•10:20 AM
I attended a webinar yesterday called "Health Reform 2009: Watershed or Waterloo?" It was put on by my broker and after sitting through it, my heart was broken. As a result, I was moved to a state of heightened concern and anxiety for the welfare of my nation. I will share why.There are a few laws that simply cannot be argued with.
1. You need money to buy things
2. Money has to come from somewhere
3. There isn't an infinite amount of valuable money (See footnote 10)
Knowing how our Congress & President are in a hurry to pass major health care reform because of this new "Crisis," it seems that "reform" is inevitable. For some time now they have been selling the country this line:
1. Millions of poor & uninsured
2. Increasing costs
3. The government will give us the same health care that the President has
They use these three things as a premise to give them authority to step in and reform our system (See footnote 1). The word "reform" itself implies that the system has been in some criminal state and needs to be brought in line with higher norms and standards. I will admit that there are certainly some problems with health care - every American can. But, there are many pricing problems in America (I think the iPhone is too expensive for example. Everything Apple is too expensive for that matter) and we do not want or hope that the government will get involved. It isn't their role - they have no authority, implied or explicit, for price controls.
Here are the facts:
1. Millions of Poor & Uninsured
Of the 46 million uninsured Americans (15%) total (2007 numbers),
• 12 million eligible but not enrolled in Medicaid or SCHIP.
• 8.5 million have household incomes over $50,000.
• 9 million have household incomes over $75,000.
• 9.7 million non-citizens (including 6 million undocumented aliens).
• 8 million college-aged young adults (4.7 million are students).
(See footnote 2)
So, those that we should really be worried about are not those who are eligible but who choose not to enroll, those who make over $75,000 annually but choose not to purchase, or the undocumented aliens (I want them to have insurance but a government entitlement should be available only for legal residents within that government's jurisdiction). Those we should worry about are the 8 million poor college students and the 8.5 million with an income above $50,000 and below $75,000.
16.5 million is a lot less than 46.5 million. Half of these could be fixed by a federal mandate requiring parents to keep their children on their health insurance while in college or up to a certain age. The other half could be addressed by changing the requirements for medicaid. Woo-la. Health care is reformed.
2. Increasing Costs
Regarding rising costs, the facts are what they are. Costs are going up (See footnote 3).
3. The government Will Give us the Same Health Care That the President Has
The insurance that the government will offer Americans is not the same plan that they have. Certainly that was one of the parts of Senator Obama's message while running for president (See footnote 1). However, that was his plan. Congress will formulate their plan and that is the one that we will have to deal with. The main thrust on capital hill is not to give us the same plan as the President and Congress have but it is to create a National Health Plan - Universal coverage - a single payer system.
I know that sounds nice but it isn't. As the benefits manager within a worldwide organization, I can tell you from experience that OUR health care system is the envy of the world (and the world does include Canada & Europe). People are legitimately sad to see our country taking the direction it is with health care. They know that it will downgrade the quality of care - not improve it (See footnote 4). The fact of the matter is that it will downgrade care and create a rationing of care system. It is a fact. I will explain in a moment why.
For these downgrades, the President gave an estimate of $1.6 trillion dollars. I guess only with government will we pay more for less. If this were an accurate forecast of the expected cost, it would perhaps be the first time in government history that it were. Things always cost more - always - than what our elected officials tell us.
For example, here is the Massachusetts experience (See footnote 5):
Budgeted $460 million for 2007
Forced to budget $870 million for 2009
Medicare Projections (See footnote 5):
$3 billion/yr in 1965, est. $12 billion by 1990
Actual 1990 cost: $107 billion
Actual 2008 cost: $430 billion
The Iraq War:
Forecasted at $50 Billion, it could top $2 Trillion (See footnote 6)
Here are some more figures:
This year's Debt: $1.8 Trillion
National Debt: Officially more than $11 Trillion. That is a whopping 13% of GDP (Economists say a nation can sustain about 3%. Annually alone, ours is at 4% - see footnote 7)
Medicare: Has not balanced its budget in more than 20 years…currently has a $38 trillion
unfunded liability. Medicare has stated it will go bankrupt by 2017. Some projections are as high as $68 Trillion in unfunded liabilities. (See footnote 8)
Social Security:
- $96 billion negative cash flow by 2020
- $280 billion negative cash flow by 2025
- $500 billion negative cash flow by 2030
I am not making this stuff up either (See footnote 5 or the banner at the top of this page).
