On Medical coverage and socialized medical care
By special reader request:
Years ago, one paid for all health care expenses. Individuals sought medical treatment only when necessary, as they had to pay for it all. Home remedies were common for most minor illnesses or injuries.
Based on this, and with the objective of (gasp) making a profit, while offering a convenient service, the insurance industry started offering health care coverage. At first, much like life insurance, the coverage was designed to be a protection against catastrophic losses. In other words - the individual would still pay for any small treatments, but major hospitalization would be covered. This protected a household from bankruptcy in the event of a major accident or illness.
This concept was the ideal. Much like today's automobile owners must pay for small mechanical repairs, but have insurance for major collision or comprehensive losses.
Some say that since "pro" is the opposite of "con," then it implies that "congress" would be the opposite of "progress."
In 1971, Congress was forced into reactive mode. Only six years earlier the Medicare program was enacted through the same legislation that brought Social Security, placing the burden of many more health care expenses on the government. During the next six years, physician costs went up over 7%, hospital charges went up over 13%, while GDP only increased 5.3%. Costs were being artificially inflated so that physicians and hospitals could make more money off of the government.
Additionally, consumers (regular people covered by medicare / medicaid) had no financial interest, so they sought medical coverage for EVERYTHING. Hey, it was "free" after all! They could go to the doctor or hospital for every little thing that they used to cover themselves.
Congress struck back in 1971, enacting laws that placed restrictions on coverage. This prevented people from going to the doctor or hospital for every little thing.
The legislation from 1971 also placed restriction on price increases for costs of services. Now, the government dictated what a doctor or hospital could charge. The free market on health care was now dead - it just didn't know it yet.
Excellent essay on these events.
From there, Congress also loosened up laws on Managed Care Organizations (MCO's - the forerunner of modern HMO's). Previously, it had been largely illegal for a single interest to control the pricing of another business. The term we use is "price fixing." With relaxed laws on this for the medical profession, the insurance companies united, and started dictating rates to physicians and hospitals.
Nowhere else in our free society does the purchaser DICTATE the pricing for the merchant. We are a capitalist society - the market as a whole dictates prices.
But this was no longer true for health care.
Now, we have group programs that pay for not quite as much as they used to - primarily because the insurance companies have learned to limit benefits, lest the policy-holders spend the money willy-nilly. Agian, the concept of people not having a financial interest in the care allows them to seek care for unnecessary injuries and illness.
That is also why we see rising deductibles - the insurance companies put some of the financial burden back on the policy holder - making for more responsible choices by the individuals.
Pricing and costs had started to level back out, as they do in a free market. Most people had chosen to move away from HMO's, as they were inferior coverage to other plans on the market - both in cost and in benefits provided. The free market had almost overtaken all of the artificial government entrapments.
Again, enter Congress.
In 2010, the heath care reform act was passed. Again, Congress saw fit to legislate what a company could and could not cover. Pricing restrictions were put in place. Essentially, Congress stated that the government wanted to take over all health care coverage - by making it impossible for a private company to sell coverage at a (gasp) profit.
But the government has proven they cannot manage anything correctly.
Prior to the government takeover, there were two arms of government funded health care -
1) Medicare - health care for the elderly.
2) Medicaid - health care for the poor.
Medicare:
At the time, Medicare was written by actuaries to take effect when an individual reached the age of 65. At the time, the average life expectancy was 70. Therefore, a recipient was expected to draw benefits for an average of only five years.
Today, life expectancy is 87. Meaning a recipient is expected to draw benefits for an average of 22 years. This has made the program far more costly than originally intended.
Medicaid:
Medicaid, at the time, was designed for the poor. Today, people can qualify for Medicaid if they have a monthly income of less than $2000. Since this is calculated after taxes, one could qualify for Medicaid if one earns as much as $30K per year. Hardly poor.
Medicaid has expanded tremendously since 2000. There are several underlying reasons:
1) The Medicare Prescription Drug Affordability Act of 2003 expanded medications covered under Medicaid (and Medicare, too). Now, with no financial responsibility, patients can get all the Medicines they want.
This act was passed by all but one Democrat voting for it in the Congress, and a few turncoat Republicans. The Senate vote was substantially similar in makeup.
This was one of the handful of mistakes that President Bush made - by signing it into law.
2) Congress, seeing how quickly the program was expanding (along with Medicare), enacted a plan to reduce the spending. The Deficit Reduction act of 2005 was their answer. As always, it is impossible to undo the new laws and new tax burdens. The new law did slow growth - by limiting coverages (just like the insurance companies do when they want to preserve their *gasp* profits).
And the limitations on coverages have made the product (Medicaid / Medicare) worse for its consumers.
To add insult to injury, Medicaid has continued to grow.
Yes - it covers less, and still is growing out of control!
3) Medicaid is not run solely by the Federal government. Medicaid is funded predominantly by the Federal Government, but is operated (and partially funded) by the states.
This is like having the fox run the hen house!
States, in opposition to the Deficit Reduction Act, have been legislating like wildfire, to keep their Federal money flowing in. More Medicaid abuses and fraud have been the result.
We have yet to see the final result, but the fact is that we cannot afford Medicare and Medicaid any more.
We cannot afford the 2010 health care mandates.
We can afford going back to the old fashioned way of doing things.
We can afford traditionally underwritten insurance.
And I know - there will be rioting in the streets when the government no longer provides insurance.
My only questions:
1) Where in the Constitution is government funded health care even permitted?
2) When will the current government operations actually go belly-up?
3) For those that believe in the government providing all, would you please name one thing the government has run well? Or even correctly?
I've only ever seen the government run things into the ground.
A bit on health care coverage.
