The Good, The Bad, And The Ugly....Of Health Care Reform

Now that the Senate version of the health care reform bill has been passed and signed into law, you can expect that the Democrats will spend from now until the Fall elections hyping all of its good points. Also, don't ever expect them to say "health care reform" again. Instead, they are now using "health insurance reform" in an attempt to win support for the bill as a reform of all those bad insurance companies that people hate so much.

Expect the Dems to hit the campaign trail hard by saying that 32 million uninsured will now get insurance because of them. They will tell you that if you or any of your children have a pre-existing condition, you can't be refused insurance; and, the cost must be the same as the other insured. They will also hype the fact that this law will remove lifetime caps on the amount of money that insurance companies will pay out for illnesses. Also, if you get sick, an insurance company can't drop you. They will tell you that your children, if they elect to go on to college, can be covered as part of your insurance policy until they reach age 26. Small businesses will get a 36% tax credit for providing health insurance to its employees (albeit a small benefit in comparison to the actual cost of the insurance). We will all be protected by a Patient's Bill of Rights. That any and all preventative care (ie. semi-annual and annual doctor visits and test) must be for free. That families making less than $88,000 will receive tax credits to help pay for their insurance. That the drug prescription donut hole in medicare coverage has been closed. Lastly, expect many of those campaigning Democrats to actually say that American families will see a $2500 reduction in their health insurance bills; even though this is a flat out lie that even Obama keeps repeating.

Certainly, all those things (if true) are the good. But, all of those things will come with a very high price; and, it is all the costs and expected reduced care that are the bad and the ugly that comes along with the package.

It all starts by adding those 32 million uninsured to the health care system.

First, most of those 32 million will be low income family members and will be added to the existing Medicaid system. The cost for insurance under Medicaid is shared equally by the states and the federal government. With a mandated fixed cost of $6,000 per Medicaid insured, this means that the state governments will have an unfunded mandate to pay close to $100 billion dollars a year for those new Medicaid patients. Many states are already in the red financially and this will just make things worse. For example, near-bankrupt California, with 12% of the country's population and assuming that they will have a representative share of the new Medicaid patients, will have an additional $12 billion in expenses per year thrown at them because of the new health care law. Eventually, that $100 billion in new expenses will show up on our doorsteps as some kind of new state income or sales tax.

I also believe that 32 million uninsured to be a stale number. 8 million people have lost their jobs and their insurance over the last 3 years. Even if some of them did find work, it was more than likely the kind of work that is likely to not have employer-based health insurance; such as temporary employment. Further, Obama and the Democrats next big project appears to give legal status to illegal aliens. If that is done some 7 to 8 million, low income aliens will be eligible for Medicaid assistance. I think if you add it all up, you are probably looking at 45 to 50 million people being added to Medicaid at a cost to the states upwards of $150 billion dollars a year.

The 32 million now or possibly 50 million new Medicaid patients later are going to put a further strain on an already strained medical system. While it is true that our emergency rooms will be freed up as a result of converting these people to an insured status, the family practitioners will now become swamped for a variety of reasons. First, the number of family doctors has been falling for years. So, now, the dwindling pool of primary care physicians will be charged with as much as 20% more patients than they have now; and, that simply means longer lines for care with less time spent with a doctor. Also, when those people were uninsured, they only went to the emergency rooms when they were seriously ill. We know from statistics that once people have insurance they see doctors more frequently for even minor injuries or illness. Additionally, ObamaCare mandates that there be preventative care which means those 32 million plus will get free semi-annual office visits and blood tests. That alone will add a tremendous burden on the primary care system in this country. But, worse than that, that mandate will also include the entire 300 million people of America; many of which, today, don't even see a doctor unless they are very ill.

Then there's the underpayment of costs by Medicare and Medicaid. Health care givers only get about 75 cents on every dollar from Medicare and Medicaid for the services they provide. That shortfall is then passed on to all the other non-Medicaid and non-Medicare patients receiving care and that means we will all pay more in higher insurance premiums; not lower premiums as this President keeps hyping. Additionally, it is the intent of this new reform law to reduce Medicare costs by more than $50 billion a year. Once again, this will force higher costs on the privately insured of this country.

Also, several mandates of this legislation will automatically force higher insurance rates. The inclusion of highly expensive pre-existing conditions will force all insurance premiums up. The so-called "free" preventative care" isn't going to be free. The care givers and health insurance companies aren't going to "pro bono" this kind of care. Instead, other services will have to be padded to cover the cost. Again, it means insurance rates will go up.

Additionally, the Secretary of Heath and Human Services (HHS) is charged with determining what level of insurance can be offered. Don't expect HHS to be judicious in what they mandate. Expect their definition of what basic insurance is to be higher than what, probably, 50% of us have in our existing insurance policies. As a result, you can expect that most of us will see our premiums go up in order to meet the new norms being established by HHS.

As I have noted before, expect the corporate cost to provide health care insurance to go up substantially. When that happens, that will reduce the amount of income taxes that the state and federal governments will receive. In just the last week several corporations have already noted how much ObamaCare is going to cost them; with AT&T leading the pack at a price tag of a billion dollars a year in new expenses. In many cases, corporations will probably raise prices to cover their costs. That, then, means that we all will pay in the form of higher costs.

Lastly, the fines being levied under this legislation are going to be an incentive not to have insurance. Why would anyone buy an $8,000 a year insurance policies if in fact they can pay the fine at a 1/3 of those costs and, then, when they do get sick just immediately sign up for insurance. After all, under this new law, no insurance company can refuse you for any pre-existing conditions. Expect people to game this weakness in the law by going in and out of insurance as necessary and sticking insurance companies with all the costs and little or no revenues in terms of consistent monthly premiums. This, again, will force insurance companies to jack up the rates on the rest of us who have policies and pay for them on a consistent basis.

In conclusion, and in light of all of the above, I believe that ultimately costs will go up and quality of service will go down. In fact, I suspect the end result will be a health care system that is in complete ruin after the full effects of this law are in place by 2018. The elderly of this nation will be herded into clinical environments and they will lose any guarantee of having a dedicated primary physician because many doctors and some hospitals will refuse to treat Medicare and Medicaid patients. Expect less insured than more, as more and more people figure out that they can game the system. As with Social Security and today's Medicare/Medicaid, you will see nothing but waste, fraud, and corruption, and the supposed cost controls of health care won't ever materialize. Instead, my guess is that costs will skyrocket. This entire legislation is purposely intended to force insurance companies to keep raising premiums, lose participants, and, ultimately, force lawmakers into the only option left: A public option.In my opinion, what the Democrats will be hyping on the campaign trail could have been done much more easily and without dismantling the entire system. But, their goal was a takeover; not any improvement in the care that Americans get. Time will clearly bear this out.