The Dust Hasn't Settled But...

I did watch Obama's speech on health care reform. He is, as everyone knows, an eloquent speaker. He talked a little smack in between his lofty pronouncements, which I thought was a good idea. But what he is proposing isn't health care reform. It's health insurance expansion. I happen to think that it's a good idea for all to have health insurance, but Obama greatly oversold what this effort will do for Americans and greatly undersold its cost.

Obama rhetorically made the assertion that he would be the last president to tackle health care reform. I sure hope not. Because what is being created is far from what is needed: quality health care for all at a reasonable price. The dust has far from settled on what Congress will pass, but it does look certain they will pass something and it will have these elements:

Heath insurance for almost all citizens
No caps on insurance
A flat insurance rate regardless of medical history

To pay for this expansion of the number of people in the pool and changes in insurance policy, Obama says he will make Medicare more efficient. No one really believes this will happen. Instead we will run additional deficits of tens of billions of dollars a year unless we increase taxes to pay for this new program.

There is little or nothing in the proposed bills to truly control medical costs. Expect medical bills and insurance rates to continue to climb at a rapid clip.

Now I have to ask what's in this for me? I look at my own family's health insurance policy. I'm in the healthiest tier of my insurance pool. I pay a ridiculous amount of money for my insurance (which is very basic with a high deductible), 8K a year. People who aren't as healthy as me who have non-company sponsored insurance pay much more.

The new plans promoted by Obama will lump all of us currently paying insurance individually into one pool and include a mix of the young and the infirmed. Since I'm currently in the low risk pool, I full expect my already astronomical rates to go up. How can it not be so? I'm getting a more comprehensive insurance policy and I'm going to be included with a lot of sick people.

Now Obama is making the claim that by increasing competition between health insurers, I'll be able to save money. That makes some sense. Currently I have no choice at all. I'm stuck with one insurance company. They set the rates. I can't go anywhere else. But how much can I save even if there is competition? It's not as if California Blue Shield is making double the profit it would in a competitive marketplace. At best, I can expect a 20 percent reduction in fees from increased competition, something that will partly but not completely make up for my insurance rate increases.

When the dust eventually settles, I anticipate that my insurance costs will be high and continue to rise at a rate of 8-12 percent a year. I'll be essentially where I am now, with a little bit better coverage. Our government will be in the hole to the tune of about 80 billion a year. That's not a good deal for me personally although it's good that 40 million people will no longer be using emergency rooms for their primacy medicine.

I anticipate that my future deal with health care - a little better insurance policy, higher premiums and rapidly increasing costs - will be the future deal for most Americans. We should be able to do more than this. If we can't, both Congress and Obama are being irresponsible.

Obama has said that he is confident that not only will a bill pass this year, but it will be a good bill. I agree with his first prediction. But as for his second prediction, this bill looks like junk. In fact it looks a lot like Bush's drug benefits program for Medicare that was passed a few years ago. It's expensive. It's a bonanza for the health care industry. Like Bush's drug benefits program, it's the product of a well meaning, but poor decision-making president and a craven and corrupt Congress. I guess the more things "change," the more they stay the same.

My view is that after the Democrats manage to heave this bill over the goal line, they'll declare victory and avoid health care reform for another ten years at least. What they and the president should do is say now we have to get back on the field and do what we should have done from the beginning: try to figure out how to keep costs down.

Keeping costs under control will involve rationing care. It will involve changing from a fee for service model for care into one that is results oriented. It will involve taxing health care benefits to motivate employees to avoid expensive health insurance options. It will involve tort reform. Whether health care is private or public, costs cannot be controlled without fundamentally changing the nature of how health care operates. No wonder neither the president or Congress want to touch real health care reform.

P.S. It's September 16th and I just read the Baucus proposal published today. It's even worse than I imagined. It's a blank check to the health insurance industry. And personally, it would cost me a ton of money in terms of premiums. This isn't "reform." Democrat or Republican, the lobbyists control Congress. If Obama wanted health care reform, he should have written the bill himself.