The American Dilemma and How We Can Fix It

Archive for the ‘insurance’ Category

CRONY ACCOUNTING

On April Fools Day amid blares, whistles, balloons and dancing buffoons our government announced that they had (due to a last minute surge in enthusiasm and interest) attained their goal of enrolling 7.1 million people in Obamacare.  Naturally, Chief Head Games Player Obama did a lap victory dance in the Rose Garden to make the announcement.

Frankly, I have always been suspect of government accounting.  There is a reason for that.  In my first job after college, I worked for the State of Illinois for two years and was one of the people who helped develop some of those numbers.  And I saw how they were crafted together.

My division of the Illinois Department of Revenue was responsible for determining the valuations for personal and real property which would be the basis for assessing the amount of property taxes that the railroads who ran through the state would pay to the various local taxing districts and to the state itself.  We had a formula for making these assessments which was fair and which had been used for years.  Not only had it been in use for a long time, it had been challenged in court by several of the railroads and upheld as a valid way of assessing their property by the Illinois Supreme Court.

As it happened, the man who was the head of my section was the retired general counsel for one of the smaller Illinois railroads.  In that position, one of his responsibilities was trying to reduce the assessments that the state levied against his employer.  Now he was sitting on the other side of the desk.  Naturally, over the years he worked for the railroad industry, he had many friends and associates at other railroads who had the same responsibility.

One of our largest railroads had a tradition of coming to our office a few days after we had compiled their assessment and taking my boss to lunch to “discuss” it.  Traditionally, they enjoyed this repast at one of Chicago’s nicer businessman’s lunch facilities, The Union League Club.  On his return my boss always seemed quite contented and a bit quiet – perhaps due to the Old Fashioneds which accompanied the meal.

Several days after one of these lunches, I had to go into that railroad’s file to make a minor change in the valuation of their property in one county for which they had filed an amendment.  As I pulled the file, I happened to notice that the total valuation which we had assessed had been reduced by a little over fifteen percent and that new valuation was certified by nothing more than my boss’ initials.

After spending hours trying to compute the assessment correctly and fairly, I was offended that all this work could have been wiped out with the stroke of a pen.  I was a little steamed and asked to see my boss to discuss this with him.  He always made himself available to me and we sat down to chat about the change.

During that conversation he told  me that the same Illinois Supreme Court decision which validated our formula for arriving at assessments also said, “Notwithstanding any formula, it remains within the purview of the Chief Assessor of Common Carrier Assessment to adjust, change or re-compute any assessment based on his knowledge and judgment.  His final determination shall be the final determination of any assessments for those railroads and private car lines who are required to report to his department.”

In other words, two Old Fashioneds and a nice lunch had far more value in determining railroad assessments than the hundreds of hours that my colleagues and I had put into following our formula.  While I followed the formula precisely during my second and final year with the department, I must say that I did so without the enthusiasm that I exhibited the previous year since I realized that the final number was going to be adjusted by my boss.  And I began thinking about starting my own business, which soon followed after my second year of employment by the state.

So what does all that have to do with yesterday’s announcement of Obamacare’s enrollment success?  Just about everything.  Simply put, I have always had some degree of suspicion when I view numbers that are generated by the government, based in part, on my personal experience.  The way in which this administration either throws around or withholds numbers seems more determined by whether they will bring political advantage or disability than providing the facts.  That certainly has been the case for Obamacare.

Since there is no oversight – no independent person or group who oversees the actual enrollment numbers – we will probably only know the truth after the fact.  But even if we were to take the generous position that the administration has accurately reported the number of enrollees, we should view that in light of the primary goal of the law to see how well it is working.

The key focus of Obamacare was to insure all Americans.  The estimates of those who do not currently have insurance range between 30 – 50 million individuals.  We need to take into consideration that many of those being counted in that 7.1 million are people who annually renew their applications for Medicaid.  Then there are the 5.6 million whose plans were cancelled because of Obamacare and might have enrolled because they had to replace their former plans with which they were perfectly happy..

