Evil Insurance Companies

The other day a friend of mine posted this story on facebook.

I find the way that some proponents of the health care bill use insurance companies as a straw man to be a bit interesting.

For example, in the article that I linked to earlier, a young man got sick, eventually used up his 2 million dollar cap and was denied future coverage, then died. An unfortunate story for sure, but my question is not regarding the tragedy his situation, but the way it and stories like it are used as an argument for the health care reform bill. In this case, it wasn't the insurance companies fault that the young man died, it was nobody's fault. The family had coverage up to 2 million dollars, but use up all that funding before treatment was successful. Getting angry at the insurance company for stopping payments once you've maxed your benefit is akin to being angry at the life insurance company because it only paid out the $100,000 your spouse signed up for even though you still have bills. It just isn't valid. Unfortunate, but invalid.

Insurance companies in general should not be demonized for what they do. If anything they should be applauded. For example, my family of four has high deductible health insurance that costs us around $500 / month. My employer pays the first $190, so I pay just over $300 / month. In a worst case scenario, my family would be obligated to pay the first $5,000 and then 20% of all remaining bills each year until we have paid $11,000 each year until our lifetime cap of $5,000,000 was reached. In a hypothetical situation where somebody contracted an illness that gave us bills totaling $50,000 / year (not that far-fetched), we would pay around $4,000 in premiums and another $11,000 in bills each year in exchange for $39,000 / year of payments by the insurance company. I don't think I'll even make $50,000 this year, so the possibility of finding that much money laying around each year is slim.

Insurance companies provide a means for people to pay for emergency expenses that they otherwise couldn't afford. It's a transfer of risk. Without an insurance company, many of us would be unable to afford some of the treatments /medications that we need. However, in order for a premium to be established, a maximum payout needs to be established as well. The higher the maximum payout, the higher the premium. An unlimited payout (as the reform bill requires) would require much higher premiums. We can't have our cake and eat it, too.

Other stories that attack insurance companies talk about individuals who are already sick and can't get affordable coverage. It is an unfortunate truth that if you are already sick, then nobody will insure you at the same rate as a healthy guy. The Oracle of Omaha once said that he would insure anybody no matter the risk so long as they were willing to pay a high enough premium. As I said earlier, insurance is a transferral of risk. If the risk is more definite (you're already sick), then you'll end up paying more. The point of insuring oneself is to purchase it before you need it.

The fact of the matter is that the insurance companies are being used as a straw man to get people emotional over the "crisis" at hand. If proponents of the legislation can get enough people angry at insurance companies with their pathos-based rhetoric, then they might get enough people stirred up to do something. Many pathos-based arguments require an antagonist. If we remember, it wasn't insurance companies who were the bad guy first. It was the evil doctors who would cut off your leg or take your tonsils out because it paid better. But since that line didn't poll too well, it's the insurance companies that are out to get you now. Pathos works well over the short term, but not as well over the long term. That may be why we see President Obama running around right now trying to drum up support for legislation that has already passed. He got people riled up enough about it feel justified about the bill's passage, but finds his support waning.

By defending the insurance companies in general, I am in no way defending all of their practices. Though I believe that as a whole the health insurance industry should be applauded, there are some practices that occur that disturb me. Ask any capitalist and they'll tell you that some regulation is necessary. That said, here are some things that I believe need to be addressed with insurance companies. Dropping people as soon as they get sick is one aspect that must be addressed. Another would be hiking rates as soon as a person gets sick. At the minimum, an insurance company should keep your rate as it is until the your term is up (usually annually).

That said, here are some things I would propose if I were to sponsor a health care reform bill (yes I know some are already suggested):

Allow insurance companies to offer their services across state lines:

One of the ways to reduce cost would be to allow more competitors in a single marketplace. Simply letting the free market do what it does best would help to reduce cost.

Increase tax credits for medical expenses:

Allowing individuals to reclaim a larger portion of their medical expenses in the form of tax credits would reduce the felt cost.

Increase the maximum contribution limit for HSA accounts and broaden their approved uses:

HSA accounts are tax deductible savings accounts that accompany a high deductible insurance program. It's not the account as much as the high deductible plan that it accompanies that is a great solution; however, increasing the maximum annual contribution limit would make them more desirable. The current health care reform restricts the use of the account. Restricting their use is only a gimmick to limit tax deductions.

