A Health Care Two Parter …

Part I: Why do they fear a public insurance plan?

We keep hearing that a pubic option will be far too expensive, can’t possibly work because it’s run by the Government and that it will kill the private sector health insurance industry. Leaving aside that if 1 & 2 are true then 3 is a non sequitur, how might a public, i.e. government run, insurance program be different than the private one we now have.

It’s accepted by Democrats and Republicans alike that Medicare spends 30% less on overhead expenses than private insurance companies and 92% of Medicare patients rate the care as good or excellent. What’s the difference between Medicare and private insurance?

Private insurance companies spend a lot of money on advertising, mostly to steal profitable customers from each other, as they don’t really want anyone who isn’t currently insured. Medicare doesn’t. Medicare doesn’t have to return a profit, private firms do. Take United Health Group, the largest insurance company in the U.S. Their net profits were up 155% last quarter to $889 million (extrapolated to a year that’s $3.5 billion). Not bad for the middle of a recession, huh? Then there’s executive compensation to contend with. I can’t find current numbers, but in 2005 the CEO of Health Care Group got $123 million, salary only not including “un-earned” compensation. I can only assume it’ll be more this year after such an increase in profits. The head of Medicare in the same year made a little less than $150k. Risk management is also an expense. Private insurance companies maintain a small army of claims administrators whose job it is to comb through incoming medical bills looking for exceptions to coverage. Medicare is pretty cut and dried; if your doctor prescribes it and it’s not classified as experimental it’s covered. The last major expense that the private industry has that Medicare doesn’t is lobbying and that expense has gone up a LOT since Obama and the Democrats began talking about health care reform. $1.4 million a day is the current rate of spending.

These are all legitimate expenses for any company doing any sort of business in the private sector. There is nothing wrong with any of them; they aren’t illegal, immoral or even fattening as far as I know. My only question is, is this the way you want to see the money you or your employer spend to protect you from massive expenses due to illness used?

Medicare poll
United Health profits
UHC ceo pay
Lobby expenditures

 

Part II, What does your representative have for health care?

The Federal Health Insurance program is a pool of many different plans offered by the private insurance sector. Because the federal government is the largest employer in the United States the pool, which determines the risk to the insurer and is the largest factor affecting the premium rate, is correspondingly large. Exactly what any individual plan is can’t be determined as it varies from state to state and coverage to coverage. In Texas there are 28 different plans with monthly premiums ranging from $300 to $1200. The amount the insured pays also varies from a low of 35% to a high of 90% with the government picking up the rest. Coverage ranges from no deductable, no co-pay, no limit to what most of us insured through our employers currently have. They can also take advantage of Health Savings accounts like we can and pay out of pocket expensed in pre-tax dollars. Suffice it to say that because of the pool size and open competition it’s a pretty good deal.

This is very much like what Obama and the Democrats plan for everybody; one giant pool of everybody in the country and negotiate costs with any insurance company that wants to participate plus add a public insurance option. Other reform changes include: no pre-existing conditions, no single illness or lifetime caps, no rescission as long as premiums are paid, a cap on out of pocket expenses and no premium or coverage discrimination based on sex, current health, risks or location.

Federal health plan
reform changes