So what is the net effect of this total shakeup of our health care system?  To make any definitive statement would probably be rash because all we have to rely on is anecdotal evidence.  However, based on that evidence, it is reasonable to make the estimate that we now have about two million fewer uninsured people than before the enrollment period began last October.  That number might be generously high.

And what have we spent to achieve this accomplishment that the White House celebrated yesterday?  It has cost the Federal government $677 Million to develop its website.  That states which developed their own websites have probably spent a nearly equivalent amount.  And then we spent another $100 million at the federal level to promote this law and get people to sign up for it.  That’s about $1.5 Billion to enroll perhaps two million people.  In other words, we spent $7,500 per person to get them health insurance.

Now we have to hope they continue to pay the premiums and choose to keep it.  Soon they will be receiving their insurance booklets and, if they read them, will realize that they are subject to high deductibles and will, except in the event of a serious medical event, be self-funding the entire cost of their own insurance.  In other words, with the exception of complying with the law (and even that is now in question with yet another Obama administrative change), they would still be better off if they get a bad cold or strep throat to bypass their insurance plan and get treated at the Emergency Room – as is the case now.

While I do not have a background in medicine, if one of my friends with a brand -spanking new Obamacare plan phoned me, sufferring with a sore throat and asked me what to do for it, my advice would be simple.

Have two Old Fashioneds and call me in the morning.

OBAMACARE AND THE “WAR ON WOMEN”

If you’re a mainstream liberal-left Democrat you undoubtedly subscribe to the mantra that all Republicans (in addition to being white, male and overweight) are uniformly misogynists, merciless and are actively engaged in the well-publicized “war on women.”  That’s true even if you can neither spell nor pronounce “misogynist” or know it’s meaning.  No matter.  When yelling slogans and enjoying the approval of the mindless mob, there’s no reason to think for yourself or form opinions which might conflict with what the politburo tells you to think.  Besides – thinking has been identified as a dangerous activity and has (or soon will be) outlawed – so why waste your time on it when you could be painting picket signs.

There is certainly some evidence that, if taken out of context, would suggest that those who are Republicans (code name conservatives) might fit the definition which you have been taught in your local cell.  After all, a lot of Republicans//conservatives (code name people who have a religious background) oppose abortion – and that, of course, is an assault on your “right to control your own body.”  Granted, there are some in that conservative camp who feel indisposed to pay for your voluntary indiscretion resulting in the need for an abortion.  Most would reluctantly agree to the procedure in the very rare cases where rape or incest is involved.  But rehashing Roe v. Wade is not the thrust of this post.

So you’ve hitched your star to those who are really concerned for the well-being of Americans – the Democrats – and point to all the wonderful things that Obamacare contains.  And there are some excellent features in the act.

It’s great that irrespective of pre-existing conditions, people will be able to get insurance.  Of course, given the fact that people with life-threatening or chronic conditions will pay the exact same premium as someone of his or her age who is disease or drug free means that you and I will contribute to their health insurance directly by paying higher premiums on our own policies and indirectly through the inevitable tax increases that will be forthcoming from Washington to reimburse the insurers when they fail to make money on the policies they are being mandated to sell.

It’s great that there is now portability of insurance.  If you lose your job you will be able to keep your current policy.  Of course, you will be required to pay the full amount of the premium a portion of which your previous employer subsidized.  It’s one of the benefits of having a job – something lost on approximately 13.6% of our populace who are unable or unwilling to find employment.

The main theory behind Obamacare is that in a nation that used to be as great as the United States it is unacceptable that thirty million of us should be without insurance.  Apparently, those who are in that condition are less impressed with their precarious perch than those in the marbled halls of Washington  since the latest polls indicate that three out of four or those uninsured mistrust Obamacare and do not plan on enrolling and a solid one quarter of them have never even heard of it – despite the hundreds of millions our government has spent on public relations to promote it.

We know from well-established studies that women, more than men, need health care and treatment.  Part of that is because women are child bearers and have internal configurations that are more complicated than their male counterparts.  In addition, women have a longer life expectancy than men which results in more medical attention for a longer period of time.  Therefore, it is not hard to conclude that women will be more impacted by the provisions of Obamacare than men.