Educate about prepay options:

Too few are aware of the options that are available to them through prepaid medical expenses and high deductible health insurance plans. Prepaying for anticipated medical expenses can save consumers quite a bit of money.

Educate about HDHPs:

High deductible health insurance plans enable consumers to obtain health insurance at a lower premium. This is done by requiring the consumer to pay for more of his initial medical expenses out of pocket. This simple plan can help to reduce the direct cost of health care

to the consumer

by dissuading consumers from going to the doctor for every little case of the sniffles. Directly paying for more medical expenses also helps the cost of care self-reduce because consumers who pay for more upfront will shop clinics and hospitals until they find one that charges less. (Capitalism at work)

TORT reform:

The amount of preventative medicine that a doctor performs because he is either afraid of a lawsuit or his liability insurance requires it has a wearing cost on health care. I'm not a fan of caps on payouts for lawsuits (how can you put a dollar figure on pain and suffering). But I am a fan of loser pays. Just knowing you'll pay the legal bills for yourself and the guy you're suing if your lawsuit doesn't stick will reduce the number of frivolous suits.

Expand who qualifies for group plans:

Allow families, churches, and other organizations to form organizations that can apply for group coverage just like a business can. That way losing your job doesn't mean losing your health insurance.

State safety nets:

States should also be encouraged to research and experiment with "safety nets" for those who are high-risk / un-insurable. If a few states each experiment with different methods, perhaps we can find some workable solutions without too much negative impact to the nation as a whole from the experiments that didn't work as well.

Many things, in addition to what I mentioned above, are low(er) cost ideas that can be implemented to reduce the cost of health care. As smart as I think I am, I'm sure that the ideas on my list are not solely my invention. I'm also certain that the proponents of the health care bill know that the options I mentioned above would help reduce the cost of health care. So why aren't they enacting them?

I can only think of one reason. The designers of the health care bill don't want to make health care more affordable. At least, that's not their first priority. They want to be in charge of health care. The current bill is quite simply a tool to drive insurance companies out of business and will act as a funnel to government run health care. A bill that does nothing to actually reduce the cost of health care while requiring an insurance company to insure the un-insurable, insure everybody to an infinite sum, and pay for care without obligation from the consumer while providing "oversight" of premium increases says wrecking ball to me.

What is wealthy?

What does it mean to be wealthy? Obama seems to think that a guy who makes over $250,000 is wealthy. Obviously, if I made $250,000/year I'd be wealthier than I am now, but would I be "wealthy"? I say not necessarily. Here's why:

Who are the people who earn over $250,000/year? I don't know the exact number, but quite a large number of these are small business owners. Most of these guys either own their business through a sole proprietorship or an LLC. Both of these are pass-through entities. In other words, they're legal fiction. Every penny of the $250,000 in net profit that Joe's Muffin Shack makes is considered a penny that Joe made. The fact that Washington ignores and wants us to overlook is that if Joe is smart, he'll not pay himself the full quarter mil his business "made".

I sell building materials to a network of dealers. These guys are almost all self-made men and small business owners. They also are scared of having their taxes increased. Why? Because if my customer wants to stay in business, he'll reinvest every red cent he can back into his business. These guys don't have a guaranteed paycheck. So when they have a good year they'll upgrade their equipment, invest in advertising, purchase some materials, or simply hang on to that money for when a bad year comes along.

A business is a constantly moving and changing thing, just because a business may have $250,000 or more in profits (dirty word) on the last day of a given fiscal year does not mean that it won't be in the red in a couple of months. In a business, every penny counts.

So when our politicians say only the richest in America will see a tax increase when it allows some Bush tax cuts to expire, what I hear is that many business owners will have less money to reinvest in their businesses and will, therefore, tighten their budgets. A business with a tighter budget will either cut wages, lay people off, reduce hours, raise prices, hesitate to hire new employees, or worst of all, simply close shop.

Granted, a small tax increase won't result in mass closures, but when the government says it needs the money, I can't help but wonder if it really needs Joe's Muffin Shack's money more than Joe does.

