Posted on 06/19/2012 6:20:43 AM PDT by Kaslin
Writing for the Washington Post, Robert Samuelson has a column on “The Folly of Obamacare.” This piece criticizes the President’s signature achievement for many good reasons, including increased uncertainty, the negative impact on job creation, rising levels of red ink, and generational unfairness.
I agree with all those complaints, but then Samuelson makes another point that rubbed me the wrong way because he’s complaining about a symptom and overlooking the underlying problem. Here’s what he wrote.
Uncontrolled health spending is the U.S. system’s main problem — and the ACA makes it worse. Spiraling health costs crowd out other government programs and squeeze wage increases by diverting compensation dollars into employer-paid insurance. Because insured people use more health services than the uninsured, the ACA (covering an estimated 30 million more) raises spending. As for the ACA’s cost-control provisions, even the government’s own actuaries don’t believe they will do much. By their latest projection, total health spending — government and private — rises from 17.9 percent of the economy (gross domestic product) in 2010 to 19.6 percent in 2021. In 1980, health care was 9 percent of GDP.
I assume all his facts are correct, but Samuelson is missing the point. The reason we have “spiraling health costs” is because of something called third-party payer. As the chart shows, nearly 90 percent of health care costs in America are financed by someone other than the consumer. And when folks get to consume with other people’s money, they have very little reason to care about costs.
In my speeches, I frequently cite myself as an example. When my kids were small and it seemed like there was an earache or sore throat every other week, I was always at the pediatrician. But I never cared about the bill because I knew my employer-provided coverage limited the out-of-pocket amount I would pay.
The same is true for the tens of millions of other Americans with health plans provided by their employers, and it’s also true for the tens of millions of Americans who use Medicare, Medicaid, or some other government program.
By the way, this is why undoing Obamacare – either legislatively or through a Supreme Court decision – doesn’t solve the problem. Third-party payer was a huge problem even before the President made the problem a bit worse with his misguided scheme.
This video explains why free-market reform is necessary to solve the problem of third-party payer.
One final point is that there are parts of our health care system where consumers still pay out-of-pocket, and you shouldn’t be surprised to learn that those are areas – such as cosmetic surgery (or even abortion) – where costs are restrained and quality keeps rising.
Repealing Obamacare and Restoring a Free Market in Healthcare
Exactly right. The key to fixing the problems with insurance are to undo the fact that either the government or employers are paying for it. We need to decouple the employer paid programs and shift so families are making the right policy purchase for their family. Right now, employers can expense insurance before taxes but an individual cannot. They pay in after tax dollars.
This same action will also address a number of systematic problems. First, the problem of pre-existing conditions is largely addressed when an individual buys their own program. They don’t lose insurance when they leave a job or get laid off. The burden shifts back to personal responsibility. Secondly, a percentage of employees keep jobs they hate to keep their insurance...this serves no one well. The employer likely gets less than adequate results, and the employee is miserable. Third, the individual will better understand the policies they purchase and make the right decisions on coverage, deductables, etc.
It addresses the problems, not the symptoms.
Actually the US public is devoting more of GDP to health care because the US public, ie the post WWII baby boomers, are aging. Why would anyone be shocked that an older populace would spend more on health care.
Wonder why the health care and hospital costs are exploding? Just go to the emergency admissions area at your local hospital...and this hemorrhaging of services and resources is NOT limited to emergency assistance.
As long as Medicare will pay for a $30,000+ knee replacement surgery for a 93 year old, as has happened in my family, there is no future for government health care except bankruptcy.
There’s no doubt that death panels are the secret key to the long term Social Security and Medicare financial plan.
The plan for shoring up Social Security and Medicare is legalizing and importing more young folks. Ponzi needs an expanding number of new conversions to pay out the old “investors” and to allow for the skim. The left’s abortion appetite fueled our shortage of young employable (taxpaying) Americans.
“Third party payer” is only half the equation. The other half is that technology has increased the amount that might be paid in any one case.
This would require convincing voters that they would be better off paying their own medical bills than having a third party payer pay them. I have seen no ability from any Republicans to convince voters of anything close to this.
It sounds too much like :”The price would go down because you wouldn’t be able to afford it” which is toxic politically. I am not disagreeing with the overall principle of the idea just questioning the practicality of getting something like this passed and working.
What is missed (I always point out) is the dependence on large negotiating insurance pools to force providers to limit their prices. Just try to get voters to give those up if they are in a big pool getting a good deal compared to others.
What Republicans need is a limited test pilot as a showcase of how something like this could work, maybe a county or state.
The youngsters and newly legals make min wage for the most part. Not even close to bringing in the kind of $$ needed.
“Spiraling health costs crowd out other government programs”
That’s funny right there!
One problem is that although there are many people (like me) who would love to have a "catastrophic coverage" policy plus some system for getting reasonably priced prescriptions, the version of that concept you would get from politicians is that those who pay their own way still end up paying for everybody else, including birth control/planned parenthood, plus a much bigger bureaucracy.
It seems that a policy like that is necessary for most given the high cancer rates in this country, few can afford out of pocket cancer treatments.
Here's one that will cause heartburn here:
I also think people should be required to buy insurance to cover the free emergency room treatments that congress forced on hospitals. If voters dont like this then the federal law mandating this freebee could always be repealed or at least modified. Right now I pay a special tax to cover the uninsured who show up in hospitals without insurance, ncluding illegals. This was also a common problem referenced to defend Obama-care and Hillary-care.
Posting a bond could be an alternative to the insurance as with some states auto-insurance. But I dont think Republicans should be the party that supports moochers.
I would like to see a savings program replace Social Security and Medicare. It would involve some portion to be saved pre-tax. Once a person had at least $10 thousand dollars in that account, they would qualify for comprehensive auto, medical, household, and other insurances.
Individuals would handle any less than $10k expenses out of pocket, and anything over that would be covered by the insurance company.
Insurance rates would be minimal and affordable.
Once savings reached the level where they could be used for a down payment on a home, you would be able to use them for that too.
It would help to get the government out of our lives (and reduce our burden on it). It would completely change the insurance industry, healthcare, and retirement system.
Do you know this was something President Bush wanted to do, but he was laughed at by the left and by some in here too
No, I wasn’t aware of that. Interesting.
To me something like this seemed the only way to get out of the mess we’re in now.
Do you remember if it had a specific title I could look for?
It seems that a policy like that is necessary for most given the high cancer rates in this country, few can afford out of pocket cancer treatments.
Seems to me that such expensive treatments should be in the "catastrophic" category covered by insurance. Very weathly individuals could self insure if necessary.
Corporations and other organizations could still set up health plans, but who gets tax credits on medical insurance and who doesn't? And what are the minimums etc? The govt. "can't afford any revenue decreases," as you know.
Yes, but politically, easier said than done.
But what happens if they opt out and lose all their money?
Yes he did , but he was basing it if I recall on the model they used in Chile and in Brownsville TX I believe. He also said those already on SS retirement can stay on SS and those 50 and up can chose for SS or go with the plan
It would have to have been him suggesting safe options wouldn’t it.
” I would like to see a savings program replace Social Security and Medicare. It would involve some portion to be saved pre-tax. Once a person had at least $10 thousand dollars in that account, they would qualify for comprehensive auto, medical, household, and other insurances.
Individuals would handle any less than $10k expenses out of pocket, and anything over that would be covered by the insurance company.
Insurance rates would be minimal and affordable.”
Makes a lot of sense.
Thanks.
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