Tag

Medical Cost

Oct 21
0

Obamacare Economics

By | Commentary

Andrea Mitchell was on Meet The Press this weekend and managed to speak a bit of truth with this quote:

“They need the healthy people to be enrolled in order for the economics of it to work”

So…take a pool of 100 healthy single 23 year old men.  If you are an actuary….what is the expected medical costs for this pool over the next 12 months? We know there won’t be any pregnancies, and there probably won’t be any cancer, arthritis, or osteoporosis. Maybe one guy will have a serious ATV accident, a few colds, and a handful of STD’s. With a moderate deductible, lets just say the expected insurable costs add up to $75k, plus $15k profit/admin cost for $90k total…or $75 per month per guy….to insure against being bankrupted should something terrible happen….like a car crash, cancer ect…

The entire premise of Obamacare is to attempt to slip…into this pool of young and healthy….the really sick. So now we take 10 guys out of our population and replace them with 10 chronically ill people, each requiring $50k per year of medical services. So now, instead of being able to insure himself against unlikely, but catastrophic events for $75 per month….our 90 young men have to pay $500 per month instead. Now…for the 10 chronically ill people…this is a really good deal. They can go it alone and pay $4200 per month….or sign up for Obamacare and pay $500…or less. But as you can see…this is a screw-job for our young males…..who are being forced by law to subsidize the sick population.

And that’s how the game works….just like social security and medicare…..the old and powerful using the legislative process to benefit themselves and screw over the young. The fear is….that only sick people will sign up for Obamacare…which is why there is a penalty…to attempt to force the young and healthy…who would otherwise look at the $500 per month payment and decide…correctly….that the insurance risk/reward simply didn’t pencil out for them and decline. However….at least in the first year, the penalties are minimal…as low as $95, and grow to$695 by 2016. So what is likely to happen…especially in year one is rather than getting a pool of 90 23 year old healthy males and 10 sick folks…you get almost all sick folks. In that case….somebody, either the insurance company, or probably the federal government ends up losing a ton of money, and in year two….rates go up accordingly.

I have a better idea….personal responsibility. First…we take down all of the medical monopolies that allow Dr. McDreamy to jack up his prices 500%. This should collapse prices down to a point where you can afford to pay cash for essentially all of your routine care. Sure….it will mean no more Lamborghinis for McDreamy, and he’ll have to get rid of 90% of the hot secretaries he keeps on the payroll, but I’m ok with that.  You will still have a catastrophic insurance policy that will cover car crashes and other random events you have little personal control over. But…50 and need a $2M heart transplant because you weigh 450 lbs….tough crap. You can sell your BMW and offer McDreamy $50k cash…take it or leave it….I suspect he’ll take it. Dying of cancer because you smoked 3 packs of cigarettes per day for the last 3 decades??….That sucks, but sorry….you can’t force society…or your insurance pool to pay for the consequences of your personal decisions.

The entire medical establishment has gotten fat and rich by offering services at outrageous prices nobody would voluntarily pay. They have managed to pull it off by working with government, big business, and the insurance industry to create and promote the screwed up system we currently have…. Obamacare just builds onto and solidifies an already screwed up system….it solves nothing and attempts to screw over the young in the process. The only thing that will work is to destroy the current system, and make people responsible for their own decisions. I’m willing to bet….as a result…they start making better decisions. I think it will work….that’s how much faith I have in mankind….

 

 

Mar 05
0

Must Read: Bitter Pill: Why Medical Bills Are Killing Us

By | Commentary
A new cover article from Time “Bitter Pill: Why Medical Bills Are Killing Us” is getting a lot of press. The author takes a step back and asks the obvious question everyone else has forgotten to ask for the last 30 years or so. Why the H#** is medical care so expensive? Why does 3 minutes with my kids Dr. cost $300? Why does an MRI on an 8 year old machine cost a few thousand bucks? The answer is…the medical industry as a whole has conspired to screw us all over…getting rich in exchange for the false promise of immortality. They use our ignorance, and their “expertise” to their advantage at every step of the way, and have fully used and abused our broken government to push through a myriad of laws that assist them in screwing us over.
I think this piece very important because it changes the direction of the conversation. For decades, insurance companies have been the bad guys…and the noble Doctors played the hero. But that’s BS. Do you think Dr Mc Dreamy wants to make $1000 for that hip replacement, or $200,000? He’s got a BMW to pay for, a couple mistresses, and a vacation home in Aspen to pay for so you know damn well what side of the fence he’s on.
And now it’s time for a personal story. A few years ago, I went to see a specialist about my hand…I had a tingling sensation in my pinky that wouldn’t go away, and Web MD convinced me that I was probably about to have a massive heart attack. It took this specialist about 1.5 minutes to correctly diagnose me with some kind of nerve irritation. Not to worry he said…He could do a surgery to fix me up…all he needed was $30k, and something about a shark with a laser on its head. Uhh…. really? For the record…for $30k, I would literally sell you my pinky, but that’s another conversation for another day.
The next step was an appointment with an electro shock therapist. For $2k, I sat in a chair while a university of phoenix grad stabbed me in my arm and hand and then shocked me. Like 20 times. The whole thing was recorded on a prehistoric looking machine that looked like it was pulled out of the hatch on Lost. Then…the real Dr. /specialist guy came in, turned up the juice on the shockinator 1.0, and gets me a few more times. Three minutes later, I’m paying my $30 copay and thinking that maybe waterboarding is torture after all.
Next up, a follow up with the specialist who sent me to get tortured tested in the first place. After a nice long wait, I get ushered into a lavish exam room. He takes a look at my hand, asks me how it feels, and promptly recommends that I get some electro shock therapy to confirm that his surgery will cure my pinky. I quickly reminded him that I just had that done and am only here to get my test results. (I am thinking I nailed it) After looking confused for a minute, he opens an envelope, flips to the back of the report, and gives me the good news…my  nerves are fine(except for that new facial twitch)…and I should just make an appointment….he’ll be happy to see me every  month indefinitely until electro shock therapy damages my nerves enough that the insurance company will pay for his surgery fees.
Three minutes later, I’m in my car thinking about what a friggin racket this guy is running. All in, I’m only out like $90 for three copay’s, but my insurance company gets billed like $500 for each visit and his buddy at the torture clinic got a few thousand for my “treatment” If he can talk me and another guy with a tingly pinky to swing by every month for a 3 minute checkup, he’s got enough to cover his BMW payment and a couple dates at Chili’s with his mistress.  Short story long…I never went back, and while still for sale, my pinky feels fine…I just needed to stop exposing it to electro shock therapy.
Back to the Time story..I recommend reading the whole thing…and it is long..if you want to understand some of the true problems with our medical system.  This topic has huge deficit implications with medicare/Medicaid outlays expected to grow exponentially over the coming decades as the Boomers all retire and get in line for their free hips, knees, and electroshock therapy….for which Dr. McDreamy would be more than happy to provide…for the right price.