5 freedoms you'd lose in health care reform

If you read the fine print in the Congressional plans, you'll find that a lot of cherished aspects of the current system would disappear.
By Shawn Tully, editor at large
July 24, 2009: 10:17 AM ET
NEW YORK (Fortune) -- In promoting his health-care agenda, President Obama has repeatedly reassured Americans that they can keep their existing health plans -- and that the benefits and access they prize will be enhanced through reform.
A close reading of the two main bills, one backed by Democrats in the House and the other issued by Sen. Edward Kennedy's Health committee, contradict the President's assurances. To be sure, it isn't easy to comb through their 2,000 pages of tortured legal language. But page by page, the bills reveal a web of restrictions, fines, and mandates that would radically change your health-care coverage.
If you prize choosing your own cardiologist or urologist under your company's Preferred Provider Organization plan (PPO), if your employer rewards your non-smoking, healthy lifestyle with reduced premiums, if you love the bargain Health Savings Account (HSA) that insures you just for the essentials, or if you simply take comfort in the freedom to spend your own money for a policy that covers the newest drugs and diagnostic tests -- you may be shocked to learn that you could lose all of those good things under the rules proposed in the two bills that herald a health-care revolution.
In short, the Obama platform would mandate extremely full, expensive, and highly subsidized coverage -- including a lot of benefits people would never pay for with their own money -- but deliver it through a highly restrictive, HMO-style plan that will determine what care and tests you can and can't have. It's a revolution, all right, but in the wrong direction.
Let's explore the five freedoms that Americans would lose under Obamacare:
1. Freedom to choose what's in your plan
The bills in both houses require that Americans purchase insurance through "qualified" plans offered by health-care "exchanges" that would be set up in each state. The rub is that the plans can't really compete based on what they offer. The reason: The federal government will impose a minimum list of benefits that each plan is required to offer.
Today, many states require these "standard benefits packages" -- and they're a major cause for the rise in health-care costs. Every group, from chiropractors to alcohol-abuse counselors, do lobbying to get included. Connecticut, for example, requires reimbursement for hair transplants, hearing aids, and in vitro fertilization.
The Senate bill would require coverage for prescription drugs, mental-health benefits, and substance-abuse services. It also requires policies to insure "children" until the age of 26. That's just the starting list. The bills would allow the Department of Health and Human Services to add to the list of required benefits, based on recommendations from a committee of experts. Americans, therefore, wouldn't even know what's in their plans and what they're required to pay for, directly or indirectly, until after the bills become law.
2. Freedom to be rewarded for healthy living, or pay your real costs
As with the previous example, the Obama plan enshrines into federal law one of the worst features of state legislation: community rating. Eleven states, ranging from New York to Oregon, have some form of community rating. In its purest form, community rating requires that all patients pay the same rates for their level of coverage regardless of their age or medical condition.
Americans with pre-existing conditions need subsidies under any plan, but community rating is a dubious way to bring fairness to health care. The reason is twofold: First, it forces young people, who typically have lower incomes than older workers, to pay far more than their actual cost, and gives older workers, who can afford to pay more, a big discount. The state laws gouging the young are a major reason so many of them have joined the ranks of uninsured.
Under the Senate plan, insurers would be barred from charging any more than twice as much for one patient vs. any other patient with the same coverage. So if a 20-year-old who costs just $800 a year to insure is forced to pay $2,500, a 62-year-old who costs $7,500 would pay no more than $5,000.
Second, the bills would ban insurers from charging differing premiums based on the health of their customers. Again, that's understandable for folks with diabetes or cancer. But the bills would bar rewarding people who pursue a healthy lifestyle of exercise or a cholesterol-conscious diet. That's hardly a formula for lower costs. It's as if car insurers had to charge the same rates to safe drivers as to chronic speeders with a history of accidents.
3. Freedom to choose high-deductible coverage
The bills threaten to eliminate the one part of the market truly driven by consumers spending their own money. That's what makes a market, and health care needs more of it, not less.
Hundreds of companies now offer Health Savings Accounts to about 5 million employees. Those workers deposit tax-free money in the accounts and get a matching contribution from their employer. They can use the funds to buy a high-deductible plan -- say for major medical costs over $12,000. Preventive care is reimbursed, but patients pay all other routine doctor visits and tests with their own money from the HSA account. As a result, HSA users are far more cost-conscious than customers who are reimbursed for the majority of their care.