Since women live longer than men, the $600 Billion cut in Medicare funding written into the law to pay for other parts of the law hits women especially hard.   One of those cuts will affect what are known as “home health services.”  Perhaps you’re familiar with this if you’ve seen commercials advertising “companions” who might assist an elderly woman who needs someone to prepare meals, do some cleaning or simply provide companionship.  There are 5.2 million elderly (the vast majority of whom are women) who will be losing insurance coverage for these services due to Obamacare.  That’s a lot of people who either are going to have to move into a nursing home or will be left to their own resources.

Now I realize that five million is not a lot of people.  After all, when that number lost their previous “crappy” insurance last year – the administration pooh poohed this as a “small number” so we shouldn’t really be too concerned about all these elderly people.  That is unless one of them happens to be your aunt, your mother, your sister – or you.  But there is hope.

Suddenly last Friday, el Presidente decided that those formerly “crappy” insurance policies were good enough so that people could keep them another two years.  Personally, I took that as an act of beneficence – not to mention an astute political move, deferring all the forthcoming cancellations beyond the mid-term elections.  (Shame on me for even thinking that there was a political motivation behind all this).

So ladies, if you’re lucky – you never know when Obama will whip out his pen and perhaps unilaterally change the law for the thirtieth time and restore the home health benefits that were dropped by the law and restore all the other cuts that were made to Medicare.  That would go a long way to end the Obamacare war on women.  And if you’re really fortunate, he may pick up his phone and call to let you know the good news.

TWO BIT INSURANCE

If you’re really old you may have heard the expression, “That’ll cost you two bits.”  Even those who didn’t know the history behind that understood that it meant twenty-five cents – a quarter of a dollar.  This was based on the Spanish real which was the equivalent of our present dollar and was the primary unit of monetary exchange for several centuries in the New World.  The coin was frequently cut into eight pieces, thus two bits was one quarter of a real.

For a moment, let’s consider the underlying reason for insurance of any kind.  Simply put it is intended to protect the purchaser against a specific kind of loss whether that is to a person’s car, home, health or loss of life.  Essentially, in exchange for payment of an agreed on premium paid to a second party, that insurer is assuming the risk to which otherwise the policyholder would be subject.

Perhaps you’ve heard that a compromise is an agreement in which both parties walk away dissatisfied.  The insurance contract is one in which both parties hope for the same outcome.  Both of them hope that an event which would cause a payment under the contract never happens.

The individual who insures his car certainly doesn’t hope to have a crash so that he can make a claim.  The company that insures his car similarly hopes that the insured drives in a safe manner so that no accidents occur and the company can keep the entire premium the insured has paid.

There are certain types of insurance that are almost pure money makers for the insurance company.  Most companies that offer life insurance also mention that for a “small additional premium” the person taking out the contract can add a provision for death that results from an accident which would double the face amount of the policy.  That sounds like a good deal to the uninformed.  The fact is that ninety-eight percent of the premium collected is pure profit to the insurance companies because the number of accidental insured deaths is extremely small.  But are there any forms of insurance which provide a terrific return for a small premium?  There is at least one with which I’m familiar.

What if a potential catastrophe, far beyond Hurricane Katrina or Mt. St. Helens had a reasonable likelihood of happening.  Unlike these localized natural disasters, this catastrophe would effect everyone and everything in the country.  Food and water would be scarce if available at all.  There would be no energy either to heat our homes or provide light or cooling.  Society as we know it would end with mobs looting houses for any scraps of food they could find and the authorities would be overwhelmed trying to deal with the mobs that far outnumbered them.  If civil authority even survived, it would take at least one year, possibly longer, to restore the basic services which we expect when we flip on the light switch or turn on the tap.  But before that happened, as much as ninety percent of the American populace would be dead.

Given the scenario I just described, would you be willing to pay $100 a month to make sure that we could avoid the problem?  Perhaps your budget doesn’t have that much wiggle room, so how about $50?  Still too high?  Would you be able to find $10 a month to stave off disaster?

