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What Obama Did Not Say

By       Message Tom Hagan     Permalink
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Great speech. The best job of putting lipstick on a pig I have ever seen.

A few things Obama didn't say:

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1. Banning denials for 'pre-existing conditions', eliminating arbitrary policy cancellation ('rescission'), limiting treatment denials and making insurance portable will all increase medical loss costs for insurance companies. Limiting these 'loss control ' activities might actually save some overhead costs, but not enough to offset increased loss costs. Policies will get yet more expensive.

2. Making health insurance portable will create an impossible situation for employers providing insurance. Each new hire can arrive with a different policy.

3. The approximately $1 trillion his reform will cost the government is almost all for subsidies to be paid directly to insurance companies, largely with money taken from Medicare. He said, of course, that this money will all come from cutting 'waste', not 'benefits', but this is not guaranteed and is in fact unlikely. Look out, Granny!

4. Increased prices paid for insurance policies by private employers and individual buyers are not counted as part of the almost $1 trillion cost of his 'healthcare reform'; that's an additional cost, magnitude unspecified.

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5. Covering more people at higher policy costs for each will raise the total national healthcare bill substantially.

6. Bankruptcy caused by unpayable medical bills will not be eliminated. Denying care will still make money for insurers so they will still do so. Tens of millions will still lack any coverage, and many more will be under-insured.

7. The number of people now bankrupted by medical expenses who "liked" their insurance before they got sick is unknown, but it is probably the same quite high percentage as those who have not yet gotten sick.

8. Obama said that insurance companies deliver a "valuable service". He didn't say what that service is or what it's worth. The only service of any value they provide is risk pooling, worth about 3-4% of actual healthcare paid for. He did not mention that government could pool risks better and cheaper, by pooling the entire population.

9. Insurance companies impose huge overhead costs, a markup of about 45% above the cost of the healthcare they actually pay for. That overhead will cost over $3 trillion in the next ten years, almost all of it a total waste. It is a major potential source of savings, left untouched by his 'healthcare reform'.

10. He said critics of the 'public option' as now proposed should realize that it will not threaten insurance companies, because only 5% of policy holders will opt for it. He did not disclose that this is by design, since only a tiny fraction of the 130 million people who want it will be allowed to choose it, specifically to keep it from threatening the healthcos. Obama said it would not be available for four years, did not point out that those four years will give healthcos plenty of time to quietly eviscerate it further.

11. He said that even the insurance companies, who have previously opposed reform, now favor his plan. He did not mention that insurance companies are now in trouble due to declining enrollment, and need life support from government. His plan gives them more customers, delivered by government mandate, massive subsidies, paid by taxpayers, and higher priced insurance, charged to policy buyers. So of course they want it. At base, life support for insurance companies is what his plan is all about.

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12. Mandates and subsidies will entail increased government regulation of the insurance industry and new government intrusion into our personal lives.

13. Many malpractice suits are filed by people confronting huge long term medical expenses. If the person being treated was not charged unpayable expenses, the filing of malpractice suits would drop dramatically.

14. After his brilliant exposition of the need for reform, Obama failed to mention that all of the urgent goals he called for could be met in full by installing single-payer Medicare For All, an efficient, uniquely American solution. Medicare would be extended to cover everyone, leaving no one uncovered. It would enhance existing Medicare coverage and increase payments to providers. At the same time, it would immediately stem the rising cost of healthcare and enable steps to rein in costs further by switching from fee-for-service medicine. It would cost less than the total we pay now for healthcare, so it would require no net new funding, saving the $1 trillion his 'healthcare reform' requires. It would virtually end medical bankruptcy, eliminate economic fear of illness, make businesses more competitive, reduce malpractice suits, and allow people to move freely from job to job or start a new business without being inhibited by health insurance worries. No one would ever have to buy health insurance again.

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A serial entrepreneur, cofounder of three high tech companies and an avid multihull sailor.

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