Wednesday, March 10, 2010

The Impact of Insuring the Uninsured

The democrats (and some Republicans) are insisting that every American MUST have health insurance, and that by providing health insurance to those who do not currently have it will save America billions of dollars a year.

This logic is based on the frustrating fact that many uninsured Americans who need health care, DO GET health care, but do not pay for it. Some of them show up and emergency rooms and skip out on the bill. Some go to private doctors and either arrange to get free care or promise to pay and then fail to fulfill that promise. Others go to free clinics or clinics operating to serve poor and uninsured people.

I'm going to go on record saying that insuring the uninsured will not save billions of dollars a year in health care costs, and it will not save millions of dollars a year in health care costs. In fact, it will likely cost us more than it will save us.

Let's suppose, for the sake of argument, that uninsured people (Americans and illegal aliens living here) run up 10 billion dollars a year in health care bills that they do not pay. I don't know if that number is even close, but for the sake of argument, let's just use that number.....

Now, someone has to make up for that 10 billion dollar loss. Who makes it up? Well, those of us who ARE insured do, basically. When someone runs up a bill and doesn't pay it, the cost of doing business for that provider has to be passed on, and it is (in essence) calculated into their cost of doing business. Their fees go up in order to cover those losses.

If we insure those people, the 10 billion dollar losses go away, and we don't have to make them up, right? Well .... not exactly. Instead of skipping out on 10 billion dollars in bills, that 10 billion dollars gets paid. And who pays it? The insurer. Whether it is a government-funded private program, an expansion of Medicaid or some other program, whoever is underwriting the insurance policy of those people will write checks for that 10 billion dollars. And where do they get the money? It has to come from somewhere, and it will come from the American Taxpayer. We who are paying the premiums for those previously-uninsured people will cover that cost by paying the premiums that are then used to pay those health care bills.

So, let me review and rephrase ..... The 10 billion dollars that was previously covered by insured Americans will be shifted and now be covered by taxpaying Americans. So YOU, if you're insured, will not pay for the costs of the uninsured. Instead, those costs will be covered by .... YOU, the taxpayer.

Now, doesn't that make you feel better.

Of course, those pushing for health care reform are going to argue that costs will decrease because the uninsured will no longer be going to expensive emergency rooms for treatment, but will instead seek treatment at "regular" doctor's offices.

Is that true, and does that really save money?

Well, yes and no.

It is likely/possible that those people who are now seeking care in emergency rooms will instead go to a "regular practice" to seek treatment. But let me ask: Does it REALLY cost that much less to treat a sore throat or a runny nose in a "regular" doctor's office than it does in an emergency room. Oh, I know the CHARGE is much less, but is the real COST that much different?

I would contend that the real cost for those people seeking treatment isn't going to be really different regardless of where they seek treatment. One of the big reasons the emergency rooms charge more for "basic" treatment is that they are covering the cost of the uninsured. (Yes, there are other reasons, too, including the fact that you are paying for a convenience). Once that increased cost factor goes away, the cost of operating an emergency room will go down. Furthermore, if a government-funded program starts flooding patients into private practices, and if reimbursements for these patients is less than for other types of insurance (like it is for Medicaid), the costs of "regular" private practices will go up faster than the revenues. Who will make up for these losses? The other patients. That would be you and me.

Those who support health care reform will also argue that health care costs will go down by insuring the uninsured because they will stay healthier and need less "serious" care because they will receive better preventive medicine.

I've already discussed how preventive medicine will cause costs to rise instead of decrease. But just to revisit that issue, in brief, visiting the doctor for hundreds of preventive care visits will increase health care costs overall, even if diseases and problems are diagnosed and treated earlier.

The bottom line is that anyone who tells you that they have a plan to save you money by creating a government bureaucracy and by cutting health care costs ... well, they are simply lying through their teeth.


Anonymous,  March 11, 2010 at 12:17 AM  

It seems to me that we overlook important truths of complex societies. The first is that once granted government entitlements become perpetual. The costs associated with those entitlements therefore become perpetual costs, and over time, the costs actually increase. The proof of this is that gasoline used to cost 25 cents a gallon.

We should wonder why our federal government thinks it is entitled to cram these programs down our throats. Of course, adherents may argue it is the right thing to do. Everyone should have health insurance. No one wishes to deny babies lifesaving medical procedures … except that the government has no right to assess fees upon citizens in order to provide medical care for non-citizens. Most uninsured citizens, by the way, are uninsured by choice. Does the government have a right to take away any citizens god-given right to decide for him or her self?

Now I happen to think that health care is an important issue, and one that ought to be a concern to citizens. I simply do not think this is a federal responsibility and I believe the federal government exaggerates the need. Simple math: if it is true there are 50 million uninsured people in this country, 20 million of that number are illegal aliens. Of the 30 million remaining uninsured citizens, half opted out of employer health plans. So now, there are perhaps fifteen million people (out of 300 million) requiring some assistance. Divided among fifty states, less than a million per state; we might wonder why this is a ‘national crisis’.

Health care is a state responsibility. Recall that our states are sovereign. Someone might argue that state health care is a failed idea and use California as their primary example. Except Californians have dithered around for far too long on the issue of offering Medi-Cal to illegal aliens, California legislators have never seen a tax it didn’t like, or an expenditure that didn’t thrill. The issue here is that responsible fiscal management (unlike that practiced by the federal government) must limit expenses to revenues, and the people … citizens of the state, ought to be telling their legislators what they will and will not fund. What right does the Federal government have to force California to provide educational facilities to the children of illegal aliens?

So there are important issues … but we aren’t addressing them seriously. Democracy works best at the lowest possible level. We the people can control our states … we cannot control the federal government. And if we can’t, how must we limit the federal role? The answer is that we must insist that our states reassert their authority as sovereign entities, and the states must collectively refuse to allow federal usurpation of our Constitution. At least, that’s how I see it.

Linda March 11, 2010 at 6:59 AM  

I agree with your post this morning. Health care in not a right provided by the government. The government programs like Medicare and Social Security would not be in trouble today if the government had kept there hands out of the pot. Any time they see a $ that isn't being spent 'right now' they think they can 'borrow' it and 'pay it back' later. Later never happens.

I don't know the answer to the 'health care crisis', but I agree with Mustang, this is a state issue, not a federal issue.

Linda March 11, 2010 at 7:00 AM  

I need to leave another comment so I can read the other comments.

Miss T.C. Shore March 11, 2010 at 10:30 AM  

Long comment, Mustang, but a good point. I think I've made that point here, as well, but I can't remember. The more I watch politics and study the constitution, the more of a Libertarian/Constitutionalist I become.

Opus #6 March 11, 2010 at 12:34 PM  

Me too, TC. I guess all this is an education that the liberal educators tried to hide from us and our children.

The taxpayer is always the patsy. Which will discourage work and innovation in the long run. And even in the short run. Every time Obama talks up Obamacare, the Dow Jones goes down. This man is toxic.

Anonymous,  March 11, 2010 at 1:44 PM  

Ronald Reagan said it best,

The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'

WoFat March 11, 2010 at 3:09 PM  

I too agree with Mustang.

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