Perhaps our government should focus more on increasing its own budgetary IQ and on trying to work within its existing revenues instead of trying to find ways to increase revenue to itself in order to compensate for its budgetary incompetence. After all, it's [growing] the economy, stupid, not growing revenues to the government that will pull us out of this recession.

Lest We Forget

It was 7:50 AM. I remember stepping out of my Health and Wellness distance ed class like it was going to be any other day. I didn't make it a step before my friend Kendall came rushing up to me. "Somebody flew a plane into the Twin Towers!" He screamed at me, face flush with panic. I really had no idea what he had just said. I heard the words, but the meaning just didn't register.

"The World Trade Center, New York! Did you hear me?!" he shouted. It finally clicked. "What kind of plane?" I asked. He ignored my question and just shouted, "Come on!"

We went to our first period classroom where there was a TV and simply stared. We got there just in time to watch the first tower fall. I remember a distinct sinking feeling in my gut. I realized what this meant for me. My friend Jarom and I had enlisted in the Army just 34 days earlier. I remember thinking to myself, "Here we go." I was young, but not stupid. I knew that this day marked the beginning of something big for our nation. For the remainder of the day I just moved from classroom to classroom and watched replay after replay of the terrible events of that morning.

I remember listening to news broadcasts about the heroism of the passengers on Flight 93. I would like to think that I would have been one of those brave souls who rushed the cockpit if I had been on board. What an act of heroism. An entire group of passengers that gave their lives willingly to prevent the intended attack. I have no doubt that once they had spoken on their cell phones with their families that they knew they were going to die that day. But that didn't take away their ability to do something.

I remember the images of firefighters rushing into the towers that day while thousands of people were running away. These men took no thought for their safety that day. They did what they knew they had to do. The men and women that these heroes pulled out of the buildings will forever hold their memory close to their hearts. I'm sure that these men, if they knew what was about to happen, would only rush into those buildings even faster in an attempt to get out more survivors.

Heroism under fire is how I choose to describe the events of that day. It was the day we all reached deep within ourselves and realized that we had a higher purpose than to simply live within our shells. It was the day that we were forced to acknowledge the genuine reality of the threat that extremism presented us. It was the day that we all decided to do something about it.

After 9/11, military recruiting soared. Thousands of young men and women decided to act. They knew they would be putting their lives in real danger, but they knew they had to do something. Men and women all over our country grew closer together. For a while, we felt more like a unified nation than we ever had or likely ever will.

Unfortunately, those feelings fade. And, worse yet, I hear people say they wish they could just forget. I too occasionally wish I could just will the memory of that day from my memory, but we can't, and must not. The day we forget is the day we dishonor all the heroes who gave their lives to save so many on that fateful day. The moment we forget is the moment we dishonor all the men and women who have forsaken loved ones to toil in sweat and blood in a land they don't know to defend our liberties from a terrible foe. When we forget, we forget who we are. And we forget what monsters man can become.

In the summer of 2008 I was privileged enough to spend a few hours in the Asymmetric Warfare Group's office in Jalalabad, Afghanistan. You will never meet a group of more focused, more patriotic men than these. On the front wall of their office, just above the monitors and message boards is written in enormous lettering:

Today is September 12, 2001.

I hope we can live every day like it is September 12, 2001.

Mosques, Qu'rans, and Teflon Men

The debate over the ground zero mosque and the controversy with the idiot who decided to make 9/11 the unofficial "National Burn a Qu'ran Day" has brought some tensions and formerly suppressed issues to our nation's attention. We are caught in a debate concerning the proper way to handle relations with a religion that has a militant and radical offshoot that is conducting all out war against us.

Personally, I believe that the debate will be good for us in the long run. It is important for us to actually confront the social issues before us and find a way to deal with them rather than ignore them and let them fester. The issue I see forming is that many politicians, particularly those on the far left, tend to see these issues as a hassle and just want them to go away.

The ground zero mosque has shown some of the true colors of many of the citizens of this nation. From the man on the street to the men on the hill, just about everybody has made their opinion known on the issue (including this guy). The problem is that many politicians won't actually confront the real issue. David Axelrod and Michael Bloomberg are particularly good (or bad) at this.