On April 16, 2013 a Pacific Gas & Electric sub-station was attacked by what authorities now believe was a terrorist assault.  While no lights went out which is part of the reason this story has gained very little attention, it took the utility 27 days to repair the damage to the cut telephone lines and repair the 17 transformers which were disabled.  Some experts think that this was a trial balloon for a larger and more devastating future attack.

There is no question that our electric grid is vulnerable.  One of the most significant worries is that a massive EMP (Electro-Magnetic Pulse) occurs, knocking out our entire grid.  It could take years before the damage caused by such an event could be repaired.  Such an event could be caused by terrorists.  There is no lack of maniacs on a mission in our world.  Or it could be a natural phenomenon – a massive EMP sent out by our sun.  That happens every 150 years or so and is now a few years overdue.  The last one occurred in 1859.

The good news is that we know how to prevent the devestation which might occur if such an event happened – and we don’t have to develop new technology to implement.  We have the technology today.  So what would it cost us to safeguard all of us from societal collapse, starvation and the end of civilization.  The answer is less than two bits per person per month!  The total cost would run about $6 Billion.

There is a bill known as the SHIELD Act which was introduced in Congress in June, 2013 which would require the federal government and local utilities to develop and implement effective standards to protect against an EMP pulse.  The bill is the work of Rep. Trent Franks (R – AZ) but so far has garnered little attention and not a great deal of support.  In part that is because local utilities are concerned about handing over too much oversight to the Federal government.  I understand that concern.

But no matter your political view, there are occasions, albeit infrequently, when something is of such importance and so extraordinary that it falls outside the realm of theoretical philosophy.  Then even the most ardent partisan, in the interest of true public safety, should agree to a compromise however distasteful it might be.  They can argue their philosophy later – but will have no ability to do so if they are one of the victims of an avoidable disaster.

And that may not be two bits worth of information – but it is my two cents worth.

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WEBSITE DESIGN 101(01010101)

Health and Human Services Secretary Kathleen Sebelius might have been more gracious recently when a local council member handed her a copy of “Websites for Dummies,” while she was pitching the virtues of Obamacare at a community meeting.   Perhaps his gesture was too little too late – as the “enrollment numbers” for www.healthcare.gov have been released for its first month of operation.  Even to the supporters of this legislation they were “bad.”

Let me be the first to say that I am not a computer programmer.  But I do have a solid educational background in logic and an affinity for math – which are the bases for any program.  As an end user, I have commissioned and paid to have two separate programs written.  And while I believe that I might have, with the aid of “Websites for Dummies” and other reference guides, been able to write those programs myself, I recognized that contracting this work out to people who made a living doing just that would be both time and cost effective.

In my case, unlike the government website administrator, I had accountability – to the bank that held my mortgage, to my dry cleaner, to my dogs to provide food for them and to myself.  In the second of these efforts I made a terrible mistake.

I hired a programmer who talked a great game and delivered virtually nothing.  After looking at what he had developed after three weeks (the whole project was only supposed to require six), I realized that I had spent five thousand dollars on a retainer on which I would see no return.  (The fact that he accepted the retainer and immediately took off for ten days in Tahiti – where he could “think about the project” was my first clue).  So I fired him and replaced him with someone who was able to accomplish the task.

You would think that if a person were in charge of a major project such as the Obamacare website rollout, that individual would be getting very little sleep and spend all her time checking to make sure that the project was on schedule and was working properly.  Apparently, that is not the tack that HHS Secretary Sebelius employed.  There is no other reason to believe that it has been such a dismal failure.  And that despite the fact that hundreds of millions of dollars have been spent.

What should be disturbing to anyone who is being pressed into the Obamacare system is that developing a website is by far the most simple of the tasks that government will be expected to perform regarding the nation’s healthcare system.  If this is such a disaster, what are we to expect down the road when we might actually need to use the much touted “superior health insurance” for which they want us to sign on the dotted line?

One of the issues that I think was missed in the website development but which is borne out by the initial low enrollment numbers, notwithstanding the federal website’s problems, is the fact that “selling insurance” is not the same as “selling a tangible product.”