Years ago, one paid for all health care expenses. Individuals sought medical treatment only when necessary, as they had to pay for it all. Home remedies were common for most minor illnesses or injuries.
Based on this, and with the objective of (gasp) making a profit, while offering a convenient service, the insurance industry started offering health care coverage. At first, much like life insurance, the coverage was designed to be a protection against catastrophic losses. In other words - the individual would still pay for any small treatments, but major hospitalization would be covered. This protected a household from bankruptcy in the event of a major accident or illness.
This concept was the ideal. Much like today's automobile owners must pay for small mechanical repairs, but have insurance for major collision or comprehensive losses.
Enter Congress.
Some say that since "pro" is the opposite of "con," then it implies that "congress" would be the opposite of "progress."
In 1971, Congress was forced into reactive mode. Only six years earlier the Medicare program was enacted through the same legislation that brought Social Security, placing the burden of many more health care expenses on the government. During the next six years, physician costs went up over 7%, hospital charges went up over 13%, while GDP only increased 5.3%. Costs were being artificially inflated so that physicians and hospitals could make more money off of the government.
Additionally, consumers (regular people covered by medicare / medicaid) had no financial interest, so they sought medical coverage for EVERYTHING. Hey, it was "free" after all! They could go to the doctor or hospital for every little thing that they used to cover themselves.
Congress struck back in 1971, enacting laws that placed restrictions on coverage. This prevented people from going to the doctor or hospital for every little thing.
The legislation from 1971 also placed restriction on price increases for costs of services. Now, the government dictated what a doctor or hospital could charge. The free market on health care was now dead - it just didn't know it yet.
Excellent essay on these events.
From there, Congress also loosened up laws on Managed Care Organizations (MCO's - the forerunner of modern HMO's). Previously, it had been largely illegal for a single interest to control the pricing of another business. The term we use is "price fixing." With relaxed laws on this for the medical profession, the insurance companies united, and started dictating rates to physicians and hospitals.
Nowhere else in our free society does the purchaser DICTATE the pricing for the merchant. We are a capitalist society - the market as a whole dictates prices.
But this was no longer true for health care.
Back to the Private Sector
Now, we have group programs that pay for not quite as much as they used to - primarily because the insurance companies have learned to limit benefits, lest the policy-holders spend the money willy-nilly. Agian, the concept of people not having a financial interest in the care allows them to seek care for unnecessary injuries and illness.
That is also why we see rising deductibles - the insurance companies put some of the financial burden back on the policy holder - making for more responsible choices by the individuals.
Pricing and costs had started to level back out, as they do in a free market. Most people had chosen to move away from HMO's, as they were inferior coverage to other plans on the market - both in cost and in benefits provided. The free market had almost overtaken all of the artificial government entrapments.
Again, enter Congress.
In 2010, the heath care reform act was passed. Again, Congress saw fit to legislate what a company could and could not cover. Pricing restrictions were put in place. Essentially, Congress stated that the government wanted to take over all health care coverage - by making it impossible for a private company to sell coverage at a (gasp) profit.
But the government has proven they cannot manage anything correctly.
Government run health care 2009 and prior
Prior to the government takeover, there were two arms of government funded health care -
1) Medicare - health care for the elderly.
2) Medicaid - health care for the poor.
Medicare:
At the time, Medicare was written by actuaries to take effect when an individual reached the age of 65. At the time, the average life expectancy was 70. Therefore, a recipient was expected to draw benefits for an average of only five years.
Today, life expectancy is 87. Meaning a recipient is expected to draw benefits for an average of 22 years. This has made the program far more costly than originally intended.
Medicaid:
Medicaid, at the time, was designed for the poor. Today, people can qualify for Medicaid if they have a monthly income of less than $2000. Since this is calculated after taxes, one could qualify for Medicaid if one earns as much as $30K per year. Hardly poor.
Medicaid has expanded tremendously since 2000. There are several underlying reasons:
1) The Medicare Prescription Drug Affordability Act of 2003 expanded medications covered under Medicaid (and Medicare, too). Now, with no financial responsibility, patients can get all the Medicines they want.
This act was passed by all but one Democrat voting for it in the Congress, and a few turncoat Republicans. The Senate vote was substantially similar in makeup.
This was one of the handful of mistakes that President Bush made - by signing it into law.
2) Congress, seeing how quickly the program was expanding (along with Medicare), enacted a plan to reduce the spending. The Deficit Reduction act of 2005 was their answer. As always, it is impossible to undo the new laws and new tax burdens. The new law did slow growth - by limiting coverages (just like the insurance companies do when they want to preserve their *gasp* profits).
And the limitations on coverages have made the product (Medicaid / Medicare) worse for its consumers.
To add insult to injury, Medicaid has continued to grow.
Yes - it covers less, and still is growing out of control!
3) Medicaid is not run solely by the Federal government. Medicaid is funded predominantly by the Federal Government, but is operated (and partially funded) by the states.
This is like having the fox run the hen house!
States, in opposition to the Deficit Reduction Act, have been legislating like wildfire, to keep their Federal money flowing in. More Medicaid abuses and fraud have been the result.
Result
We have yet to see the final result, but the fact is that we cannot afford Medicare and Medicaid any more.
We cannot afford the 2010 health care mandates.
We can afford going back to the old fashioned way of doing things.
We can afford traditionally underwritten insurance.
And I know - there will be rioting in the streets when the government no longer provides insurance.
My only questions:
1) Where in the Constitution is government funded health care even permitted?
2) When will the current government operations actually go belly-up?
3) For those that believe in the government providing all, would you please name one thing the government has run well? Or even correctly?
I've only ever seen the government run things into the ground.
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