The bills seriously endanger the trend toward consumer-driven care in general. By requiring minimum packages, they would prevent patients from choosing stripped-down plans that cover only major medical expenses. "The government could set extremely low deductibles that would eliminate HSAs," says John Goodman of the National Center for Policy Analysis, a free-market research group. "And they could do it after the bills are passed."
4. Freedom to keep your existing plan
This is the freedom that the President keeps emphasizing. Yet the bills appear to say otherwise. It's worth diving into the weeds -- the territory where most pundits and politicians don't seem to have ventured.
The legislation divides the insured into two main groups, and those two groups are treated differently with respect to their current plans. The first are employees covered by the Employee Retirement Security Act of 1974. ERISA regulates companies that are self-insured, meaning they pay claims out of their cash flow, and don't have real insurance. Those are the GEs (GE, Fortune 500) and Time Warners (TWX, Fortune 500) and most other big companies.
The House bill states that employees covered by ERISA plans are "grandfathered." Under ERISA, the plans can do pretty much what they want -- they're exempt from standard packages and community rating and can reward employees for healthy lifestyles even in restrictive states.
But read on.
The bill gives ERISA employers a five-year grace period when they can keep offering plans free from the restrictions of the "qualified" policies offered on the exchanges. But after five years, they would have to offer only approved plans, with the myriad rules we've already discussed. So for Americans in large corporations, "keeping your own plan" has a strict deadline. In five years, like it or not, you'll get dumped into the exchange. As we'll see, it could happen a lot earlier.
The outlook is worse for the second group. It encompasses employees who aren't under ERISA but get actual insurance either on their own or through small businesses. After the legislation passes, all insurers that offer a wide range of plans to these employees will be forced to offer only "qualified" plans to new customers, via the exchanges.
The employees who got their coverage before the law goes into effect can keep their plans, but once again, there's a catch. If the plan changes in any way -- by altering co-pays, deductibles, or even switching coverage for this or that drug -- the employee must drop out and shop through the exchange. Since these plans generally change their policies every year, it's likely that millions of employees will lose their plans in 12 months.
5. Freedom to choose your doctors
The Senate bill requires that Americans buying through the exchanges -- and as we've seen, that will soon be most Americans -- must get their care through something called "medical home." Medical home is similar to an HMO. You're assigned a primary care doctor, and the doctor controls your access to specialists. The primary care physicians will decide which services, like MRIs and other diagnostic scans, are best for you, and will decide when you really need to see a cardiologists or orthopedists.
Under the proposals, the gatekeepers would theoretically guide patients to tests and treatments that have proved most cost-effective. The danger is that doctors will be financially rewarded for denying care, as were HMO physicians more than a decade ago. It was consumer outrage over despotic gatekeepers that made the HMOs so unpopular, and killed what was billed as the solution to America's health-care cost explosion.
The bills do not specifically rule out fee-for-service plans as options to be offered through the exchanges. But remember, those plans -- if they exist -- would be barred from charging sick or elderly patients more than young and healthy ones. So patients would be inclined to game the system, staying in the HMO while they're healthy and switching to fee-for-service when they become seriously ill. "That would kill fee-for-service in a hurry," says Goodman.
In reality, the flexible, employer-based plans that now dominate the landscape, and that Americans so cherish, could disappear far faster than the 5 year "grace period" that's barely being discussed.
Companies would have the option of paying an 8% payroll tax into a fund that pays for coverage for Americans who aren't covered by their employers. It won't happen right away -- large companies must wait a couple of years before they opt out. But it will happen, since it's likely that the tax will rise a lot more slowly than corporate health-care costs, especially since they'll be lobbying Washington to keep the tax under control in the righteous name of job creation.
The best solution is to move to a let-freedom-ring regime of high deductibles, no community rating, no standard benefits, and cross-state shopping for bargains (another market-based reform that's strictly taboo in the bills). I'll propose my own solution in another piece soon on Fortune.com. For now, we suffer with a flawed health-care system, but we still have our Five Freedoms. Call them the Five Endangered Freedoms.

