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REAL Reform – 7 Ideas for Health Insurance Reform

Here are 7 ideas for health insurance reform that are not part of the plans currently proposed in Congress. If you look at the Republican's counterproposals you will find some version of these in all of them. These reform ideas are based on the free-market and are aimed at putting the power and choice over health care decisions back in the consumers' hands.

1. Tort Reform – This is an often laughed at proposal made by conservatives. Liberals like to mock this idea saying that is the only plan Republicans have to offer. Regardless of who offers it up, shouldn't it be considered? According to an IBD Editorial, "The accounting firm PricewaterhouseCoopers says about 10% of the cost of medical service is attributable to medical malpractice lawsuits. Roughly 2% is caused by direct costs of the lawsuits; an additional 5% to 9% is due to expenses run up by defensive medicine." According to CRS Report for Congress, in "2006, National Health Expenditures (NHE) were $2.1 trillion". If we saved 10% that would be $210 billion in savings. We could cover a lot of uninsured people with that money.
   

   Considering the rate at which the lawyers are donating to the Democrats in Congress it is not likely that tort reform will ever be a part of this law. Consider that 2% of the health expenditures in 2006 would have been $41 billion. The lawyers typically get 1/3 of that or about $13.6 billion. According to a Washington Examiner Op-Ed:
   

   An Examiner analysis of the 15 firms on the National Law Journal's "2008 Plaintiff's Hot List" shows that for 2009, their employees have contributed $636,305 to federal politicians and PACs. Only $4,875 of that amount has gone to Republicans, meaning that the nation's top trial lawyers are giving more than 99 percent Democratic this year. The PAC for the American Association of Justice, the top trial lawyer lobbying group, has been marginally more balanced, giving Democrats a mere 96 percent of its $627,000 in contributions.
   

   Is it any wonder why the Democrats do not want to implement tort reform?
   

2. Reduce Mandates – One of the biggest reasons insurance premiums have continued to rise is the ever expanding mandates on coverage. The politicians think it is a great idea to force insurance companies to provide coverage because it is necessary or compassionate. The problem is that these mandates increase the cost of premiums. A recent report by the Council for Affordable Health Insurance stated that:
   

   While mandates make health insurance more comprehensive, they also make it more expensive because mandates require insurers to pay for care consumers previously funded out of their own pockets. We estimate that mandated benefits currently increase the cost of basic health coverage from a little less than 20% to more than 50%, depending on the state and its mandates. Mandating benefits is like saying to someone in the market for a new car, if you can't afford a Cadillac loaded with options, you have to walk. Having that Cadillac would be nice, as would having a health insurance policy that covers everything one might want. But drivers with less money can find many other affordable car options; whereas when the price of health insurance soars, few other options exist.
   

   Lobbyists contribute to a state politician's campaign and all of a sudden you're paying a higher premium for coverage you may not need or want. While politicians can go back to their constituents and claim that they have provided them with better health insurance coverage, all they've really done is increase the premiums that everyone pays. The proposals before Congress add more mandates to coverage and with the proposed "insurance exchange" all of your coverage will eventually be determined by the government. If you want a cheaper policy that does not cover doctor's visits or has higher deductibles you will not have that choice. The government will decide what coverage you will be forced to have. So with all of these new mandates, how can they claim they will reduce premiums?
   

3. Change Tax Code – Two of the selling points that the Democrats are using is that under their plan people will no longer have to fear losing coverage if they move or change jobs and if you like what you have you can keep it. These are false promises because if you change jobs you will only have coverage under the government option meaning that you cannot keep what you have, even if you like it. Changing the tax code and leveling the field for people buying individual insurance could actually accomplish both of the above points.
   

   Currently, your employer chooses the insurance plan and you have to live with it. If you're lucky and work for a larger company you may get to choose between several plans. Either way, your employer makes the decisions. If you want to change jobs, your insurance coverage disappears. If you purchase your own policy you do not get to deduct all of the cost from your taxes while your employer deducts 100% of the cost from his taxes. How is any of this fair to the employee? The current proposals do nothing to change this.
   

