The USPS is hemorrhaging money these days but to be fair, it wasn't that long ago (early 2000's) that they in fact WERE generating a net gain. That is of course until Congress did something unusually sensible during the Bush Administration (2006). They started requiring the the USPS to pay 5.5 billion per year into an account to fund their future retirees' healthcare 75 years in advance. This quickly converted their net profits into net losses. Actually, they should have been funding them all along. This tells me that the USPS was perhaps fibbing on its books or at least finding creative ways to leave certain things off of the liabilties column on their balance sheet. This is a huge no-no. Even if you can disregard it legally it is highly unethical and self-destructive. Paid employee benefits even if in the future are considered liabilities. Did they not report those in order to allow what would have been the offsetting asset values to be moved over into the revenue pile? If they did report it, how did they offset them on the balance sheet with assets while showing a profit? I thought the government REALLY hating "book-cooking" a la Enron.
It must be because of their big, mean CEO that makes $800,000 a year while the average CEO in this country makes about $145,000. Ok that wasn't necessary but it doesn't hurt pointing that out.
Anyway, the comment was in lieu of a debate on the The Affordable Healthcare Act.
The problem I am seeing is I'm not exactly sure what is "affordable" about it.
Admit it - you could care less about making health care more affordable, you just want someone else to pay for it for you. Kids being allowed to stay on their parents policy until they are 26? Sure - that won't drive the price of their parents policy up.
Before your blood pressure spikes, allow me to explain based on tangible reality....
The new Affordable Healthcare Act is going to force both public (Medicaid) and private insurers to cover the costs of preventative health care maintenance such as obesity counseling and smoking cessation programs. When Obama says that investing in preventative health measures will lead to overall lower costs of health care for the masses, in theory, he'd be correct - if the plan would actually work.
Just like a politician, he has discounted the element of Human Nature and how it will ultimately neutralize these efforts. Human nature, which is genetically and evolutionally hard-wired into each and every one of us, brings out the best in some while bringing out the worst in others. Now I believe his intentions of getting American healthy are noble and decent but I can't insult his intelligence by suggesting he actually "believes" this will work.
Here is a scary thought. 1 in 3 Americans are overweight now. That's 100,000,000 of our roughly 300,000,000 citizens. Let's just say only half of them agree to the counseling. Let's also pretend that these counselors don't take advantage of the suddenly bullish job market in their favor created by the government and don't charge anything astronomical for their services. Let's say maybe $1000 for a year's worth of therapy. This equates to $50,000,000,000. And of that number, how many of those people will succeed? If all 100,000,000 people decided to jump on the service and were charged maybe $5000 per year, this is now half of a trillion dollars for ONE YEAR. Where will they get that money? eBay? Oh that's right, China again - the holding bank of the National Credit Card! Then of course there are the other preventative counseling services for other ailments and conditions and there are plenty of unhealthy people that will require more than one.
Keep this in mind; obese people know how to lose weight. Smokers know how to quit smoking. They just don't want to. And quite frankly, if they are happy living this way, I say let them as long as it doesn't cost me any money.
Ah, but wait... it does.
Roughly 18,000,000 more Americans will qualify for Medicaid under this new Act. Medicaid is known for only paying about half of what they owe to healthcare providers. This new windfall of patients with lousy coverage will lead to greater losses by the providers as they get stiffed. This in turn leaves the providers with limited options of which to make up for the lost revenue. They will have to either deny Medicaid patients all together OR start raising what they charge for services in order to compensate for their shortfalls. (Kind of like when you wanted that 1:00 AM curfew so you asked for 4:00 AM and negotiated down.) They will in turn charge the private insurance company more which will in turn cause them to raise their rates. This and of course dropping some people which I still don't see how the government can stop them from doing that. If they force them by law, they are literally forcing a business to sell a service to someone at a tremendous loss. When this goes uncorrected with not enough positive net cash with which to offset it, it can cause insolvency with some insurers which only takes a few years at the most to completely shut some of them down. Then what? Oops!
Adding these extra people to Medicaid is moronic because it doesn't take 18,000,000 poor people that were ineligible for it before, but rather it takes 18,000,000 people that didn't need it in the first place. Some are just irresponsible young people that choose to pocket the $100 per month and party with the money instead. By the way, yes, catastrophic insurance is about $100 a month or less. It's not expensive. Get it with the big deductible and a very basic Rx plan and you can pull it off. I've done it. If you catch a cold you'll have to get some Afrin and wait it out. If you break bones in a car crash, you're covered. You'll get by I promise.