If you go to Amazon you can look at that beautiful four piece toaster or the warm and snuggly down comforter.  These are items that you can touch, feel and envision in your home.  Insurance, whether it is for your house, auto, health or life are intangibles – and they are products, while they have a potential value, are ones that you hope never to use.

Most consumers view paying for any kind of insurance as a monetary outlay and paying the premiums does not provide the psychic reward that purchasing a tangible product offers.  They view this as an expense rather than a benefit.  Therefore, this is a hard sell – and one that is best effected with the interaction of another person.

A website, even the best designed one, does not provide that personal dialogue and discussion.  And when you have a website that simply does not function in a user-friendly manner, that provides a discouragement that the already unwilling potential buyer might find to be the final reason not to bother with it.

With only slightly more than 100,000 people “enrolled” in Obamacare during the first month of operation, the administration is only twenty per cent to the goal they have set for the law to work.  By “enrolled” we do not know how many of those people are purchasers – and how many are merely browsers who are considering making a purchase.  And it is significant that three quarters of the people who have so enrolled came through websites that the states, rather than the Federal government constructed.  So apparently, building a working website is not  all that tough as 36 states have accomplished it.

But imperative in Obamacare’s succeeding is the demographics of who is actually signing up for health insurance.  It is imperative if this law is to work that 2.4 Million people who are 18-34 years old participate because they will be overcharged for the insurance that they receive in order to make up for the deficits that older and sicker people will drain from the insurance companies.  We have no word as to the makeup of those enrollees although that is promised for next month.

As I write this I am listening to President Obama give a press conference in which he is offering a “fix” for those whose health insurance contracts have been cancelled by their carriers.  His solution is to “allow” those insurance companies who cancelled their contracts which did not comply with Obamacare’s mandated coverage to extend those through 2014.  There is only one problem with this solution – as well intended as it might be.

The states regulate insurance companies who offer product within their boundaries and the Federal government does not have the power nor the authority to issue this “fix.”  And therein lies the fundamental flawed premise which underpins Obamacare and every other over-reaching intrusion that those of “the Federal government can do it best and should do it” mindset subscribe.

Not surprisingly, even if we accept the statement that 100,000 have actually enrolled and will confirm that with premium payments to Obamacare in the first month, almost four times as many people have signed up for Medicaid – which is free to them and will result in increasing medical costs paid by all American taxpayers.  The explosion in Medicaid in and of itself will certainly sabotage the financial assumptions that President Obama made and touted that this law would actually provide savings to our skyrocketing healthcare costs.

But if the President wants to attract those 18-34 year olds who under the most rosy scenario have to enroll in order for this scheme to work, I would like to offer a suggestion that may attract them.  Simply offer them a new free iPhone every time one is released.  Giving away “free stuff” is something that this administration does very well.

SELLING OBAMACARE

There’s no argument that President Obama is a good salesman.  He convinced enough people to vote for him to give him two terms in the White House.  P. T. Barnum would be proud of him.

So today, the Salesman in Chief turned his attention to Obamacare with a press conference.  Not surprisingly, he was surrounded by a group of people who will benefit from the ACA – and it is undeniable that there will be people who will benefit from it.  Those people are individuals with pre-existing conditions.  But the problem for this grand scheme is that there will be few else who will be able to make that statement.

It seems to me that enthusiasm for Obamacare is not much different than the reaction one might expect from a diffident bachelor whose friends are fixing him up with a blind date.  The young man asks, “What’s she like?”  To which he receives the answer, “She’s got a great personality.”

One of the statements that the President made today was that a person could purchase a plan at a mere one hundred dollars per month.  That’s an interesting statement.  Particularly as over the last five days I went to the exchanges for thirty-two states (which actually were semi-functional) to get quotes.

The quotes that I requested were for a 21 year old individual female.  This is the least expensive category of applicant that I was able to find.  Let me give you an example of premium and coverage costs for an applicant in just one of those states, Nevada.  The premiums varied by a few dollars depending on the state.

So, Ingrid Johnson, a single 21 year old wants the most affordable plan that is available under Obamacare in Nevada.  She is a non-smoker.  The least expensive plan available to her is what is known as a “Catastrophic” policy.  This is intended to cover her should she develop a serious medical condition.

