The cost of health insurance premiums, not the cost of healthcare, is the next major economic crisis this country faces. As premiums increase, healthy people who can’t afford the increase drop their insurance; as healthy people drop their insurance, the medical risk is spread among a smaller group of people making claims. The more people drop their health insurance, the faster premiums go up.
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Health insurance premiums are increasing every year and every year, the premium increase is substantially larger than the previous year’s premium increase. The result is that health insurance premiums are rising much faster than inflation and faster than the cost of healthcare. Eventually, the health insurance industry has to implode.
Think health care is too expensive? So what? Why shouldn’t we have the most expensive health care? With all of the money wasted in the last few wars and in other ways, we could fund health care for every generation to come. There are many factors which cause health care to be expensive, but I will deal with those problems another time.
Some people argue that national health insurance will cost a lot of money, but this is simply not true. What will happen is that the cost will be reduced and that cost will be transferred from one pocket to another.
Health care costs will be reduced: People without health insurance get their medical treatment at the emergency room from hospitals which are required to provide medical treatment without regard to insurance coverage. This results in people going to the hospital for a simple cold or sore throat which uses up hospital resources and costs 10 times more than what it would cost to see a doctor in a private office.
The Cost of healthcare will be transferred, not increased: Hospitals must recover this cost somewhere, so they charge people with insurance more money than they would ordinarily need to. This means that people (or employers) with private health insurance are paying for medical treatment for people who do not have health insurance in the form of higher and skyrocketing health insurance premiums. With national health insurance, the cost of medical care for people without insurance will be transferred from private health insurance premiums to the government and your taxes.
The government doesn’t pay for food why should it pay for health care? One politician posited that argument, but there are distinct differences. Food is relatively inexpensive and can be afforded by even the poorest individuals in this country. People can survive on food basics such as vegetables and do not need filet mignon. Healthcare is expensive. The fact that everyone is entitled to receive health care with or without insurance causes people who cannot or do not want to afford it to go without health insurance which costs everyone a lot more money than providing national health insurance.
The cost of health care has nothing to do with the issue of whether we should have national health insurance coverage, it is the acceleration of premium increases. The biggest reason for the increase in health insurance premiums is the very principle of insurance, which is to spread the risk of a few people among a much larger group of people. Health insurance is the only insurance which you want to use. You certainly don’t want to collect on your life insurance!
When I pay my health insurance premium, I subsidize those people who are sick or injured because I never make a claim. When the cost of my health insurance premium is so high that I decide to drop my health coverage, the health insurance company loses the contribution of my money and now the risk is spread among a smaller number of people.
When I drop my health insurance coverage, I will not be the only one. Other people who don’t make claims will also decide that they can no longer afford to pay for the coverage. People who can still afford the coverage will continue to pay for their health insurance until their premium reaches a point that they too decide to cancel their health coverage. Eventually, all that is left is a smaller group of people all of whom are making claims. When that happens, there will be no difference between the cost of health insurance and paying for your own medical bills.
In approximately 1998, my health insurance premium (single/individual non-group) was approximately $225 and the next premium increase was $25/month. By May 2001, my monthly health insurance premium with Empire Blue Cross Blue Shield was $337.65 per month. By April 2008, my monthly premium with Empire Blue Cross Blue Shield was $861.99. My health insurance policy renews in April and this April 2009, my health insurance premium was increased by $215.79 per month to a total of $1,077.78 per month.
President Obama said that the cost of medical insurance will double in 10 years. However, this year, my monthly increase was almost 10 times greater than it was 10 years ago. Most alarming is that the monthly premium increase for 2009 was almost double the increase of 2008. At this rate, my monthly premium increase will bring my health insurance premium to over $1,400 per month by 2010 and nearly $1,800 per month by 2011. Don’t forget, I’m single. A friend of mine who is married saw his premium with Empire Blue Cross/Blue Shield increase to nearly $2,800 per month this year. Not too many people can afford this.
For most people, it was unaffordable at the rate I was paying a few years ago. Since I could not afford health insurance coverage in the near future, I decided to drop my health insurance policy with Empire Blue Cross/Blue Shield now and start saving my money. Of course, without my monthly contribution of $1,077.78 per month this year, Empire’s health insurance premiums will have to increase a little more for everyone else.
The question is not whether we need national health insurance, but when it will happen. More people than ever before are going without health insurance. When a medical catastrophe strikes, uninsured people can lose their homes and both hospitals and doctors will see many of their bills unpaid. When medical bills go unpaid, the losses must be made up by charging more for services.
While doctors don’t have the power to negotiate higher prices with insurance companies, hospitals do. When the insurance companies won’t negotiate with hospitals, the hospitals refuse to accept the insurance. This has now been happening at an alarming rate. Even doctors are now following the lead of hospitals and refusing to accept health insurance policies from major companies such as Empire Blue Cross/Blue Shield. When hospitals and doctors refuse to accept payment directly from the health insurer (accepting assignment), patients have to make up the difference.
Some people have argued that some medical services available with private health insurance will no longer be available with national health insurance. This is simply not true. In fact, the opposite is true. There are many stories in the news all the time about private health insurance companies which refused to pay for desperately needed medical treatment by someone who is dying. They often create delays hoping that the patient will die before the treatment will have to be paid. My father was on Medicare and never had a problem getting medical treatment. Almost every doctor takes Medicare.
Because my father did not want to pay for excluded services under Medicare part B, he signed up with HIP which provides full coverage at no charge. He has been receiving excellent medical care by some of the best doctors in New York and he has not been declined any tests or procedures which he needed. Additionally, this shows that private health insurance can easily and successfully compete with government provided Medicare.
In addition to people who will not be able to afford health insurance now or in the near future, employees who are laid off are usually unable to afford cheap group health insurance coverage which is available for 18 months under COBRA because they no longer have any income. When COBRA ends and the health insurance premium is three times higher, it certainly is not affordable. It’s no wonder that President Obama said that 14,000 Americans are losing their insurance every day.
The acceleration of health insurance premium increases will quickly come to a point which causes enough people to cancel their health insurance coverage resulting in the next financial and social catastrophe to affect this country.
As dictator I would issue a Decree providing national health insurance for every citizen and permanent resident (green card holder). Unfortunately, President Obama is only a president and can’t accomplish what a dictator can. I would afford health insurance coverage to everyone that is the same health insurance coverage currently provided to US Senators, Congress and the President. Why should U.S. citizens get anything less?
The cost for this will come from taxes. There is plenty of money to pay for everyone’s health insurance coverage by cutting a lot of the waste out of the US budget. Be sure to visit IAmDictator.com occasionally to find out where I will cut the budget so everyone can have health insurance coverage.
Al Franken discussing national healthcare with an angry mob
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Philip L. Franckel, Esq.
The Original Dictator