Cicero 2012 !

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." --Cicero , 55 BC

That was then, This is now !

Newsweek Editor, Evan Thomas, February 2007:

"Well, our job is to bash the President, that's what we do"



Newsweek Editor, Evan Thomas, July 2009:

"We're understanding what Obama is. He is the great teacher. He is the guy that stands above everybody."

"I mean, in a way, Obama's standing above the country, above the world, he's sort
of.....God"

This says it all !! God Help us !

Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’

One of my greatest fears...

Here it is! The moment I've been waiting for. With National Health Care on the brink of existence, we now learn of the philosophy of Obama's Science Czar: John Holdren.

(My emphasis in black, comments in red).

Obama's science czar suggested compulsory abortion, sterilization
By: David Freddoso
Commentary Staff Writer, Washington Examiner
07/14/09 4:55 PM EDT

Internet reports are now circulating that Obama's Director of the Office of Science and Technology Policy, John Holdren, penned a 1977 book that approved of and recommended compulsory sterilization and even abortion in some cases, as part of a government population control regime. (Are we sure this isn't really Peter Singer in disguise?)

Given the general unreliability of Internet quotations, I wanted to go straight to this now-rare text and make sure the reports were both accurate and kept Holdren's writings in context. Generally speaking, they are, and they do.

The Holdren book, titled Ecoscience and co-authored with Malthus enthusiasts Paul and Anne Ehrlich, weighs in at more than 1,000 pages. Of greatest importance to its discussion of how to limit the human population is its disregard for any ethical considerations. (no kidding? Are we surprised?)

Holdren (with the Ehrlichs) notes the existence of “moral objections to some proposals...especially to any kind of compulsion.” But his approach is completely amoral. He implies that compulsory population control is less preferable, because of some people's objections, (Uh, yeah! As sure as the day is long) but he argues repeatedly that it is sometimes necessary, and necessity trumps all ethical objections. (Obama Philosophy 101)

He writes:

Several coercive proposals deserve discussion, mainly because some countries may ultimately have to resort to them unless current trends in birth rates are rapidly reversed by other means. (of course this is old and today we are at birth rates below the replacement level...but why should that stop them?? Now they can use the "save the planet" argument to have fewer carbon breathers walking around.) Some involuntary measures (scariest 2 words ever) could be less repressive or discriminatory, in fact, than some of the socioeconomic measures suggested.

Holdren refers approvingly, for example, to Indira Gandhi's government for its then-recent attempt at a compulsory sterilization program:

India in the mid-1970s not only entertained the idea of compulsory sterilization, but moved toward implementing it...This decision was greeted with dismay abroad, (shocking) but Indira Gandhi's government felt it had little other choice. There is too little time left to experiment further with educational programs and hope that social change will generate a spontaneous fertility decline, and most of the Indian population is too poor for direct economic pressures (especially penalties) to be effective.

When necessary, then, compulsory sterilization is justified. This attitude suffuses the following passage, in which the possibility of putting a “sterilant” into a population's drinking water is seriously discussed. Holdren and his co-authors do not recommend this particular method, but their objections to it are merely practical and health-related, not moral or stemming from any concern for human freedom: (much like our leaders today...*sigh* Great!)