Her premium cost for this policy is $143 per month.  (Not the $100 cited today by the President in his press conference).  But there is an annual deductible before she receives one dollar of benefit in the amount of $6,250 per year.  In other words, she will have to pay out $7,966 before her insurance starts paying any of her medical expenses.  That works out to an out-of-pocket cost of $663 per month.

But let’s assume that Ingrid has a small income and the full amount of her premium cost is subsidized by the Federal government.  That means she is still responsible for the full deductible before she receives benefits.  That translates to a monthly premium of $520 per month.

Perhaps the President is relying on the fact that the math skills of Americans is exceptionally poor.  Perhaps he is hoping that one of the glitches with the iPhones to which he has recently referred is that the built in calculators are malfunctioning.  Perhaps he just thinks that Americans are just plain stupid.  But the math and the President’s statements just don’t relate well to each other.

It’s seldom that I offer the President advice.  But here goes.

If the President wants to sell this to America, I can think of nothing that would be more effective than that he issue one of his executive orders and require that he and his family, the Congress, the members of the Supreme Court and all the toadies in the administration be enrolled in it.

That might get America a little more enthusiastic about the greatest Ponzi scheme ever concocted by Washington.

“THE FOLKS”

In the last post I spoke about the latest new catch phrase, “the law of the land” which those who support the ACA use in reference to justifying Obamacare.  But there is a second term which I find equally annoying and which is frequently employed both by the President and by some on the right, notably Bill O’Reilly of FOX News and literary fame.  That phrase is “The Folks.”

Personally, I find this term rather disparaging – no matter who the speaker.  To me it is condescending, as though the President and Mr. O’Reilly are both sitting on their lofty perches, looking down on those who are, in their perception, beneath them, the “little people.”

Well, “the folks” are getting a little taste of “the law of the land.”  The Heritage Foundation has released their analysis of how health insurance rates, on average, will be affected as a result of Obamacare.  The following link will take you to their study – which shows an increase in 45 of the 50 states and the District of Columbia.

http://www.heritage.org/research/reports/2013/10/enrollment-in-obamacare-exchanges-how-will-your-health-insurance-fare

The Heritage Foundation in this study, which makes certain assumptions which may or not prove to be completely valid, simply examines the cost of currently available insurance versus what will be available on the insurance exchanges.  It is unclear whether this study incorporates the generally higher deductibles which most insurers are building into the new policies.

This, however, is merely the first issue, albeit probably the most surprising one, which “the folks” will deal with come next year.

It is hard to argue that Obamacare is anything but an “ambitious program.”  And it shouldn’t surprise any of us that despite having more than three years to build a website, the one that HHS commissioned is flawed, perhaps fatally so.  We are now into week three of the “rollout” and even supporters of Obamacare are being forced to admit that there are “glitches” which some are even willing to admit are “serious problems.”

Beyond the problems of simply enrolling people in Obamacare, and if you review the increases which the majority of healthy, younger people will face in order to support those who are older and more sickly, it seems unreasonable that the underlying financial assumption that getting the young to enroll and pay more than they actuarially should in order to subsidize those with serious health and pre-existing conditions, will be realized.  That is simply a statement related to the economics of this program.

But that may be the least important reason for a person choosing not to enroll in Obamacare.

One of the much touted benefits which purportedly makes Obamacare “affordable” is the fact that some taxpayers will be eligible for subsidies.  However, the system is currently unable to compute what those subsidies will be.  Therefore, no one who enrolls can be certain what his or her net premium cost actually will be.  That, of course, provides a further dis-incentive for signing on the dotted internet line.

But let us “folks” step back from the problems in getting an effective website up and running, despite the government’s spending hundreds of millions of our taxpayer dollars to implement it, and look at the broader picture.

When I flew frequently, I remember reading an article in one of the In Flight magazines that there were certain things about an airplane which caused consternation among passengers.  One of those was getting on a flight and noticing that the ashtray in your seat’s armrest was filled with cigarette butts.  Passengers tended to ask themselves, “If they can’t clean the ashtrays, how well does the airline maintain the plane itself?”