People never seem to look at the big picture and think things through. (Human nature at it again). Once people are happy about how something affects them, they stop caring about everyone else. If the government forced your employer to give everyone a 50% raise, you'd think it is good thing because it benefits you. This despite the added that costs could literally drive them into bankruptcy or at least to the point where you and some others could lose your jobs. Now what?
Remember that health CARE and health COVERAGE are two different things. And people like to say you are entitled to one or the other or both. I say you can declare yourself entitled to anything you'd like provided it doesn't also include you being entitled to someone else's money or making someone pay for your stuff. If you get in a car crash and get rushed to the emergency room, you will get care. That is protected not only by law but a doctor's Hypocratic oath. You will however be stuck with a bill you have to pay if you don't have the insurance coverage to do so. If it was the other driver's fault, he can pay. If it was yours, hey - be grateful that some people came to your rescue, put you back together and you're alive now. You couldn't do it on your own now could you? And don't ask the doctors to do this for free considering they give up about 12 years of their life to education and start working with well over $100,000 in debt. They have to feed, clothe and shelter their families just like you do.
There are two primary reasons our health insurance is so expensive:
1) I say this at the risk of insulting my lawyer friends but LAWYERS (well, some of them). For every lawyer that is doing something frivolous, there is one fighting them and I thank God for their efforts. But the dark-side of the legal profession drives costs up with law suit after law suit keeping doctors, hospitals and drug companies tied up in expensive legal battles and then some of these same lawyers eventually get into public office and continue their assault - only with greater firepower. This is scary. I appreciate a good lawyer but why so many in Washington? What about economists? What about financial experts or accountants or even MBAs?
2) It should be. We abuse it and expect them to pay for everything. You want them to pick up the tab on prescription DKNY glasses. You want to go on prescription anti-depressants because your cat died You want your high blood pressure medication paid for even though you eat fast food every day and smoke a pack of cigarettes. The more they are going to cover, the more you are going to pay for your premiums. When the insurance company pays for something, you add a third-party payer into the mix. When you create a third-party payer, costs go up. People will be frugal with his or her own money but not someone else's.
When you take your dog in for an MRI and pay $250 dollars for it, it is the exact same machine as the one hospitals charge us $3000 to sit in for 30 minutes. Why is this the case? Because it is a single-payer system that comes out-of-pocket. The veterinary industry has has done its price-optimum homework and have calculated that if it is much higher than what they charge, then the out-of-pocket payers won't even bother with the service and they will make nothing. The medical industry knows that with a 3rd party payer, they CAN in fact charge as much as they do. This is THEIR optimum price. And this cost issue is worsened when your insurance refuses to pay for your MRI when you truly need one. I suffered through this personally for almost 20 years before I was finally approved for one.
The only thing that will drive costs down are when people have to pay more out of pocket. Consumer mentality kicks in and people begin to shop around for better deals and make wiser purchasing decisions. Perhaps make some lifestyle choices like eating healthier and exercises and maybe "dealing" with a broken heart sans the medication. This in turns forces the providers to become more competitive with one another. This is not a panacea for everything. Illnesses and accidents will still occur but it will be more manageable if not abused by the consumer driving costs back up. And the greatest part? With some leftover money we can legitimately insure those that really need the help - those that are trying their best but still can't make ends meet and have health issues they are unable to manage on their own. See? I do care. I just don't like being taken advantage of.
This will never happen though. Main reason is because who'd like to go first? Will someone step up and say "I'm not going to use my Rx card to pay for my prescription? No. I challenge Washington to step up and think of creative ways to encourage people to start driving the costs back DOWN. Reward good decisions and let those who do not learn the hard way. THEN we can help them out. People have to be allowed to make mistakes. They don't have to be fatal ones - just harsh enough to drive the lesson home.
Promoting tough-love is not a realistic task for most career politicians though. It may in fact be career suicide trying to promote this behavior. Telling someone you're not going to take care of them anymore nor give them someone else's money is just not in their language. Politicians can't say "no" to anyone.
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