   The tax laws need to be changed so that individuals get the same tax breaks that employers get. The idea would be to encourage employers to stop providing insurance, pay the savings to the employees and let the employees purchase their own insurance plans. This would give choices to the employee while also allowing them to take their insurance with them if they changed jobs. No longer would an employee be stuck in job because they were chained to their health insurance. Employees would finally own their insurance policy.
   

   This would also put choice, power and responsibility into the hands of the consumer. The consumer would be able choose the insurance that best meets their needs. They can choose a comprehensive policy that covers doctor's visits or a cheaper catastrophic policy. If they chose a more expensive policy they would have to make up the difference like they do now except it would be their choice not the employer's. If they chose a cheaper policy they could put the extra money into a Health Savings Account (see below) and use tax-free money to pay for out of pocket expenses.
   

   According to this CRS Report for Congress:
   

   Within the private category, private heath[sic] insurance payments accounted for a growing share of spending (34.4% in 2006, compared with 22.2% in 1966), while consumer out-of-pocket payments accounted for a shrinking share (12.2% in 2006, compared with 39.8% in 1966).
   

   This is an indication that over the past 40 years more and more of the payments being made are coming from the insurance companies and not from the consumers. This is a disturbing trend because people are removed from the real cost of the services they are receiving. How many people know exactly what their last doctor's visit cost? They know what they're co-pay was but most have no idea what their doctor charged the insurance company. If consumers paid more of their health care costs out of their pocket they would be more aware of the actual costs and demand that costs were brought down. Consumers would be more willing to shop around if they were paying the bill. As it stands now, most people think they are getting "free" health insurance from their employer and look to the politicians to implement "reform" (i.e., more mandates) in order to get better coverage. What they do not understand is that their employer pays the insurance premiums on their behalf and reduces their wages proportionately. Putting the power in the employees' hands will give them more choices, more security and more "skin in the game".
   

4. Allow Purchasing of Insurance Across State Lines – The current laws are such that you have to purchase insurance only from providers that sell insurance within your state. If you hear of a cheaper insurance policy that is available in the state next door, you cannot purchase it. Removing the barriers of state lines would truly increase competition; more than any government option would allow. The current proposal in the House includes something called an "insurance exchange". The concept is that all insurance will eventually be purchased through this exchange. On page 17, the bill discusses the "GRACE PERIOD FOR CURRENT EMPLOYMENT BASED HEALTH PLANS" and page 19 of the bill states:
   

   Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan.
   

   In essence, this will allow individuals and companies to purchase insurance across state lines. Unfortunately, this exchange is a huge encroachment by the government into the insurance industry. The exchange will mandate more coverage meaning higher premiums and dictate the profits that insurance companies are allowed to make. When are we going to start limiting the profits of Bill Gates and Microsoft? How about the actors making over $20 million per film? This exchange will not increase competition it will only involve the government more than they need to be.
   

5. Expand Health Savings Accounts (HSA) – Health Savings Accounts are similar to 401Ks and IRAs in that tax-free money is put into a savings account. This money is then used to pay for out-of-pocket health care expenses. HSAs have the benefit of being a tax-free investment vehicle. When the individual retires the money can be withdrawn, like form an IRA, without penalty for non-health care related expenses. An HSA could be used in conjunction with a cheaper catastrophic insurance policy and would pay for the associated out-of-pocket expenses (e.g., doctor's visits, deductibles, etc.).
   
6. Vouchers for Working Poor – There is a segment of our population that is truly in need of help with accessing health care. This is the small group of people that do not have employer-provided insurance and make too much money to qualify for government programs like Medicaid but not enough to reasonably afford health insurance on their own (estimates put this group at 8-12 million people). This group should be given vouchers that would allow them to purchase their own insurance (tax credits are a similar option). These vouchers would give the worker the choice of which insurance plan works best for them. Again, the idea is to give the consumer choices. The major initiative of the proposed bills in Congress is to cover these people with a "government option". This is simply another version of Medicaid and does not give people a choice. It will be another government entitlement program full of fraud, corruption and bureaucrats paid for by the taxpayers. This is not the answer. Give people a choice and with it some dignity. Here is a great quote:
   

   Self-respect arises only out of people who play an active role in solving their own crises and who are not helpless, passive, puppet-like recipients of private or public services. To give people help, while denying them a significant part in the action, contributes nothing to the development of the individual. In the deepest sense it is not giving but taking – taking their dignity.
   