That same line of thinking can reasonably be applied to Obamacare.  If it is essential for the success of the program that young people sign up but have commissioned a website, the primary vehicle to achieve that end, that is apparently incapable of achieving that goal, then what would a reasonable person expect from the far more important issue of taking care of “the folks’” health – and at what price?

If a person bought into the value of Obamacare as it was sold by the President and his supporters based on how it was originally presented, they must, if they are honest, be greatly disappointed in the product which we are now being required to purchase.  Of the original promises made by Obama, the only one which appears to be accurate is that those with pre-existing conditions will be able to obtain coverage.  And that is a good provision.

But the promise that “the folks” would on average see a decrease of $2,500 per year in the cost of insurance, apparently not the case for most; that people would be able to keep their present insurance if they liked it, apparently not the case for many; that people would be able to keep their health care provider, apparently not the case for many more.

A reasonable person would ask himself or herself, with this sort of a track record at its launch, what can we expect if Obamacare gets fully implemented?  But before you come to a conclusion there is yet more bad news.  Embedded into the source code is a disclaimer that “the government is not responsible for the security of any information which is posted by the user on the site.”  According to interviews I heard with five different IT professionals, the way this site was designed provides an open invitation to hackers to access our most important health and financial information.

Recently, I read that an astounding one out of four of us currently suffers from some form of mental illness, including depression.  I suspect that if Obamacare truly gets fully rolled out, “the folks” are going to be asking for a lot more prescriptions for valium. .

‘TILL DEBT DO US PART

The wrangling, name calling and finger pointing continues apace in Washington with all parties blaming each other for everything that has gone wrong in human history since Eve tempted Adam with that non-GMO-modified apple.  It’s gotten even uglier than usual with people openly speaking out their venom in such terms as “terrorists,” “hood,” “thugs,” “radicals,” and, of course, everyone’s favorite term, “suicide bombers.”

As one might expect from his four and one half years as the Chump in Charge, Obama is leading the armies of name callers with his S. S. commandants rallying their respective platoons, Rep. Nancy Pelosi and Sen. Harry Reid filling in the gaps when vitriol from the White House abates as the Prez and his corps reload the tubs filled with boiling oil.

Yes, my fellow Americans, we are again at the precipice described as the “cliff over which there is no return,” or, more accurately, we are at the first of two as we prepare to catapult over the first cataract and into the second.

This sort of behavior would be unacceptable if it were being enacted by teenagers – and it is beyond comprehension when it is played out by those who are not only presumably adults but who are elected officials.

It’s somewhat difficult for me to understand how the Senate Majority Leader, Mr. Reid has the gall to excoriate the GOP for waiting until the last minute before we approach the September 30th deadline for having a budget (which the chamber he has led has failed to pass for three years) or to pass a Continuing Resolution that would allow government to continue to dysfunction.

My calendars, (I have two of them), both indicate the date of September 30th quite clearly as, I am sure, do the Majority Leader’s.  Given his concern that we might not reach a resolution in time, I cannot help but wonder, with his sense of urgency, why in the absence of a solution, Mr. Reid did not eschew his and his senate colleagues’ five weeks vacation and attend to the important business at hand.

It is somewhat difficult for me to understand how either Mr. Reid or his House counterpart, Nancy Pelosi are now so impassioned.  If you have ever had the misfortune of listening to either of them speak, perhaps, like me, you have been tempted to call EMS on their behalf to shock them into having a pulse.  They both exhibit about as much emotion as a clam on its way to being shucked.

But putting personal feelings aside, I suspect that, in some form or other, this drama will get resolved successfully by being put off a few days or weeks when the far more serious issue of the National Debt Limit must be dealt with before it is breached, according to Treasury Secretary Lew, on October 19th.