If the President's projection is twice as accurate as Medicare’s projection, and only misses the mark by a factor of 5… The $1.6 trillion becomes $8 trillion over 10 years…60% as large as our current national debt.
Where will it all come from? We go back to our rules:
1. You need money to buy things
2. Money has to come from somewhere
3. There isn't an infinite amount of valuable money (see footnote 10)
The simple truth is we are heading into a future of total financial destruction. That is the direction this road we are on is heading. There isn't some magical pot of gold at the end of this storm - because there is no rainbow.
If the President's projection is twice as accurate as Medicare’s projection, and only misses the mark by a factor of 5… The $1.6 trillion becomes $8 trillion over 10 years…60% as large as our current national debt.
Where will it all come from? We go back to our rules:
1. You need money to buy things
2. Money has to come from somewhere
3. There isn't an infinite amount of valuable money (see footnote 10)
The simple truth is we are heading into a future of total financial destruction. That is the direction this road we are on is heading. There isn't some magical pot of gold at the end of this storm - because there is no rainbow.
You can see that this plan for health care reform reveals that much more government reform is needed before we can even begin to allow the government to reform health care.
And, after Congress' mad rush to pass this "critical" legislation for all 9 million people who need it, we will be forced, just a few years from now, to make cuts & to ration care for the whole nation. Why? Because of those rules. President Obama says that health care costs are the biggest threat to the long term financial security of the nation (See footnote 9). I say that health care reform is the biggest threat the financial security of the nation. You can't have everything you want with a fixed amount of resources and the government will be in a much sadder, much worse state than it is now. Someone with no credit and no money can't buy a thing. A whole nation with no credit and almost no money won't be able to either. This doesn't take into consideration the rampant inflation forecasted as a result of our bailouts either... We can have press releases and great speeches about the nirvana of health care reform, but, simply put, the numbers don't add up. When you add trillions of negatives to trillions of negatives to even more trillions of negatives, you get tens of trillions of negatives. When we finally are brought to account for that, no clever Enron financial reporting will be able to hide the black hole we have created. That press conference will be a terrible day.
Seeing these numbers and knowing what it certainly spells out for our future makes me almost cry out, "Who is doing this to us?! Can't they see that this is only going to leave all Americans stranded down the road? Can't they see that this is going to literally destroy the country we love?!"
This is so irresponsible. This is reckless. This kind of rash and foolish fiscal policy will lead to a true crisis & oppression of the greatest kind.
This should cause anxiety in every freedom loving American. I hope my cries become your cries as well - and that together, we can keep this catastrophe from occurring.
What is the future? On our present road it is to complete financial insolvency. Is there any other future than one of ruin? Not on this road.
How I love you America! What have your caretakers done to you?
What is the future? On our present road it is to complete financial insolvency. Is there any other future than one of ruin? Not on this road.
How I love you America! What have your caretakers done to you?
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Footnotes
1. You can hear Senator Obama discussing these issues in the town hall presidential debate last year here: http://www.youtube.com/watch?v=-f2_p-fd2D4.
2. These figures can be found from the Federal Government at http://www.census.gov/prod/2008pubs/p60-235.pdf
3. You can read more of this here: http://www.nchc.org/facts/cost.shtml at the National Coalition on Health Care.
4. Besides my own personal interactions with my colleagues in Canada and Europe, here is a great clip of several interviews worth watching: http://www.youtube.com/watch?v=BbHh86HkBhk.
5. Health Reform 2009: Watershed or Waterloo? A Lockton Benefit Group Webcast
7. To see a graphically our national debt, click here: http://www.cnbc.com/id/30108264/?slide=12. To learn more about the amount of deficit we can sustain, listen to the podcast here: http://dateline.radioamerica.org/archives/1879
10. The government can certainly print up a near infinite amount of money, but there is a point beyond which the money does not have any more value. There is not an infinite supply of money with value.