   Vouchers would help them and allow them to "play an active role in solving their own crises". Giving them the government option will do nothing for them. By the way, this quote is from one of liberals' greatest heroes Saul Alinsky in his book Rules for Radicals.
   

7. Pre-Existing Conditions – This is a tough topic because everyone wants to be compassionate and provide coverage to all people. However, encouraging people to forgo insurance and only get it once they need it is not a good answer. This would be like getting car insurance after you've had an accident. At one point the insurance companies had agreed to drop the pre-existing conditions clauses as long as everyone was required to have insurance. Another option is to set it up so that as long as you are in the insurance system (i.e., insured) you cannot be denied coverage because you are changing insurance policies for some reason. There would need to be a grace period of some kind so that people currently not able to get insurance because of pre-existing conditions would be able to get into the system.
   

All of the above reforms require government oversight of the insurance industry – similar to what is already in place at the state level. These reform ideas give choices and freedom to the consumer and limit the role of government, which should be the goal of any legislation that is considered. Obviously, Obamacare does not seek to give the consumer choices and limit government involvement because Obama and his liberal cronies are not interested in reforming health insurance to make it more affordable and expanding it to more people. They are simply interested in more government control, control we do not need or want.

Obama’s Own Words – A Little Context

By now you've probably seen the video of Obama stating that he is "a proponent of single payer health care" and we're not "going to eliminate employer coverage immediately". If not, check out the post below. Or check out this video from the GOP:

In the video Obama says "I happen to be a proponent of a single-payer universal health care system" in 2003. Then in 2007, he said "I don't think we're going to eliminate employer coverage immediately, there's going to be potentially some transition process. I can envision a decade out, or 15 years out or 20 years out where we've got a much more portable system." Now, Obama says "if you have insurance that you like then you will be able to keep it".

The distribution of videos like this prompted the White House to post a video response claiming that these clips of Obama were taken out of context or were "cherry-picked". The truth is that these quotes are taken out of context. To put them into context we need only look to one of Obama's idols, Saul Alinsky. In the introduction of his book, Rules for Radicals, Alinsky writes:

Effective organization is thwarted by the desire for instant and dramatic
change…To build a powerful organization takes time. It is tedious, but that's
the way the game is played

So now take Obama's words in the context of his community organizing mentor. We're not going to get instant and dramatic change. We're not "going to eliminate employer coverage immediately". It takes time, "a decade … or 15 years … or 20 years".

Alinsky goes on to write:

Men don't like to step abruptly out of the security of familiar experience;
they need a bridge to cross from their own experience to a new way.

And:

The fear of change is … one of our deepest fears, and a new idea must be at
the least couched in the language of past ideas; often it must be, at first,
diluted with vestiges of the past.

Alinsky puts Obama's words in context. "If you have insurance that you like then you will be able to keep it" – until your fear of change has been put to rest. Obama has also said:

I have not said that I was a single-payer supporter because, frankly, we historically have had a employer-based system in this country with private insurers, and for us to transition to a system like that I believe would be too disruptive. So what would end up happening would be, a lot of people who currently have employer-based health care would suddenly find themselves dropped, and they would have to go into an entirely new system that had not been fully set up yet. And I would be concerned about the potential destructiveness of that kind of transition.

What Obama is trying to sell you is that "bridge" to cross to a new way. He is diluting it with vestiges of the past, "we historically have had a employer-based system" so if you have employer-based insurance you can keep it. But if you change jobs, lose your job or move you're only choice will be the government option. If your employer decides it's cheaper to pay the 8% penalty than to keep your current insurance, then your only option will be the government option. This is that "transition process" Obama talked about in 2007. In order to sell you this health care atrocity, Obama will tell you that "you will be able to keep it" and hide his true intentions "in the language of past ideas".