I wonder if Obama remembers how he excoriated George Bush, when he was running for election,  for being so wasteful by increasing our national debt.  When Bush left the White House, the “official” National Debt stood at $10.7 Trillion.  Candidate Obama vowed that “If he were unable to cut the debt in half by the end of his first term, he didn’t deserve a second one.”  Today, five years into his and his colleagues’ mismanagement, we are butting our heads against $17 Trillion.  We should have taken his 2007 campaign statement at face value.  There is little that he has said since which deserves that much regard.

Among the many fiscal problems is the granddaddy of them all, Obamacare.  As the numbers are now being released as to what it will actually cost for forced participation in this plan, it is evident that the name of the Affordable Care Act should be changed to the Unaffordable and Unworkable Care Act.  This first stab at socializing medicine will undoubtedly further accelerate our adding to the already burgeoning National Debt.

Like any good used car salesman who counters the prospective buyer’s observation that, “the tires seem pretty worn,” the Prez responds that having flatter tires makes for a softer ride.  That is pretty much the spin that recently came out of HHS Secretary Sibelius’ mouth when she spoke about how “pleased she was that the actual cost of insurance is going to be less than her department’s first estimates.”

The problem with that statement is that nobody pays from an estimate but from the actual bill.  And it is evident that for most Americans, particularly for those who are younger and healthier, most premiums will increase – and most coverage will decrease.  The one thing that I have yet to hear any official discuss is the actual cost (not just the premiums) of being insured.

Health, like auto insurance has two components.  Well, actually three.

The first is the actual cost of coverage – how much the policy owner pays in premiums.  That component is, in a rational marketplace determined by a number of factors, the most important of which is the amount of coverage that is selected.  Another important factor is your actual driving experience.  If you have had a substantial number of accidents or traffic citations, the insurance company is going to consider you a higher risk and charge a higher premium to cover you.

By forcing insurers to cover all people of the same age at the same rate, including those with serious pre-existing conditions and mandate they are as insurable as a healthy person, Obamacare effectively eliminates the basis of intelligent insurance underwriting.  Naturally, this will cause great losses for insurers and the only way they can make these up and still stay in business is to overcharge those (typically younger clients) higher premiums than they should be paying..

The second component which determines your premium is how much risk you are willing to accept and how much you want the insurance company to underwrite on your behalf.  A driver who selects a comprehensive deductible of one thousand dollars will have a lower rate than the driver of a similar vehicle who chooses a one hundred dollar deductible.  A higher deductible is a money saver for the careful driver who is not involved in accidents.

The same principle applies to health insurance – a point which is omitted from Sec. Sibelius’ statements on “premium cost.”  The department made the statement that a “bronze plan,” the most minimal one available under Obamacare, will “only cost a healthy, young male about one hundred dollars per month.”

What she fails to point out is that the person who owns this plan will be responsible for the first five thousand dollars of medical expenses out of pocket before the plan pay a single cent in benefits.  So a person who selects this coverage, should he encounter a medical situation, will effectively have paid over five hundred dollars a month before he receives a dime in benefits.  This is government “accounting” and lack of honesty at its finest.

But I referred to a third point – and, perhaps this is the most important one in the discussion.  Let’s assume, for the sake of discussion that Tinkerbell suddenly pays a visit to the United States and sprinkles pixie dust over all of us.  In a moment, we all decide to sign up for Obamacare and there is not a single uninsured American left in the country.  Who is going to service all these people?

We are seeing a decrease in the number of physicians and medical staff; we are seeing hospitals close or consolidate; and to this smaller group of providers we would see a massive increase in the number of patients.  How can the system possibly handle this?  The answer is, it can’t.  Not unless medical services are rationed.  That is precisely what has happened in every country that has socialized medical treatment.  That is why people like Sarah Palin call the bureaucracies that are being created, “Death panels.”

So what does Obamacare have to do with the debt ceiling?  Even its proponents admit that in the “first few years” it will add to the amount of debt.  But the “real cost savings” show up a few years down the road.  In other words, we’re going to sink deeper into debt but “later on” Obamacare is going to “more than pay for itself.”

Having yet to see a government program that actually worked the way it was sold to the American public, I have only one comment, brilliantly expressed by comedian Bill Cosby in his routine, “Noah”.  That word is, “Right.”

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