Government Health Insurance Hurts Self Sufficiency

Why is it that every time the private sector fails, it the fearful are so willing to let the federal government take over?  Socialism is like the parent of a child who got a speeding ticket, deciding the best course of action is to take away the car and do all the driving from now on.  Currently on the list is health care.

I consider the government to be the servant of the people, and like any potential employee, I’d like to see some references.  Let’s see…the government has handled retirement (Social Security),  and education.  Social Security is near insolvent, largely because somebody decided the first generation should receive benefits without actually contributing much, if anything.  Not to mention, the SSA has employees and offices all over the country, costing money that could otherwise be invested in individual retirement accounts.  How about education?  I’ve never heard of a private school that underperformed its local public counterparts, because it has to be accountable.  If it didn’t work, people wouldn’t pay for it.  Yet, private school or not, we’re all forced to pay for public schools.

My point is this: the government should be regulating important things, not running them.  Setup ground rules for any investment plan marked as “retirement”.  Set minimum educational requirements for anything calling itself a school.  Then get the hell out of the way.  I’d like to share a couple of personal examples of why government-run health care is a bad, bad idea.

It’s not as great as it sounds.

Growing up military, I know exactly what socialized health care looks like. It means a bad tooth gets pulled instead of a crown. The words “adequate and practical” come to mind. It won’t be the more generous health insurance most are used to, even if most of us complain about our current coverage.

Let’s face it, most of the things we call necessities are actually luxuries.  You can live just fine missing a few teeth.  You don’t need the latest artificial limb from space age composites.  I dare say the top 20% of luxury medical care probably accounts for 80% of healthcare costs today.

It’s not as cheap as it sounds.

I also have a big problem with the government that makes, interprets, and enforces law competing with private business. Once upon a time, I briefly worked as a manager for a county records department. Theory: one unified department could store and digitize county documents (warehouses full) cheaper than each department doing it for themselves. Counties still had the option of hiring private firms, just as people would have the option to choose private OR government health insurance.

We couldn’t compete with private firms because we were paying county employees $30K a year (10 years ago) to literally sit there and push paper through a scanner all day. So the department head would bid a fraction of what it cost us. It didn’t matter to him – we were a government agency, so tax revenue made up the difference. The problem with any “business” that has ready access to tax dollars is that it can charge whatever it wants, and taxpayers pick up the rest. Eventually competitors die, and you no longer have other options.

It’s not as competent as it sounds.

People like to point to high CEO salaries and severances as evidence of corporate corruption.  What those people don’t understand is that if you’re a large corporation, you want the cream of the crop running your company, and there’s high demand for that person who can pilot a company to success.  The severance is necessary, too.  CEO’s put their heads on the chopping block with every decision, and are fired on a dime if stockholders lose confidence.  Would you take a job with such high risk without some promise of security?

Government positions have set pay grades, so it’s a whole different ballpark.  Don’t get me wrong, there are some amazing people in government, and they’re the reason the broken system gives even the appearance of working.  But those people are the exception, and even they have their limits.  Why would you work as an agency director with all the stress of a CEO  for a couple hundred thousand, when you could be a CEO and make millions?  The government simply can’t afford to hire the best candidate for the job.

Don’t be fooled into thinking the government can solve healthcare by taking it over.  It’s never been successful before.  The evidence is there.  I agree our healthcare system is broken, but let’s look to fix the system instead of running home to our collective socialist mother.

The answer.

Chances are, you don’t have insurance.  You have a payment plan for medical services.  Do you get doctor visits and prescriptions for free, or near free?  That’s a payment plan.  You simply have a contract with your coworkers to split the bill evenly, and you’re paying an enormous markup for a company to manage it for you.  Think about it: insurance companies take your premiums, pay the agreed amount on your claims, and have billions left over for overhead and profit.

What you need is a true insurance plan.  You have a high deductible, and a low premium.  You cover most of your medical expenses yourself, averaging far less than what you would have paid an insurance company to pay them on your behalf.  In the event of an unforeseen catastrophe, you pay up to your plan max, and the insurance company covers the rest.  These plans do exist, but the one piece of the puzzle that still makes it tough is the fact that most people have the more socialized version.

Let me explain the industry term Usual, Customary, and Reasonable to you.  When I processed dental claims for a living,  a plan would have percentages it pays out for different services, based on UCR – the typical amount a dentist in that area charges for a service.  Better plans would pay out 90-100% of UCR for a given procedure.  Cheaper plans paid less.

How did we determine UCR?  It’s the average of what dentists in the area are charging for procedures.  As dental insurance became more popular, prices for services went up.  Since prices went up across the board, UCR went up, which means insurance paid dentists more.  Here’s the flaw: every time dentists raise their rates, insurance companies raise what they’ll pay, and pass the cost along to the patients.  The patient never wins in this scenario.

Gradually, individual insurance plans are becoming more affordable.  More people are working mobilly, or on a contract basis, and as this happens traditional employer health coverage will be replaced by plans that meet your specific needs.  Your coverage will no longer be determined by who you work for.  Why should it?

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