Adding a sterilant to drinking water or staple foods is a suggestion that seems to horrify people more than most proposals for involuntary fertility control. Indeed, this would pose some very difficult political, legal, and social questions, to say nothing of the technical problems. No such sterilant exists today, nor does one appear to be under development. To be acceptable, such a substance would have to meet some rather stiff requirements: it must be uniformly effective, despite widely varying doses received by individuals, and despite varying degrees of fertility and sensitivity among individuals; it must be free of dangerous or unpleasant side effects; and it must have no effect on members of the opposite sex, children, old people, pets, or livestock...Again, there is no sign of such an agent on the horizon. And the risk of serious, unforeseen side effects would, in our opinion, militate against the use of any such agent, even though this plan has the advantage of avoiding the need for socioeconomic pressures that might tend to discriminate against particular groups (30 years later this is no longer tickling anyone's conscience...embryonic stem cell research and other immoral scientific experiments exploit the poor every day, for example, harvesting eggs for money). or penalize children. (Again...commonly set aside as a consideration...i.e. killing children, same-sex adoption, performing abortions on minor illegally and/or sending them back to their rapists, etc.)

Even though they do not recommend it, note that Holdren and his co-authors treat this as a serious policy proposal with serious drawbacks -- not as an insane idea unworthy of consideration. (What are the odds he's had a conversion of heart??)

They look with more favor on this “milder” form of coercive sterilization: (Doesn't that phrase just make your scalp itch?)

Of course, a government might require only implantation of the contraceptive capsule, leaving its removal to the individual's discretion but requiring reimplantation after childbirth. (Via national health care? He must be dancing in his boots right about now!) Since having a child would require positive action (removal of the capsule), many more births would be prevented than in the reverse situation.

Holdren and his co-authors also tackle the problem of illegitimacy, recognizing that it could be one consequence of a society which, in its effort to limit births, downgrades the value of intact nuclear families and encourages lifelong bachelorhood: (Duh!)

[R]esponsible parenthood ought to be encouraged and illegitimate childbearing could be strongly discouraged. (Obviously on the surface that sounds great...but this is the Anti-Humanae Vitae form of Responsible Parenthood...read on) One way to carry out this disapproval might be to insist that all illegitimate babies be put up for adoption (how generous) -- especially those born to minors, who generally are not capable of caring properly for a child alone...It would even be possible to require pregnant single women to marry or have abortions, perhaps as an alternative to placement for adoption, depending on the society. (Again, via national health care?)

Holdren's suggestion here is presented perfectly in context. It stands alone in the text without any accompanying reservations.

President Obama has spoken repeatedly in favor of putting science before ideology. The real debate, however, has never been about whether ethics are needed in science, but rather over whose ethics should determine where science will or will not go. (God help us all)

Nowhere has Obama suggested that science should be completely ethics-free. But Holdren is his Science Czar all the same.

Conservatives VS Liberals

A conservative and a liberal were walking down the street when they came to a homeless person. The conservative gave the homeless person his business card and told him to come to his business for a job. He then took $20 out of his pocket and gave it to the homeless person.

The liberal was very impressed, and when they came to another homeless person, he decided to help. He walked over to the homeless person and gave him directions to the welfare office. He then reached into the conservative's pocket and got out $20. He kept $15 for administrative fees and gave the homeless person $5.

Now you know the difference between conservatives and liberals.

More Wit and Wisdom

The difference between death and taxes is, death doesn't get worse every time Congress meets.
Will Rogers

Government can't tax things like businesses or corporations, it can only tax people. When it says it's going to "make business pay", it is really saying it is going to make businesses help collect taxes.
Ronald Reagan

We don't have a trillion dollar debt because we haven't taxed enough; we have a trillion dollar debt because we spend too much.
Ronald Reagan

Tea'd Off

Couldn't miss the little Tea Party in our town. Got lot's of laughs for my sign:

Like PB & J

(This week from the Reagan Library)