Now the administration is saying that the public option is not a requirement but the liberal Democrats are saying that health care reform without the public option is not reform. Be assured that some form of this public option will be included in any bill. It may be hidden with language about co-ops or some other verbiage but it will be there.

Remember that words do matter. And for those that still want to believe what Obama says today versus what he has said in the past, here is what he said last week at a town hall meeting in Belgrade, Montana:

Everybody here who still has -- who has currently private insurance, you
would more than likely still be on your private insurance plan.

Is "more than likely" good enough for you?

Why We Need Health Care Reform – according to Obama

The New York Times on Saturday published an OP-ED piece titled Why We Need Health Care Reform by President Obama. In it Obama continued his assault on those evil insurance companies saying that "millions upon millions" of people "struggle every day with a system that often works better for the health-insurance companies than it does for them". What he neglects to mention is that tens of millions of people have no problem with their insurance companies and more than 80% of people are happy with their health care (see CNN poll). He then goes on to tell the horror stories of a self-employed woman who cannot get health insurance because she has hepatitis C and a man who died because his insurance provider delayed his chemotherapy treatment. Again, he leaves out the countless stories of those people who do get health insurance and have received benefits and lived to tell about it. He also leaves out the statistics on cancer survival rates in the US versus countries with a single-payer system. How about telling some of the many horror stories that we hear coming from Canada and the UK? Of source, that would not sell the "change" that Obama is trying to push through. Demonizing the insurance companies is the current scare tactic that is being employed.

Obama goes on to point out four ways that "the reform we're proposing will provide more stability and security to every American". His first point: "First, if you don't have health insurance, you will have a choice of high-quality, affordable coverage for yourself and your family — coverage that will stay with you whether you move, change your job or lose your job" is intellectually dishonest. That "affordable coverage" will be the government option (note that he does not refer to the "government option" in the entire piece). You will not have coverage if you move, change or lose your job unless you are on the government option – that's not stability or security, that's government getting involved in your health insurance. Real reform would include changing the tax code so that people had the same tax advantage as their employer when purchasing their own insurance coverage and opening up the insurance market so you could purchase insurance across state lines. This would be real stability and security but the Democrat's plans do not include any of this reform. It only includes a government option.

Obama's second and third points involve Medicare and Medicaid. He claims they will get hundreds of billions of dollars in savings from cutting waste and inefficiency. When has government ever cut waste and inefficiency? The terms waste and inefficiency go hand-in-hand with most people's thoughts of government but we're supposed to believe that more government will equate to saving money. He also gets a few shots in at those evil insurance companies by suggesting that by cutting some of the waste in Medicaid and Medicare "we'll be able to ensure that more tax dollars go directly to caring for seniors instead of enriching insurance companies" and "unwarranted subsidies to insurance companies that do nothing to improve care and everything to improve their profits". The insurance companies are not the evil ones here, the government bureaucrats wasting our tax dollars are the problem. More bureaucracy is not the answer. However, cutting the waste in Medicare and Medicaid would be a welcomed "reform" if you trust that the government is actually capable of such cuts.

Obama's last point is aimed directly at those evil insurers and holding them "accountable". He tells us about a study from 2007 where 12 million people were "discriminated against" by these evil insurance companies. He goes on to explain how their plans will require insurance companies to provide various services like routine checkups and preventive care. What Obama is missing is that this will only drive up the costs of our insurance premiums. One of the biggest reasons for our rising insurance premiums is the increasing number of mandates placed on our coverage by the government. The more the insurance companies have to cover the higher the premiums will be – it's simple.

This is reminiscent of one of the arguments used by liberals for mandating that everyone have health insurance coverage: car insurance. They argue that everyone has to have car insurance so what's so different about everyone being required to have health insurance? It's a good argument, except that not everyone has to have car insurance. Name me one ten year old that has car insurance. Driving is a privilege and in order to take part in that privilege you have to have insurance. But let's consider this example further. First, car insurance provides many options. You can pay a smaller premium by choosing higher deductibles or forgo certain coverage like collision. Health insurance does not have these options due to the coverage mandates that vary from state to state. Second, car insurance is intended to cover you when you get in an accident and have a need. It is not meant to provide coverage for "routine checkups". Can you imagine what your premiums would be if your insurance company paid for oil changes? What if people could get coverage after they had an accident? What would your premiums be then? Finally, there is a lizard that sells cheaper car insurance. For years if you lived in New Jersey you could not do business with the lizard because NJ mandated that companies sell all forms of insurance not just car (e.g. home, fire etc.). Since the lizard did not sell these other insurances they were not able to offer their cheaper insurance to NJ consumers. Eventually, the state lifted this mandate and NJ consumers are now saving money on car insurance – it's called competition. Maybe that would work for health insurance.