While giving a speech about the ground zero mosque, Bloomberg said, "The simple fact is, this building is private property, and the owners have a right to use the building as a house of worship, and the government has no right whatsoever to deny that right. And if it were tried, the courts would almost certainly strike it down as a violation of the U.S. Constitution." (http://www.nydailynews.com/blogs/dailypolitics/2010/08/bloomberg-stands-up-for-mosque.html)

David Axelrod also made a similar statement without actually saying anything when he encouraged President Obama to defend the mosque when he was speaking to middle eastern leaders. Concerning President Obama's remarks, Axelrod said, “It makes me uncomfortable when government starts deciding which religions can build and which can't. It makes me uncomfortable when we stigmatize a particular faith. That's not what America is all about.” (http://hamptonroads.com/2010/08/obamas-mosque-moment-frustrates-dems)

Now the contrast:

Yesterday, Michael Bloomberg said, "I happen to think that it is distasteful...But the First Amendment protects everybody, and you can't say that we're going to apply the First Amendment to only those cases where we are in agreement." He then added, "If you want to be able to say what you want to say when the time comes that you want to say it, you have to defend others no matter how much you disagree with them." (http://www.cbsnews.com/8301-503544_162-20015823-503544.html?tag=contentMain;contentBody)

Axelrod told CNN reporters, "The reverend may have the right to do what he's doing but it's not right. It's not consistent with our values ... I hope that his conscience and his good sense will take hold." (http://www2.tbo.com/content/2010/sep/08/081504/fla-minister-quran-burning-still-planned/)

Did you see the contrast? I wasn't sure at first, so I had to do some poking around to be sure I saw what I thought I did. Have you figured it out yet? If so, congratulations. If not, I'll lay it out for you:

In both cases, the guys rush to assert the constitutional right of the party in question. Imam Rauf does have a right to build his community center. Rev. Jones also would be acting within his rights if he did burn the Qu'ran. All okay so far.

Here's the problem - When it's a crazy white Christian guy, the left has no problem saying it's wrong. They say it's his right to burn the Qu'ran, but it's innapropriate or "distasteful' or "not consistent with our values". But when an Imam wants to build a mosque a stone's throw from where radical Muslims slaughtered nearly 3,000 Americans, they simply assert his right to do so. No statement on the wisdom of the decision. Nothing.

Common sense conservatives (I would like to consider myself as such) have been saying this all along. As I said earlier concerning the mosque, "I feel it's a slap in the face to the citizens of New York and to Americans in general....It's just plain bad form...However, from a legal / political standpoint, I don't see a problem with it." (http://conservative-conversation.blogspot.com/2010/08/mosque-at-ground-zero.html)

Axelrod and Bloomberg focus on the right of the Imam instead of focusing on the issue of its wisdom. Well, here's a news flash: Every third grader and his dog knows Imam Rauf has a right to build his community center. That's not the issue. The issue is whether it's a smart and proper move.

Yet they refuse to take a moral stand on the mosque issue. So why are Axelrod and Bloomberg willing to take a stand against the book burning reverend but won't give an opinion on the mosque? As I see it, there are three possible reasons.

1 - They don't want to offend their base and lose votes for themselves or their bosses.

Liberals are by nature underdogs. They're always seeking an "oppressed minority" to pit against the "machine". Perhaps they just can't resist rooting for the poor Muslim who just wants a community center while bashing the stupid Christian.

2 - They equivocate law with values, and therefore really have no value system of their own.

When we forget what is right and only focus on rights, we have forgotten ourselves. Living strictly by the letter of the law is dangerous, as the law is indiscriminate and sees not intention or wisdom. In other words, just because it's legal doesn't make it good. If we equivocate legal with right, then we are no longer good at heart.

3 - They're cowards who are afraid of offending any Muslim.

This may be the most dangerous option. When we refuse to identify a threat as such and confront and deal with it, then it is only a matter of time before we expose ourselves to that danger. I fear that Bloomberg and Axelrod's policy is to skirt around the mosque issue as a way of avoiding the possibility of offending some radical offshoot of Islam. That is simply ignoring a problem and kicking the can down the road for somebody else to deal with. Clinton did that. We all remember how that worked out.

So which is it guys? Are you trying to pit Americans against each other in order to win votes, valueless, or cowards? I tend to think you're a bit of all three.