that “deems it approved” which is crazy. Again we are hearing, well the Republicans did it hundreds of times, I am sure that is true, but on something this big? I think not.
The people deserve to know how their representatives are voting on this bill, either for or against, so the voter can voice their opinion at the polls in November, either for or against. To me this whole thing is just amazing and unreal as we just wrapped up the worst 8 years in American history, well, that I have been alive for at least, and now just as we thought we got rid of a tone deaf administration another tone deaf administration has taken its place. What makes this dangerous is the fact that Obama is an ego maniac, in my opinion, and refuses to admit that he is going against the peoples will, so much for change.
As many of you know, I have also been in the insurance industry for many years, I know how this stuff works. I am well connected in the research area and do a ton of consulting, which is why I am not posting as often now. I often get calls from Senators or Congress members seeking opinions on various topics, they know who I am. Now, here we are in the midst of one of the most important legislative changes ever to hit the insurance industry and guess how many calls I have received? None. Not only have I not received any calls, but neither have any of my other geeky friends who work in this industry. Now, how can this be? How can this bill be vetted by people in the industry when, myself not necessarily included, some of the brightest people I know of in the insurance industry never got one call from even the lowliest intern from Congress?
It makes no sense and it should make you concerned because lawyers are great at lawyer stuff, but they are not good at figuring out insurance issues. Most probably do not even know what the mortality tables look like or what tables we are even using now. They have no idea on how to balance risk or spread it around and I got news for you, there is no way you can insure everyone, pre-existing conditions or otherwise, without raising premiums through the roof. Especially if you eliminate annual or lifetime caps, it is just not possible because you need to pool the risk. To make matters worse, if we continue with the archaic state system that we have now it will be a complete disaster as there is no way to spread geographical risk. It makes my head hurt just thinking about what they are doing.
We need to do something, I agree with that, but this is insane and I guarantee you it is not what you think. Premiums will go higher now until 2014 and then, who knows what will happen because we have not seen the bill yet, however I am sure it is not good news for you. I am extremely sensitive to this topic as it impacts me more than it does the average person, but it is not possible to insure everyone and maintain good quality care. This is where I get into the argument I hear a lot from the left, they claim the U.N. says we are 37th in terms of the quality of health care. First, the U.N. holds little weight with me as they seem to not really like us. Second, how can we add another 31M people to the system and expect to improve the quality of health care? It is not possible.
If what I think happens actually happens, many doctors will leave, the New England Journal of Medicine says one third of doctors will leave the business if this thing passes. Again, how would this increase the quality of care? With Dennis Kucinich all of a sudden signing on to this thing it makes me wonder what really happened when he was on Air Force One. Dennis is a public option fan and he was dead set against this bill, which is the Senate bill, but again, who really knows. Did Obama promise that the public option was on the way in the future? I suspect it is at some point and if it is doctors will leave the business. Medicare pays $26 an office visit, do you think doctors can stay in business at $26 a pop? Not a chance.
Maybe we could do it better than a Canada or a UK, but at the end of the day, I am not a fan of the government involved in my life. I do not want the government to know what drugs I am on, prescription I mean, or what health issues I might have. We also know that Medicare is a favorite for politicians to cut funding from, they tend to do it a lot, so when it becomes so large, on top of our debt, what do you think they will do to save money? They will cut health care, it is that simple. History shows what our elected officials will do and it is always in their best interests, never yours. I do not want even a stepping stone to a single payer system. However, I want some things down and you cannot tell me that you could not win an up or down vote on outlawing a preexisting condition clause on insurance contracts.
The last thing we need is more secrecy in Washington, but that is what we are getting. We have lazy politicians who do not want to start over because it is too hard, they do work for us you now, but that is what needs to be done. I highly recommend you call your representative and let them know where you stand and that you will remember their vote in November. However, I encourage you to say no to this bill, mostly because they keep changing it (!) and tell them to start over.
