On the eve of disaster, another health care primer. Pointing out the lies

As many know, Congress is preparing for a vote on the new healthcare act during this Christmas season, specifically tomorrow Dec 24, between 8:00AM and 12:00PM.  In an effort to persuade citizens to contact their representatives for "No" vote, I would like to point a few more myths on the current health care proposal.

Medicare denies fewer claims than private insurance

This is a fallacy often used by the left to promote a government run health care plan.  I'm sure you've all seen the ads, or stories, often projecting the woes of children, showing how the evil private insurance companies have denied health care claims.  Despite the despicable practice of using children in these ads, we find out that this is just wholly untrue.

According to the American Medical Association (AMA) 2008 National Health Insurer Report Card, Medicare denied 6.85% of all claims, higher than any private insurance company, with only AETNA coming close.  In addition, even the White House admits that ~12% of all claims are fraudulent (~$60B), where as, Fortune 500 shows that the total profit made by the top 10 private insurance companies was $8B combined!!  Read that again, Medicare losses almost 7 times as much in fraud as the top 10 insurance companies make in profit!  Begs the question, how can government run health care be more efficient?

Private insurance companies are only concerned with profit

This statement is a play on capitalist mentality.  Of course private insurance companies are concerned with profit, any company in America is else they would cease to exist.  However, is running a private insurance company really as profitable as the leftists would lead you to believe?

In a profitability report ranking the top 10 insurance companies ending Dec. 31st, 2008 shows that private insurance companies are operating on razor thin profit margins.

Blue Cross, 3.4 percent, United Health Group, 3.6 percent, Well Point, 4.1 percent, Aetna, 4.5 percent, Humana, 2.2 percent, Cigna,(loss), Health Net, 0.62 percent, Coventry Health Care, 3.2 percent, Americagroup,(loss)
Universal American, 2.0 percent, Centene, 2.5 percent

Compared to the 14%+ profit margins of other industries, such as oil, you see, Private Health Insurance (PHI) isn't the most profitable of businesses.

Medicare has lower administrative costs the PHI companies, thus making it cheaper to operate

Several "accounting" tricks help the leftist to promote this myth.  First of all, Medicare services a predominately elderly population, which translates to a significantly higher expenditures when compared to PHI companies.  So in this regard, when administrative costs are compare to "total costs", then the above is true.  However, when you take the administrative costs compared to a "per-patient" basis, you find a radically different number.  According to research by the Heritage Foundation, administrative costs per patient are 24.8% (on average)   higher with Medicare when compared to PHI.

In addition, Medicare, by virtue of being a government lenity, is not subject to many of the same administrative costs as PHI.  Administrative costs that are subject to inclusion by PHI, such as rent, marketing management, taxes, capital for equipment, etc, are included elsewhere in the federal budget and do not ride on Medicare's books.   A prime example of this is the act of premium collection.  PHI companies are responsible for their own costs of premium collection, however, Medicare doesn't count that cost on their books due to the fact that this is an action performed by the IRS.

Current health care plan will be deficit neutral

Again, this is a lie that is buried with accounting tricks.  In the current healthcare plan, if enacted, we , the taxpayer, will begin to be taxed on the new plan, but won't begin to see the benefits for 4 years.  In effect, we will begin paying for the health plan now, but our benefits won't start until 2014.  Well, of course it's deficit neutral when taxes are levied to pay for it before any expense is paid out!!!  That's akin to going to a Cadillac dealership, buying a car, making the payments on that car for 4 years, then receiving that car at the end of your payments and claiming you got the car for free!  Only in this case, we paid for a Cadillac, but got a Yugo at the end.

Lastly, the amount of tax increases and pre-tax limitation, used to fund this bill, while "making the bill budget neutral" would greatly increase the hardship on American families  earning less than $250,000 /yr.  Some of the facts according to the Congressional Budget Office (CBO), the non-partisan scorekeeper of financial legislation. 

Employer offered pre-tax  Flexible Spending accounts (FSA) will be limited $2,500/yr vs $5,000 currently.

Elimination of payments for over the counter medicine reimbursements by workers covered under FSA or HSA (health savings accounts) which is currently allowed under the tax law

Limitation of the tax deduction allowed for medical expenses.  Down from the current 10% of AGI (adjusted gross income) to 7.5% under the new bill, increasing taxes on those between $50,000 - $75,000 annually.

New excise tax on so called "high cost health insurance plans", which according to the CBO and JCT (joint committee on Taxation), would affect 90% of consumers earning less than $200,000/yr.

Overall, the CBO and JCT predict that will increase taxes on all single people making over $40,000/yr and married couples earning over $75,000/yr.

An excise tax imposed on health insurance providers and medical device makers in 2010, would be passed on to consumers, resulting in higher premiums and cost for health care products, affecting for all Americans, with the hardest hit being those earning less than $250,000/yr.

Individual insurance premiums are expected to increase by an average, an average, of 10% or more when compared to current law.  So much for "free" or "lost cost" health care huh?


I could continue to go on about some of the falsities, or just flat out lies, being spread about the current health care plan, but I must balance the length of my posts with the amount of information I submit.  I can't make the posts so long that I lose peoples interest in reading.  However, the above gives us more than enough to know what has been said all along, this plan is a bad idea!  It will cost future generations trillions, will lower the quality and availability of health care, and gives the government more concentrated power than as ever been allowed in our history.  I urge you all to write/fax/call your congressman and demand a "No" vote to this monstrosity.  If ever there was a time to become involved, now is that time!


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