Oh I have tried to ignore the political things and keep focused on the more interesting things to make "Comments on Life" about but I fear I must venture forth into the political realm. Let it be known that I am non-political, I care for neither side of the spectrum. The book, "Wingnuts: How the Lunatic Fringe is Hijacking America" is an excellent resource to begin an understanding of current political affairs. But to today's discussion, "What is wrong with The Affordable Health Care Act".
To analyze it, we must take three main perspectives.
1) The Business Owner - Two main problems of the Act in terms of the business owner.
First, the government allowed exemptions for businesses to not provide coverage. The problem is that it was meant to address places like McDonalds that hie a lot of teen-agers. Instead, every major corporation applied, and apparently got, the exemption. While I cannot be absolutely sure, I strongly suspect that this is a major reason businesses will not hire pull time employees anymore other than managers and supervisors. Besides the obvious payroll saving, having the exemption allows the business to not provide benefits. Bottom line: by obtaining the exemption, the business avoids providing health care.
Second, the government did not require health care coverage but instead set penalties (taxes, whatever you want to call then, that is not the point). In doing so, it allows the businesses to simply choose to pay the penalty tax without providing health care coverage to the employees. It will be cheaper for companies to pay the penalty than to provide health care coverage. Bottom line: by paying a small penalty tax (small compared to the cost of insurance), the business avoids providing health care.
2) The Insurance Industry - The main issue here is that insurance companies are in the business to make money, as any business is. They make money by charging based upon statistical averages and charing accordingly. this is why individual policies are always much more expensive than group insurance which spreads the liability out and is more statistically meaningful. The current Affordable Health Care Plan requires / demands that the insurance companies provide coverage of everyone even though they have pre-existing conditions. Traditionally insurance companies allow pre-existing coverage if there has been no lapse in coverage from the previous policy for more than 30 days. The liability is traded off from one company to another and in the end it works out for all the companies. BUT NOW, a person can find out they are sick with some serious (expensive) illness and get coverage. This is akin to applying for flood damage as the television station reports on hurricane force winds and flooding three blocks away. Currently insurance companies would not provide that coverage but under the current law, they would have to in terms of health care coverage.
b) The government says they cannot raise rates significantly (more on this in a moment). If you owned health care insurance company and you were faced with these demands, what would you do? How long would you expect to stay in business? The business model demanded by the current health care act is not sustainable by businesses. They will have to raise rates significantly or go out of business ( a distinct possibility).
(Side note: A complicating factor is that people tend to be less healthy as they get older and currently the Baby Boomers which are the largest block of our population are just now turning 64'ish. Demands upon the health care system are about to be the greatest they have ever been! Back to the question, would you want to own a health care insurance company under these conditions?)
3) The Individual - Many issues here. First, Cost have to be covered somewhere, if not by the insurance company, then the patient. we all laugh or groan about how much doctors and hospitals make. We have all heard the stories about the $50 aspirin but if you think like a business person instead of a patient, consider how you pay somebody to receive the shipment on the loading dock, un-package the boxes, distribute the aspirin to various locations, maintain inventory controls and monitor status. All that has to be figured into the cost of the aspirin. Plus there are the miscellaneous charges like janitorial staff and other things that have to be covered in the final bill. We have all seen this at the auto repair shop as they charge various miscellaneous charges for "rags and cleaning materials" or some such charge. Is is simply a way of tracking expenses. Consider how stores offer "Free Shipping" Its not free, its covered somewhere (likely advertising) but it is not free and is built into the cost of the product in some way.
The point I am driving to is that costs have to be covered in some manner. If insurance companies cannot raise their rates (supposedly) then those costs will have to be addressed by the patients when the insurance companies disallow certain costs as they exceed preset limits.