The president discusses all of the organizations that are "on board" with his plan. Unfortunately he is exaggerating the level of support for his policies in order to garner support. For example, he claims the AMA is on board, which they are. But the AMA only represents a small percentage of practicing physicians. Some physicians argue that "the AMA represents less than 1/3 of America's physicians and half of those are retired." That's not as much support as the statement infers. He also states that "we have an agreement from the drug companies to make prescription drugs more affordable for seniors. The AARP supports this policy, and agrees with us that reform must happen this year." Notice the careful use of words. Does the AARP support the policy of an agreement with the drug companies or Obama's overall policies on health care reform? In his New Hampshire town hall meeting Obama suggested "We have the AARP on board because they know this is a good deal for our seniors." The only problem is that AARP released a statement after the town hall that said "While the President was correct that AARP will not endorse a health care reform bill that would reduce Medicare benefits, indications that we have endorsed any of the major health care reform bills currently under consideration in Congress are inaccurate." The reality is that there are not as many people "on board" with his plans as he'd like you to believe.

In his closing paragraphs, President Obama tells us that "the cynics and the naysayers will continue to exploit fear and concerns for political gain". He then goes on to use the politics of fear by suggesting that "we will continue to see 14,000 Americans lose their health insurance every day" and maybe you should fear that you may be one of them. Most of those Americans are losing their health care because they are losing their jobs. We could stop these losses by cutting taxes on the companies that create jobs but instead we are considering a health care reform bill that will raise their taxes. Companies are scared to hire people because they do not know what the impact will be of this health care atrocity. Obama continues with the fear that "[p]remiums will continue to skyrocket" and the "deficit will continue to grow". Well, if you continue to increase the mandates for our insurance the premiums will continue to increase and the bills in Congress do just that. So, with or without this reform our insurance premiums will grow. As for the deficit, as long as the politicians continue to spend our money like there is no tomorrow, the deficit will continue to grow. When they stop spending money they do not have, our deficit will not only stop growing but will actually disappear.

The fear of the evil insurance companies had to be included because they "will continue to profit by discriminating against sick people." Of course, they won't continue to profit because that is what they are supposed to do; it must be because they "discriminate" (again, notice the wording). It's not that the insurance companies deny coverage because of policy or coverage limits. It's because they discriminate. So let's pass this health care "reform" and make those evil profiteers pay. While we're at it, let's make those evil money-making doctors pay, and the greedy drug companies and everyone else out there that tries to live the American dream and make a profit. Let's also forget that the reason we have the best health care in the world is because of the ability for innovative and motivated people to make money.

Obama ends with the thought that "[t]his is about America's future, and whether we will be able to look back years from now and say that this was the moment when we made the changes we needed, and gave our children a better life." He is right that it is about America's future and how we will look back years from now. Will we make the changes that we really need? Or will we allow more of our rights and freedoms to be taken away with the liberals' version of health insurance "reform"?

Welcome to Nineteen Eighty-Four

Does the government fear us? Or do we fear the government? When the people fear the government, tyranny has found victory. The federal government is our servant, not our master!

Thomas Jefferson

This past week Macon Phillips, the White House Director of New Media, created a blog post titled Facts Are Stubborn Things. In it Mr. Phillips warns people of the "[s]cary chain emails and videos [that] are starting to percolate on the internet". He includes a video from Linda Douglass that was made in response to a link on The Drudge Report. The link was to a video showing Obama and other Democrats in their own words talking about eliminating employer provided health insurance in favor of a single-payer system. It's a pretty basic video and Obama is quite clear about his goals. However, Ms. Douglass tries to explain Obama's position by telling us about the "misinformation" being spread. And Mr. Phillips goes on to repeat the lie that "the President has consistently said that if you like your insurance plan, your doctor, or both, you will be able to keep them". If you believe that, I have a bridge for sale (check out the truth).

