Health Reform Is Law – Good Or Bad?

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There is no question that the passing of legislation to provide additional health insurance availability to millions of Americans has some good provisions and some questionable ones. Although we can’t discuss all the provisions, we can look at several main provisions.

Probably the provision favored most by both sides is the requirement that insurance companies must accept all patients with pre-existing conditions starting in 2014. The second part of this provision also provides that insurances companies can not drop coverage for patients being treated for extended care even though they reach the limits of their coverage. This certainly sounds great for those unfortunates who have serious conditions and need to have health insurance coverage. There is one problem however, how does this get paid for? You might say “the insurance companies make billions”. That’s true, but here’s how they make that money. First, they deny as many claims as possible, secondly they do not accept patients with pre-existing conditions and thirdly they drop coverage when a patient has reached their policy limits. By using these tactics, private, for profit insurance carriers, average a net profit of 2%-3%. Not exactly comparable to Wall Street or the Silicone Valley. We must assume if these organizations can no longer take advantage of these tactics, that their costs will increase significantly creating significant losses instead of 2-3% profits. The only choice they will have to compensate for these higher costs, will be to raise rates on all policies, simply said the 85% of Americans who have insurance today will see hefty increases to their current policies. And because insurance premiums will not be regulated until 2014, we should see some very large increases very soon. Keep in mind, one of the goals of reform was to lower insurance costs to all Americans so they could afford coverage. It appears savings aren’t going to happen as we were told.

Paying for this incredibly large entitlement program is mainly achieved two ways. The Medicare/Medicaid program funding will be reduced by 500 billion dollars and taxes will be raised by 460 billion dollars, primarily from households that earn $250,000 or more per year. The Congressional Budget Office (CBO)estimates that after 10 years of M/M reductions and tax increases and by not fully implementing the reform program until 2014, the deficit will be reduced by $143 billion. This means revenue will be collected for 10 years to pay for 6 years of the program. There are a number of concerns. Currently Medicare/Medicaid are seriously in debt and have very limited coverage for seniors who paid into this program for most of their working life and are now faced with additional and significant reductions because funding will be reduced. Additionally, today nearly 50% of the people do not pay any tax while 10% of the people pay 70% of the tax collected. Those 10% are now going to pay a greater share of the revenue due to tax increases provided by this legislation. Penalizing the successful people of this country is becoming out of control. Lastly, if the CBO estimates a $143 billion dollar surplus after 10 years of collecting revenues with only 6 years of implementation, they also are projecting $1.3 trillion surplus after 20 years of funding and 16 years of the program. These numbers make little sense, are considered broad estimates and are based upon many hypothetical factors. The main concern is, are we burying our economy in tremendous debt during a time when we need to reduce spending to strengthen the economy? The last point you might consider when evaluating the CBO’s estimates is that in 1965, at the inception of Medicaid, the CBO estimated it would cost $3 billion and would grow to $12 billion in 25 years. In fact by 1990, 25 years later, it had grown to $120 billion. The CBO was off by $108 billion or about 900%. Need I say more?

The bill is designed to cover an additional 32 million Americans who currently do not have coverage, about 10% of the population. 15 million of the 32 million favor having coverage, the remaining 17 million had elected to remain uninsured, preferring to be self insured, not paying insurance premiums in hopes of not needing health care. These people will now be required to purchase insurance or face a fine of $695 per year, a much less expensive option. This requirement is being challenged as being unconstitutional. At no time in the history of this country were citizens ever required to purchase products or services from private organizations or face government penalty fines.

In short, many Americans facing high rising insurance costs or those without coverage, certainly are in favor of reform that will provide them help should they become ill. However the majority of Americans were opposed to the legislation that passed, for several reasons. Firstly, it does nothing to reduce the rising costs of health care which is the primary problem for high insurance rates. It reduces funding to Medicare thereby reducing coverage and reimbursements for the elderly. It increases Medicaid costs to the states by enlarging the Medicaid program which is funded 65% by the states. It does not regulate insurance premiums until 2014, giving insurance companies the green light to raise rates out of sight for the next four years. It takes 10 years of revenue collecting to pay for 6 years of the program.

But probably the biggest problem the American public has is that in spite of a majority of Americans who were opposed to the legislation, the Congress knowingly passed the legislation regardless of what the people favored. Or, legislation without representation. Unforgivable in America.

About the Author:
Charles Patti is President/CEO of NCD Medical Corp. and National Consulting and Development Corp. Charles is based in northeast Ohio and has been in business since 1987. His diverse background includes sales, engineering, and business management. He has strong experience in Diagnostic Imaging Systems, Document Management Systems, Main Frame Computer Systems, and Combustion Control Systems.
Charles J Patti, President/CEO
NCD Medical
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