Second - The Act does not say insurance companies cannot raise rates. It says to the effect they cannot raise rates excessively and there is no precise definition of what that means. In other words, they can raise rates. To be realistic, they have to the minute they have to cover everybody with pre-existing conditions. Expect health care rates to rise. To paraphrase Bill Clinton, "Define excessively."
b) The costs of the sick has to be amortized over the entire group, meaning the healthy help cover the cost of the sick. That is nothing new as that is the way it is today, that is what group rates are all about. But now we will have a lot of sick coming on-board. You may ask, what about the healthy, won't those that don't have coverage now but have to come on board and even things out? Not really. The healthy tend to be the younger people in our society (not always but usually). They also tend to be those without well paying jobs or have priorities that are on other things than health and life insurance. (Hey, young people never get sick, hurt, or die right? So they think.)
Third - The Act does not necessarily provide ADEQUATE health care coverage. I have held jobs that offered health care coverage (especially seen in part-time positions) that are woefully inadequate. Having health care is one thing, having adequate health care is a completely separate issue. I know many people who have health care but with deductibles and co-pays so high that the coverage is almost worthless unless they are seriously hurt in an accident of something.
Fourth - What will be the impact on availability of quality health care if insurance companies tell hospitals and doctors they won't pay the high rates they currently cover. ( I think we can all agree rates are way too high.) Hospitals will lower coverages and eliminate units to maintain efficiency. Students in med school or even prior to that may choose to enter a different profession. If doctors and nurses cannot eventually cover the high costs of medical school, who would choose to enter that profession?
Fifth: What will low income people (most of what used to be called the middle class) do? Well, the Act does not actually require insurance coverage. It simply charges a penalty tax for not having it. The penalty is something like $450 in 2014, $950 in 2015, and $2100 in 2016. Considering that the cost of individual health care with adequate coverage and decent deductibles and copays cost in the area of $700 - $900 a month (yes a month) it will be cheaper to simply pay the penalty tax. than buy coverage. Remember that most people that don't have it lack it because they can't afford it. BTW, i sued to have a friend who had individual health care coverage and when Conseco discontinued writing individual coverage policies (see insurance companies do quite writing policies) he had to get a Blue Cross Blue Shield policy and his rates were $1500 a month! (yes a month!) Another friend in the military couldn't afford to get out as his wife as his wife has serious health issues and he couldn't afford the outside world.
Summary: So what's wrong? The Act actually does not require businesses to provide coverage. They have two ways out, the exemption and the penalty tax ( or whatever you choose to call it). It will be cheaper to not provide coverage than to provide it. They will simply continue to have part time employees instead of dedicated full time workers and will pass the costs of penalties along to the consumer. With rising demand and lower coverage on insurance, hospitals and the medical profession will have to pass along those extra costs to the patient (you and me). Also, no matter what you hear, expect insurance rates to rise, significantly. For the individual, we will should expect higher rates. Also expect those higher rates to come with significantly lower coverage via higher deductibles and higher co-pays. (Read inadequate health care coverage). There is no free lunch, even if the government requires it. People will pay penalty taxes because they don't have insurance instead of buying the things they need in this on-going recession.
Let's see, business will be paying more taxes, individuals will be paying more taxes, people will have no better coverage than before, potentially less and the government rakes in lots of money!
Solution: I have always been taught that you shouldn't identify a problem without having a solution. So here is mine. (At least a stab at it).
First do we need health care? Yes! Cost have gone through the ceiling literally and it is insane and criminal that in America, one of the world's leaders and political powers, that we have people suffering due to the lack of adequate health care. Other countries outshine us in taking care of their citizens and that is a national disgrace to our country.
The solution? Try the Nixon Health Care Plan. I know Democrats will hate it because a Republican thought it up just like the Republicans hate the current plan that Democrats thought up and it will never see the light of day due to partisan politics but it is a good start. Not familiar with it? Here is the link to the article, " Nixon's Plan for Health Reform in His Own Words".
http://www.kaiserhealthnews.org/stories/2009/september/03/nixon-proposal.aspx
Something needs to be done. The Affordable Health Care Act (Obama Care) has serious issues as discussed above. I am sure there are those wingnuts (see above reference) that say nothing should be done but I would hope that some sane and rational educated thought would prevail rather than the emotional rhetoric that is all too prevalent. What happens next is up to us as we go about electing our representatives in Congress.
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