What's most disturbing about this post is in the next paragraph where Mr. Phillips suggests "[i]f you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov". Is this really what we want our government focused on? Spying on your neighbor and reporting them to the White House Director of New Media? This is Obama's idea of liberty – make people live in fear of being reported to the White House. This is his idea of "fighting the smears". This is his vision when he called on us to join him in transforming America.

It's scary that the government, particularly the Executive Branch, is requesting that individuals keep track of each other and report on their neighbor's actions. It harkens back to the days of Hitler and the Nazis. It goes against everything for which this country was founded. It even goes against Obama's campaign rhetoric. Remember the speech where Obama suggested "I need you to go out and talk to your friends and talk to your neighbors. I want you to talk to them … I want you to argue with them and get in their face." Isn't that what people are doing at these town hall meetings? They are talking to their friends and neighbors, arguing with them and getting "in their face". The problem is that they are arguing against Obama; and the chosen one doesn't like it. As a matter of fact, most of the liberals do not like it.

It starts at the top with Obama saying "I don't want the folks who created the mess to do a lot of talking. I want them to get out of the way so we can clean up the mess." What he means is get out of the way so that we can push through our liberal agenda without any real discussion. Get out of the way and let government take over health care without real, open and honest debate. When it is in his favor he wants people to argue with their neighbors and "get in their face". When it is against him he wants "them to get out of the way". This is amazing hypocrisy.

Going down the chain we come to Harry Reid describing the protestors as being "nothing more than destructive efforts to interrupt a debate that we should have, and are having. They are doing this because they don't have any better ideas. They have no interest in letting the negotiators, even though few in number, negotiate. It's really simple: they're taking their cues from talk show hosts, Internet rumor-mongerers ... and insurance rackets." Really? They don't have better ideas? You obviously have not been listening to them. There are better ideas out there and they do not include a government option. Most include less government, not more.

Then you have Barbara Boxer suggesting that the protestors are too "well-dressed" and Congressman Brian Baird (D-WA) deciding to forgo town hall appearances in favor of telephone town halls. He suggested that all people wanted was to have "the chance to shout and make YouTube videos". Not that they are concerned and want to be heard. He further insulted concerned Americans voicing their opposition to this health care "reform" suggesting that "[w]hat we're seeing right now is close to Brown Shirt tactics." And finally there is Nancy Pelosi claiming that insurance companies are evil and that protestors are "carrying swastikas and symbols like that to a town meeting on healthcare."

What we're supposed to believe is that the people who are protesting this health care reform are being organized by the evil insurance industry, do not have any better ideas, are taking marching orders from "fishy" websites and talk radio, only want to shout and make You Tube videos, are like the Nazis with their swastikas and Brown Shirts and need to get out of the way. That sums up what is being heard at town hall meetings across this country according to the liberals on the left.

While the mainstream media continues to report on all of the evil right-wing extremists protesting against health care with their brown shirts and swastikas they neglect to report about the tyrannous behavior of those who support this health care atrocity. They do not report on the town hall meetings closed off to the general public but open to Blue Shirt union members (see the video). They do not report about the black conservative (Kenneth Gladney) handing out "Don't Tread on Me" flags that was beat up by Blue Shirt SEIU union thugs after calling him the N-word. Of course this should be expected considering the White House told the Democrats that "If you get hit, we will punch back twice as hard." I guess some of those SEIU thugs took that literally or maybe that is what the White House meant – Chicago politics comes to Washington.

So the White House is asking people to keep track of their neighbors and report them, they are suggesting that the Democrats should "punch back" (some literally), they are vilifying people that "get in their face" and they are trying to suppress free speech by making people who disagree with them live in fear. Is this the change that people voted for? Is this a government of the people and by the people? Does this government fear us? Has tyranny found victory? Has the federal government become our master?

Welcome to Nineteen Eighty-Four's Big Brother and Obama's vision for America.