President Trump is preparing to “repeal and replace” Obamacare, but this awful law should be repealed and nothing should be passed to “replace” it.
It is time for America to go totally in the other direction to really solve the health-care cost crisis with market-driven solutions to guarantee accountability.
First, it is crucial to look at what has driven health-care costs sky-high. It is primarily one thing – that payments for health services are not made by the customer (the patient) but are almost always made by a third party, by either insurance companies or government.
In other words, you, the patient, don’t usually care what the cost is when you do not pay the bill. So if the bill says that you were charged $600 for a nurse visit, then you do not challenge it or even care.
How many people do you know who go over the costs for a major surgery, like an $80,000 bill, line by line?
Answer: If insurance pays the bill, they do not look at the bill at all. These bills are impossible to understand anyway.
This leads to total corruption and we have millions of stories every year to prove it. My mother told me about the $600 nurse visit – two of them – during which the nurse took my mother’s blood pressure and did nothing else.
If my mother were paying the bill out of her own pocket that $600 never would have passed. It probably would have been $50, just like the gasoline station cannot charge you $25 per gallon and get away with it. Or the carpenter cannot charge you $1,000 for replacing your front step.
Government payments then make the problem worse since the patient neither pays the bill or even pays any insurance premiums to start with.
During the 1990s there were market reforms implemented using Health Maintenance Organizations (HMOs) and cost controls by insurance companies. It was effective and it benefited everyone, but Democrats and liberals screamed that “bean counters” at the insurance companies were denying adequate care to every single person and the experiment was curtailed.
In other words effective market-driven solutions were killed off by a chorus of emotional criticism from the left (as usual) driven by their hatred for insurance companies.
So instead things have gotten much worse – most people today get every type of care one way or another, including poor people who pay nothing, while costs have gone through the roof. The insurance companies don’t fight; they just pay the bill and pass the costs on in the form of higher premiums.
Health insurance was first offered as a benefit to employment during World War II when government wage cost controls were implemented to stave off inflation. So rather than give raises, companies offered their workers insurance, which was relatively inexpensive at the time since medical technology was relatively primitive.
Since then exotic new technologies and hundreds of expensive life-sustaining and life-lengthening practices have driven costs way up. With insurance paying the costs and nobody looking at the bill, costs have skyrocketed.
Hospitals also have faced steeply rising costs, particularly from unionized nurses and other unionized workers. In my town the nurses are constantly on strike or complaining about something.
Government came along in the 1960s with Medicare and Medicaid. Then came Medicare Part D under president George W. Bush. Then came Obamacare.
The whole system would have been much better off with people paying their own bills for most treatments, like through an HMO, and buying insurance only for catastrophic cases.
There is a new generation of Health Maintenance Organizations that is emerging all over the nation in response to the health-care cost crisis. Sean Hannity has talked on his radio show about one of them in Kansas. The HMO charges $50 a month for adults and $10 for kids. You can get as much non-catastrophic treatment as you need, while insurance is required for catastrophic costs. This catastrophic insurance is relatively cheap since most people don’t get catastrophic illnesses, i.e., most health-care costs are for non-catastrophic cases.
Now imagine that your homeowner’s insurance were like health insurance, that every light bulb that you wanted to change, or every room that you wanted to paint, needed to be run through your home insurance policy. It would make no sense.
That is largely the case with health care, and the paperwork cost alone is staggering. Almost every doctor visit is “covered” under insurance. So something simple like a cold, or stitches for a small cut, or a broken arm, needs to be run through the insurance industry bureaucracy.
This bureaucracy is ruled by endless reams of rules, which increase costs again. Obamacare alone ended up being more than 20,000 pages of nonsense – a stack of paper 7 feet tall – including the requirement that employers must give health insurance to anyone working 30 hours per week or more. American business responded by cutting millions of workers back to 29 hours a week, i.e., it harmed the very people it was supposed to help. It gets worse. The Congressional Budget Office reported in 2013:
The Federal Reserve on Wednesday released an edition of its so-called “beige book,” that said the 2010 (Obamacare) healthcare law is being cited as a reason for layoffs and a slowdown in hiring. “Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” said the March 6 beige book, which examines economic conditions across various Federal Reserve districts across the country.
Another major boondoggle in Obamacare is the “pre-existing conditions” law, which is pure utopian socialism. This means that insurance companies have to cover an existing medical condition. In other words, if you get sick and don’t have insurance, you go out and quickly buy insurance and the insurance company must pay for your care even if you only pay a few thousand dollars in premiums and then get $100,000 in care.
This is not insurance at all. This defeats the whole concept of insurance, which is what Obamacare was intended to do, to kill the whole insurance industry and turn health care over to the government. Just like Obama saying you can keep your doctor and will see $2,500 per year costs cuts for insurance, the whole Obamacare disaster has turned out horribly.
Another major driver of cost increases in medical care comes from the political left – the trial lawyers who are virtually all Democrats. These are the vile “ambulance chasers” who sue anyone and everyone. Doctors have become so terrified of being sued and ruined that they often triple up or quadruple up on tests to fend off any legal challenge, adding enormously to costs. In one survey from the Journal of the American Medical Association, 76% of doctors admitted that they had performed extra tests to cover themselves in the event of a legal challenge.
Then look at the costs involved in a medical practice including medical school loan repayments, rent, equipment, wages and benefits for employees – including ever more expensive health insurance – and skyrocketing costs for malpractice insurance because of the lawyers, which has become a major cost.
In order to get a steady flow of cash coming into their offices to cover these increasing costs, doctors often use insurance plans – which guarantee payments – as cash cows, and run more and more tests and procedures, each producing revenue. So the insurance system is abused even more.
Virtually any problem can be solved through market solutions where the customer pays the bill directly. With the horrendous failure of third-party-payment insurance plans, government payments, rules, regulations, paperwork and rationing, we certainly must start to apply common sense. In short, let’s not “replace” Obamacare. Let’s just toss it on the ash heap of history where it belongs.
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