My thoughts on what I know about Obamacare and PCIP
First off, I’m opposed to any and everything that is “big government”. To add to that, many of these bills that pass through are so large, loaded and complicated that even the experts don’t understand them. My initial feeling down in my spine is that I don’t want government to get involved with universal healthcare, at least until such a time that the corruption and greed that the insurance industry and the medical industry enjoys is repaired.
Right now you have a system that is wildly out of control. I saw an ad for a urologist three years ago in the paper. The starting salary was $375,000 per year. That tells me something right there. Medical supplies are through the roof. Just google some and you’ll see. Example: I buy a new below knee prosthesis about every three years. The cheapie costs $6000. It takes about a day to make and it has about $250 worth of parts in it. So why is it so expensive? Because it’s a medical supply. Why are medical supplies so expensive? It’s because it’s part of the medical and insurance wildly broken and corrupt system.
It starts with malpractice lawsuits. (Yes, of course layers had a part in making it this way) Judges and jurys hand out outrageous settlements in malpractice cases. Those awards must be paid for, so doctors and medical suppliers charge outrageous fees for medical services so that they can afford malpractice insurance, so that judges and jurors can continue to hand out outrageous lawsuit settlements. That’s why you see $7 dollars for an aspirin on your hospital bill. But that’s just the tip of the iceberg. You go to the doctor or the hospital and get your care and then they bill your insurance company, who of course denies the payment. Then they go back and forth with paperwork for several months saying “you owe me this” and “I’m not paying you that”. They have to hire people to generate all of this paperwork and their salaries translate to higher medical costs, but that’s just the tip of the iceberg too.
These are just some of the things that are wrong with the current healthcare system in America that need fixed BEFORE we even try to get government healthcare coverage for every American.
I got into an interesting discussion on Facebook the other day. You may have seen this picture. 
Well, everyone started either ragging on or defending Obamacare and I was no different. I was one that was ragging. But then I did a little looking into exactly what PCIP was which is what is referenced on her sign. It stands for Pre-Existing Condition Insurance Plan. So what is that? Well, it varies state by state but in Pennsylvania it means that basically, insurance companies have to insure you even if you have a pre-existing condition. You have to pay for it, but they they have to make it affordable and they have to offer it. That’s where I was wrong. I had assumed that the government was just paying for some slacker’s medical bills with my tax money. I admit. I was wrong.
Well, this I agree with! It’s just like the “high risk” car insurance for bad drivers. It’s not paid for by the government and our taxes. It’s paid for by the person who needs it. Sure, you and I pay too through higher premiums, but in the grand scheme of things, I can live with that. People have pre-existing conditions and everyone, including myself is tired of seeing the big fat insurance companies slamming the door in the faces of people in need. Perhaps someday I’ll get the chance to read more about Obamacare. I really wish they’d simplify their bill passing and stop porking every bill they pass though with thousands of pages of self interest bullshit. Bottom line, I like the thought behind PCIP but I get the feeling that this is a bright point in an otherwise dark bill.
Here’s what I don’t understand about your analysis. If I wait till I have an expensive to treat condition, then buy the insurance that covers pre-existing conditions, how can you say that I’m “paying for the insurance?”
Suppose it takes $50,000 to pay my bills. If I were paying for the coverage, I’d need to pay the insurance company more than $50K, because they have to make some money, too. I think what this lady did was to buy a policy for, say, $1500/mo., keep it until her bills were all paid, then drop the coverage. Her premium, and I think I’m no pretty solid ground here, wouldn’t cover the amount the company paid to her medical providers plus the overhead of the insurance company. If it did, she’d be smarter just to pay the bill.
Imagine we did this for hurricane insurance. You’d wait till a hurricane was bearing down on your house, then call and buy insurance. You can easily see that isn’t really insurance. Insurance is where a lot of people pool resources so that when an unanticipated event happens to a few, those affected aren’t financially ruined. But, it doesn’t work if someone can join after they know they are going to suffer a covered event. It isn’t insurance. It is just freeloading on those who pay when they don’t know they will have a covered event.
One more point. Insurance should cover only unexpected events, not routine things. Your car insurance, for example, doesn’t cover oil changes (unless the auto company uses that to entice you to buy the car, but you’ll just pay those costs in the price of the car). Similarly, health insurance shouldn’t cover routine medical expenses–you’d be better off to pay for those yourself rather than pay the expenses PLUS the overhead of the insurance company in your premium.
There’s no such thing as hurricane insurance. It is optional flood insurance. And it is a self-funded pool managed by (get ready for this, Ron) the government. All insurance companies have to offer it, but (believe me!) they do their best to discourage you from buying it. They don’t want to deal with it, especially if you get flood damage. They want to be able to say, “Well, you were flooded by Katrina, and you didn’t have flood insurance, please don’t call us again. Goodbye.”
In addition to applauding your comments on greed and corruption, I’d like to point out that we don’t have a health care system, we have sick care. Perhaps your experience is different, but there is no preventative elements to my company’s plan. Nothing to encourage wellness or health. And I’d also like to mention that America is one of the only industrial nations that has unregulated for-profit insurance companies. Most other nations have a profit cap, which helps keep costs lower. And finally, what offends me the most is that we (as a nation) spend more than any other country on healthcare, but what do we have to show for it? Countries that have 100% coverage for all their citizens spent 1/4th of what we do. Yes, yes, I know the quality of their system is different, but we’re still spending more to get less.
Anyway, good post, Unc. Enjoyed it!
Hi, Jon! Just a couple of quick responses.
First, you need encouragement to get preventative care? It is your body and your life, and you still need some company to call you up, beg you to go for care, and pay for preventative services? The mind boggles.
Which industrial nation should we emulate? Greece? Ireland? Iceland? Portugal? Just get China to agree to keep bailing us out, and I’m there.
And if we are going to compare costs against expected lifespan, I defy any industrial nation to match the bang-for-buck that North Africans get from their government healthcare. From the CIA factbook:
Country Life expectancy Healthcare expenditures
Tunisia 75 years (73/77 male/female) 6.2% GDP
Libya 77.6 years (75.3/80 m/f) 6.6% GDP
Algeria 74.5 years (72.8/76.3 m/f) 5.8% GDP
Let’s look at modern, industrial nation healthcare
Germany 80 years (77.8/82.4 m/f) 8.1% GDP
UK 80 years (77.9/82.2 m/f) 9.3% GDP
Greece 79.9 years (77.4/82.6 m/f) 7.4% GDP
Don’t forget that the economies of the second group are much larger than the first, so the per-patient expenditures are much lower in North Africa. It seems that a couple of GDP points doesn’t buy all that much in terms of life expectancy. Maybe we could just cut back to 6-7% GDP, go with universal insurance, and use all that extra money to pay off our debt!
Wait, let’s let Congress and Congressional families go first to show us just how much better the new standard in healthcare is.