As I conduct my regular daily readings of various blogs and news sites I cannot help to get a very uneasy feeling brewing out there. The negativity is running very high in the political realm and from those who report on economic events. I keep seeing tag lines like; “expect more social unrest” when people report on things like the Berkley protests, which are disturbingly violent I might add. When I hit my favorite Libertarian blogs the feeling is more uneasy as I keep seeing words like revolution being used.
When you add in the Washington factor where our elected leaders are going to hammer unpopular legislation through, with no compromise, it makes me even more uneasy. There is no doubt that we need to make painful decisions in order to get our fiscal house in order, but that usually means less spending, not more. Unfortunately, our current political leaders do not see it that way and are hammering through more spending, in particular the health care reform bill. Look, I know we need to do something, but not this. Deducting money from Medicare and then adding it back in to other areas is not rational, this bill is not paid for and will make costs rise not fall.
Regardless, people are not happy about unpopular legislation being thrown down their thoughts. The kicker is that people like Nancy Pelosi come out and say that programs like Social Security and Medicare were unpopular when they were enacted. I guess what she means is that politicians know what is best for Americans and we should keep our mouths shut. We all know how right politicians are their track record speaks for itself just look at the stellar decisions they made over the last 10 years. Iraq was a great decision, the prescription drug coverage was fantastic (albeit unpaid for), the PATRIOT Act was a winner, free speech zones were fantastic, how many stimulus bills did we have again – they worked out well, eliminating a paper trail for voting is a sure disaster waiting to happen, and need I go on?
Politicians do not know what is good for Americans, they know what is good for them and getting reelected. Well, they did used to know how to get elected until now. If they pass this next unpopular batch of legislative nightmare on the docket they are in for a rude awakening come November because the people are coming for them. My only hope is that people come for them at the polls and not in any other way. Based on what I have read combined with the recent plane crash in Texas into the IRS building I think we might see more people going out to make a statement. Meaning, some nut job will more than likely blow something up or worse.
Who knows what will happen in the future, but we know that the average person feels left out right now. Wall Street got their massive bonuses and, for them, nothing really changed with the exception of having to play defense in the media. At the end of the day, the average person knows they got nothing over the past 2 years except for a higher future tax bill and, maybe, they got to keep their job, but we know about 20% of Americans were not so lucky as they are either unemployed or underemployed. Wall Street though, they are fine. Washington, well, they are doing OK as well as campaign contributions, from Wall Street, are still coming in and many have received raises. Clearly, there is a double standard and John Edwards was completely right when he said there are 2 Americas.
Discontent is here and that discontent could become a powder keg if not rectified. The unfortunate thing is I do not see how the public can be pacified, especially as this thing we are in deepens as we are now seeing. Things could get ugly and politicians need to figure out that they are representing the people and start acting that way. It is beyond me how they cannot see that Americans view them as being on the wrong path, but, again, that is politics and they will be surprised if they get voted out in November.
There is good news and bad news to this mess. The good news is it is almost over and the bad news is that is it is almost over. No matter what side of the fence you are on the one thing I can assure you of is that it is going to pass tomorrow morning. Even though I can also assure you that it is a budget buster, see the Republican CBO inquiry today for proof, and you should all know by now that the CBO is garbage in, garbage out group. What I mean is that if you feed it the sequence of data you want results for you are certain to get the desired results you want.
The real unbiased results were from the actuary that submitted his results a couple weeks ago, sorry, but actuaries know insurance and are key to determining costs, risks and results. His report shows that the costs for premiums will go sky high, I guarantee that to be the case as well, I know a thing or two about insurance as well. Basically, we have lawyers writing a bill that is math intensive and that is a major mistake, for proof look at Medicare deficits, Social Security, National Flood Insurance or any other government run program. For those who think this bill will reduce health insurance premiums ask yourself this one question, how can it is they did not take out the federal anti-trust exemption for insurance companies?
