Thursday, July 23, 2009

Entitlement Cycle

Are we entering another entitlement cycle? A broad look at the last hundred years suggests that in the early part of the 20th century it was pretty much every man for himself. The period following the Second World War resulted in a more active application of the Welfare State concept especially in the western world. This model appeared to deteriorate in attractiveness and soar in costs and in the 70s and 80s and some countries – notably the US – started dismantling some of the entitlements (e.g. unemployment benefits) or moving them to the private domain. Now another 20 years later increasing entitlements – especially universal health care - appear to be back in the forefront of the national spotlight.

It would appear that we move from entitlement to self reliance and back every 20 years. The movement is not stark or abrupt but a slow chipping away of the edifice in place resulting in the slow replacement of one system with the other.

The most obvious explanation to this is that the costing for the period of entitlement is inaccurate and the state cannot bear the burden of the costs these programs require. The fact that the citizenry get taxed punitively does not help the cause either. At some point therefore the state gives in. Over time reduction in entitlements lead to a loss in the general well being of the populace because though the people have more money in their hands, it is not enough to pay for the entitlements previously provided by the state. As the chorus of anger builds up over the lack of entitlements, the state is forced to take notice, reinstate some of the benefits and the whole cycle repeats.

The crucial aspect therefore is cost. And it is heartening to hear that in the current climate of healthcare reform considerable attention is being given to how to pay for the reform. Creating a feel good solution without considering the cost may be good for one or two presidential terms but not sustainable much longer.

Wednesday, July 15, 2009

JAHP (Just Another Healthcare Post)

So what are the private insurance companies whining about? Why aren't they providing affordable healthcare for the un-insured? Because it isn't profitable to do so!

1) The private insurers don't want to provide healthcare for all
2) The private insurers don't want the government to offer a plan since they fear that the plan will siphon off its profitable consumers too.

And Americans, instead of understanding how vulnerable they are to a financial catastrophe in the event of a job loss or serious health problem do not really think through the healthcare issue but just spout meaningless garbage about big government and taxes. Yes, the government can be overbearing and a nuisance at times but remember it is by the people and for the people!

All Americans should ask themselves these questions.
1) How secure are you in your job?
2) What will you do for healthcare if you and/or your spouse lose your job/s?
3) Can you seriously afford COBRA in its unsubsidized form and for how long?
4) Can you seriously afford to pay for healthcare? Do you know how much a couple of days of hospitalization costs? Or maybe a minor surgery? Or a battery of tests?
5) What will you do if you get laid off with a pre-existing condition or two in your mid fifties?
6) much have you saved? Do you have anywhere from $200,000 to over $1 million set aside purely for healthcare? If not, can you claim that you can take care of any healthcare emergency without insurance?
7) Even if you are healthy and young now, it is a matter of time that you will develop a long term issue be it back pain, diabetes, heart disease or the like. Do you think you will get individual coverage then should you lose your job and can't find one in a reasonable time frame and are forced to take involuntary retirement?
8) Can you afford the sparse options that exist like the state pools and variations on the group coverage which will end up costing you thousands in premium?

The fact is you can downsize to a smaller home or an older car or stop shopping for luxuries. But the lack of health insurance coverage exists as a significant, clear and present danger to the well being of most Americans.

Yes taxes suck. Yes the habitual freeloaders will get health coverage from our tax dollars (they already are). Yes there might be times when government healthcare will really suck. That is why for the last point at least, it is currently being offered as an option and not the sole choice. You can say why should I pay taxes for it when I plan to stick with the private plan. The truth is you don't have a choice. It is your companies that make the choice for you and trust me, they will offer you the cheapest plan possible. Also wouldn't if be great that you have an affordable option should you lose your job?

What about the oft cited cases of nationalized healthcare where care is not immediate?
I would rather be in a situation where I am waiting for an operation without the fear that it will bankrupt my family rather than foregoing one because I can't afford it though surgery is available immediately. No situation is perfect, but Canadians and Europeans have some of the highest life expectancies around. Surely something must be right in their systems.

Yes other reforms should happen simultaneously. Doctors shouldn’t charge the way they do, they shouldn't have to pay high premiums for malpractice insurance and insurance companies shouldn't cost the way they do. But come on, do you have time to wait for all those reforms or would you rather go with the one that affects you directly?

Do you really think options like Health Savings Accounts will make that much of a difference? How much will you contribute in these? $500 a month? How much healthcare will $6000 a year get you? HSA's might be viable if there is a ceiling after which it is covered by a catastrophic coverage. Tried finding the latter coverage lately or with an existing health condition?

Do you think shopping for health insurance is an answer? Do you think there will be an enlightened insurer somewhere in this country who will look at all your frailties with a kindly eye and yet offer you a decent affordable coverage when the same has been denied by other hard nosed insurers? Well you probably believe in the tooth fairy too.

It none of these arguments convince you, you are either or extremely well off, or you are in complete denial about your vulnerability to a health crisis or you are so taken in by party propaganda that nothing will shake you.

The fact is that ultimately the health insurance companies dug this hole by denying coverage to larger and larger numbers of people and simultaneousy colluding with others to making individual payments for healthcare totally un-affordable.

A public option (not sole choice) is the only answer out of this crisis. Let the private sector compete with the goverment because after all if the private sector is indeed so efficient and well run, they shouldn't have much trouble holding their own against the government.