4 comments:
I feel your pain Ken. Well thought out and well written post from you as usual. Anything I could add would merely be preaching to the choir. However, I will say for the benefit of any supporters of the President and/or the current majority party in Congress, that I hold them responsible for putting us in this mess. How many times do you have to have elected Representatives promise you something for nothing before you realize they are playing you for fools, especially when they don't even hide their big "D" Democrat affiliation? Personally, I think the "D" is for Deception. It is clear that the true aim of these Washington elites is to enslave the population, to engineer society in a way that requires citizens to be dependent on them remaining in power. Equality can only be had at the cost of the producers in society being dragged down to the level of non-producers, a true recipe for disaster. So thanks again to those who put us in this position. Your own selfishness and greed has shown itself to have no bounds. You heard "FREE" benefits from the government and even though you know full well nothing is indeed "FREE" and that the truth is that some other person or group will have to pay, you jumped in with both feet. This only works so long and then you have nothing to "spread around" but poverty and pain. I'm ranting now.. time to sign off.
I don't have anything to add of great significance. It isn't just the Democrats, though. Progressive, big-government policy and vision have been in place for decades through several changes of party leadership in congress and presidency. I think Ronald Reagan took a decent stand against communism, but that was just putting some braking power on what was already speeding toward destruction. Thomas Jefferson warned that it was immoral for one generation to leave ANY debt to the next, yet these governments from one generation to the next don't bat an eye at piling more money on. It is despicable. You bet I will be writing my representatives, but I have little hope that they will demand a stop to this. I think they are past feeling. I think we as a country are inevitably going to suffer economically and the wicked will likely go unpunished. As always, hope for the best and prepare for the worst, right? I hope more people will pray for help and get more engaged on a civic level.
You know I value your opinion and you bring up some very good and alarming points with the way things are heading, but I'm not entirely sold on it.
The US has been built on a tradition of being critical. We see something we don't like, we say something. We get the opinion from any side in order to find a better solution. The problem that I see with a lot of these economic problems is that no one is offering any alternative. Including the health care systems. This is obviously a field where know more about it. I recognize that, being so connected with the pharmaceutical aspect, so I do value your opinion and your arguments.
The biggest flaw I see with the logic of this post is that it is a false dilemma fallacy. It basically assumes the current situation is fine and the government messing with things is going to screw it all up. That just leaving it alone is fair, just, and right and government intervention will only destroy the monetary and health care systems. Both assumptions I think are false.
The reason why health care reform is an issue is because it really is an issue. Anyone who thinks otherwise hasn't read the details of their hospital bills and insurance statement/policies.
Last Winter I had a kidney stone. We went to emergency room in which I was given morphine and a test scan was done to make sure if there weren't more. The 2 or 3 hour ordeal ended up costing more than $3,000. For a drip of morphine, a bed for an hour, and a test. If we wouldn't have had insurance it would have blown a major hole in our savings. If we hadn't had insurance to be honest I don't think I would have even gone to the ER. I know lots of people that consciously deny going to a doctor when they need to, because they are afraid of costs. Like I said before, heaven forbid a larger accident occurs. Your instantly into debt well into 6 figures. You're entire life's savings and aspirations could be gone in a single event.
So to cover up the cost system we have the equally bogus system of insurance. It's designed to spread out the risk. Ever been in a car accident? you know how well that works. People wait years and years before they get any of their bills paid because of insurance companies. It's a system designed to hide the big bills from us while they slowly but surely take more and more money out of every check.
Your conclusion is that Government will ruin the whole system and the whole thing crashes. Lets take worse case scenario. What would that be? Nationalize health care. Government takes complete control over health care. Everyone can go to the doctor for $10 a visit. Not exactly the cataclysmic end that we're all taught to be scared of.
I'm not a fan of the whole thing either and I'm more or less playing devil's advocate here a little bit. I'm just saying there needs to be another alternative. Can someone come up with a system that maintains the private sector, is profitable, yet is fair? Because frankly I haven't heard of any different course. Sounds like a danged if you do, danged if you don't.
Brian,
You are right about the $10 dollar co-pay being convenient in a nationalized health care system. The other unanticipated side of the equation is a $25 gallon of milk. Inflation will prevail.
Government is SO wasteful and inefficient that rationed care and diminished quality is the woeful outcome. Ask Britain.
The solution is to have a truly competitive private health care market. The way it is now, there are some monopolistic aspects that distort costs. By diminishing regulation and creating a competitive environment, I believe your kidney stone experience would have cost around $500.
Lets hope we can get some real "reform" by getting government's hands out of the pot and foster a competitive environment in the heath care system.