Seriously, without taking out that one exemption it is next to impossible to lower insurance premiums because it restricts citizens from buying policies across state lines. That means that insurers who have a lock on some states will still have a lock on those states, give me a break. Not only that, but now these same insurers must add millions of sick people to the roles and cannot charge them higher premiums, specifically, so that means all of our premiums will go up. This bill is the greatest gift to the insurance industry ever created. The only government gift to the private industry that was better, and it was not even close, was the no bid contracts to Halliburton under Bush. If this thing passes, buy insurance companies because for the first time in history the Federal government will mandate that citizens will be forced to buy a product from private companies to the tune of a trillion dollars over the next 10 years, give or take a few billion.
Because premiums will go sky high and our brilliant elected officials are incapable of doing simple math the subsidized premiums we will have to pay will blow those sweet deficit reducing estimates right out of the water within 3 to 4 years. If the administration and Congress decided to work with the industry, people like me who are truly impartial, they could have built a real reform bill, but since they think they know everything they have just put the final nail in the coffin of the US, from a fiscal point of view. Medicare will be insolvent or eliminated much faster than currently projected and the budget deficits will be through the roof by 2016 as the new taxes make people rethink how much money they want to earn. Oh, I am also assuming that we are actually in a recovery I might add, but if we are not in a real recovery, which the housing numbers today shows that without government help we are still in trouble, then the trouble comes much earlier.
What is that you say, AARP and the AMA support this bill so it must be OK? Let me tell you something about those organizations, in my opinion, they would sell their grand kids for an extra dollar and I am not kidding. AARP had a Medicare Advantage plan that they endorsed pulled from the market because it was so bad. They endorsed the product, it got pulled from the market and I can assure you that Medicare Advantage contract was a lot shorter than 2,100 pages long so it is highly unlikely they even know what is in the health care reform bill, but they know they can profit from it somehow. They hate variable annuity contracts, but love immediate annuity contracts because they have a GA contract with NY Life. Basically, if they can profit from it they will endorse it, period.
The AMA, who knows what they see in it except that they probably think they will get a permanent Doc Fix Bill passed or they like the idea of mandatory private insurance much better than a public option. Let’s face it, $26 per office visit from Medicare must stink versus the $50 or $90 per visit from private insurance. If you combine that an additional 30M new patients, or 40M depending who you listen to or where you get your uninsured number from, that equals some major money for the AMA and its members.
Clearly, this whole bill revolves around money for everyone. Everyone who loves it is getting paid big time to endorse it or vote for it. However, you, the person who pays for everything, is not in favor of this bill according to every poll conducted. I wonder why you are not in favor of it? Maybe because you know your Congress person is receiving tons of money from special interest groups to push things through, check opensecrets.org to see, or that Bernie Sanders, a socialist, sold out for $10B, way to be a socialist, Ben Nelson sold out for less, and of course we have the Louisiana Purchase take II. However, you have to pay your taxes plus the health insurance premiums and Congress wonders why you don’t want this thing, incredible.
What I find interesting is that New York, who is on the verge of bankruptcy, should have held out against this thing. Where was Schumer and Gillibrand on this? Why didn’t they say no way on this bill and get out Medicaid paid for? It work for Ben Nelson and Bernie I am sure it would have worked for NY. Oh yeah, Chuck was busy making the media rounds and calling flight attendants “bitch” instead of doing is fiduciary responsibility to his home state. I dislike the Republicans, I mean abortion that is the best defense against this thing you can come up with, however I agree with them that this bill is the train wreck of the century. Why is China moving towards capitalism, but the US appears to be moving towards socialism?
Clearly socialism did not and does not work, but here we are. For those who want the socialist lifestyle I urge you to seek out the countries that live under those types of regimes. I admit the US has problems, nothing is perfect, but here is the thing most countries want what we have, not the other way around. We could fix health care the right way if we took our time and did things in the open, as Obama promised he would do, but that never happened. Instead we decided to use a sledge hammer to itch our nose and it is not going to end well. Unfortunately it will take 4 years for me to be proven correct.
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