Do you recall
President Obama’s proclamation on September 20, 2012, when he informed us that
his signature health law, the Affordable Care Act, aka Obamacare, would reduce annual
insurance premiums by $2,500 for the typical family”? If you’d care to know how things are working
out, you should note the following recent report by the Associated Press.
The nation’s major
health insurers, citing financial losses, are requesting massive premium
increases for 2017, this to account for a variety of unanticipated circumstances.
North Carolina’s largest insurer will seek an 18.8% increase; the
requested hike in Vermont is 44%; Texas’ major health firm wants to raise its
rates by nearly 60%. And what sort of
circumstance is triggering these financial
losses? It’s that under Obamacare,
millions of health care recipients who fit into carefully contrived politically
favored classes are shielded from price hikes by government subsidies. It will be those consumers not eligible for
the government grants who must pick up the tab.
And remember, under the law most Americans are required to have health
insurance or risk being fined.
In connection with the delivery of medical
services in America, a number of things deserve to be said. Over the past couple of decades an
unmistakable trend developed, and it may well be that none of us will escape
the inevitable. The problem is
remarkably simple. While medical
technology becomes increasingly complex and costly, a substantial and growing
portion of the population, with little or no financial resources, is guaranteed
limitless access to the services. The
solution to the problem is far more complex, involving the political quandary
of requiring massive transfers of wealth among various groups of the
society. As difficult as this might
seem, there are three factors that will make it all the more unresolvable.
The first is that the retirees eligible for
Medicare number in the tens of millions and continue to grow steadily. The second is that an increasing number of
employers, many for pure survival, are ridding themselves of employees and
transferring their assets outside our borders to be beyond the reach of the
regulators and tax collectors. The
third, and perhaps most crucial of all, is that the effective tax rate on a
middle class working American is approaching 50 percent. Not only is there little slack, but the rate
is reaching historical revolt conditions.
Although The Affordable Care Act was enacted ostensibly to address these
problems, it’s clear that it cannot do so.
Instead, it’s pitting class against class . . . income group against
income group . . . American against American.
A dozen or so years ago, under a prior
administration, the country was responding in a different fashion in the search
of ways to reduce services and the attendant costs. The main vehicle for this change was the
health maintenance organization (HMO), ideally set up to ration health
care. The fact the federal government
aggressively promoted this concept for Medicare and Medicaid recipients was
understandable. Of course, this was not
happening without severe upheaval, as the HMOs were squeezed between the
medical recipients demanding ever more benefits, and the payers seeking to
reduce expenses. What developed, as a
logical response, was the capitation
arrangement by which medical providers agreed to accept a set fee per
patient per month.
The effect on the entire
medical establishment became strained as physicians, pharmacies, therapists,
and the like, saw their fees reduced to unacceptable levels. In the meanwhile, the financial position of
many HMOs deteriorated, with mergers and bankruptcies increasingly common, and
the attempt by many to shed themselves of unprofitable Medicare patients were
opposed by the government in a variety of ways.
It became obvious that the nation would eventually decline to extract
money from $9.50 per hour service station attendant Billy Rae Campo so that the
bunions from both feet of Myrtle Fellers, a ninety-four-year-old penniless
widow, could be removed at a cost of $9,700 to the Medicare system. In the meantime, however, it was business as
usual. With such expenditures, of
course, there would be corresponding economies such as Billy Rae's wife, Sue
Ann, not having her cervical cancer diagnosed in time to save her life.
There’s no point in
relating the many tales of medical malpractice; you’ve heard the horror stories
told and retold. As members of a prestigious
California HMO for fifteen years, my wife and I discovered how the system could¾in
fact, was designed to¾break
down. The only thing that need be said
is that for us things turned out satisfactorily: In 1981 we escaped with our
lives.
This brings us to the point where we must
ask: What will be the ultimate resolution of our health care crisis? I believe I see where it’s going. I’m convinced the Obamacare advocates knew
from the beginning that their program would be unworkable. The actual aim was a single-payer system
providing universal coverage to all Americans, operated by the federal
government. What we are witnessing is
the piece-by-piece dismantling of Medicare, Medicaid, private hospitals and
pharmacies, health insurance companies and all individual medical practitioners. In its stead will be a single entity,
operated and funded by Uncle Sam.
Welcome to your health care organization of the future: the U. S. Government HMO.
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If you enjoy this
weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly
Financial Newsletter, as well as my new book, The Road to Prosperity
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