Ravengate
Partners - Stock market, economic and political commentary by Patricia Chadwick

Dear Republican Members of the U.S. House and Senate:

In the matter of the Health Care Act that President Trump is attempting to amend (or should I say upend), I appeal to your sense of what is just, fair and honorable, by urging that you refuse to vote for any bill that allows pre-existing conditions to stand in the way of a person’s ability to obtain health care for the same premium as a more fortunate person who hasn’t had to deal with the suffering and anxiety that one faces with such illness.

This matter may not resonate with you, as Federal Government employees are provided (by the taxpayers) a level of health care that far exceeds what you yourselves have termed a “Cadillac plan.” You, your families and your employees never have to worry about pre-existing conditions. Your health care plan is the envy of all Americans.

But under the ACA plan now in existence, you developed the term “Cadillac plan,” which you applied to comprehensive health care plans provided by corporate America to its employees. You chose to apply a hefty 40% excise tax on those plans, the logic being that such a tax would help to fund insurance for those who were uninsured.

But you forgot to take economics into consideration by neglecting to realize that corporations would respond (and did) in a rational way, by cutting benefits to their employees and guaranteeing that their plans no longer could be deemed “Cadillac” in nature. The winners in that decision were the employers, who cut back the range of options to their employees and thus saved money; not to mention the insurance companies, whose obligations were now reduced. The only losers were the employees who had to pay higher premiums and receive fewer benefits. And the Federal Government was also a loser because, even after imposing this ill-conceived change, it failed to collect the revenue stream that was its sole justification.

Despite the decapitation of “Cadillac” plans in the corporate world, employees of most sizable companies in this country still retain the benefit of health insurance regardless of pre-existing conditions. The reasons are varied — some companies are truly good stewards of their employees and are motivated by what is the honorable way to treat their workers; other companies realize that they cannot retain top talent without such a crucial benefit, and so they add it reluctantly.

Whatever the reasoning behind providing a comprehensive corporate health care plan, the outcome is favorable because good coverage largely relieves the debilitating anxiety that reduces productivity.

Who, then, will be harmed by the current administration’s attempt to pass the all-important “pre-existing” conditions decision to the states?

Not the Federal Government employees and their families; not likely the significant part of the workforce that is employed by large corporations. No — they are safe.

It is a far larger population, including the millions of self-employed and the owners of small businesses with a few employees, collectively termed “the individual market,” that will be devastated by this change. Many of these hard-working people exist barely above the poverty level. Recall that for decades we have been describing these stalwart citizens as the engines of growth, risk takers, originators and sustainers of myriad small enterprises that add disproportionately to our national GDP.

If the Federal Government allows the states to define and determine eligibility, many of these workers could be refused medical treatment if they were once attacked by the zika virus, or if a member of their family has ever had cancer, or Lyme disease or maybe even a Caesarean birth. For sure, it will eliminate those who are HIV+ or have hepatitis C, an increasingly common and deadly silent disease that affects 3% of the 76 million baby boomers in this country, and is curable only in those instances where the sufferer can afford the huge expense of the required medication. Stated bluntly, without insurance that covers pre-existing conditions, millions of American workers are at risk of losing their lives, many through no fault of their own.

Just yesterday, Centers for Disease Control and Prevention (CDC) designated May 19 as National Hepatitis Testing Day, as it announced that more than 60% of liver cancer cases are related to Hepatitis B or Hepatitis C. That’s because the disease can be harbored within the patient long before it is diagnosed, in some cases as long as 15 years.

There is much to fix in the ACA (Obamacare) but handing over to the states the right to determine whether pre-existing conditions will be allowed to the citizens in their jurisdiction is de facto a death sentence on many thousands of people currently protected under the ACA.

On behalf of the millions of people who have as much right to a healthy life as those of us who are more advantaged, I implore you to hold intact the current pre-existing condition benefit in the ACA. To do otherwise would be a moral outrage, a wanton disregard of the value of human life. Thank you for taking this issue to heart.

© Copyright 2015 Patricia W. Chadwick

Believe it or not, there is some good news regarding health care reform. Legislators, employers and employees are actually in agreement on a number of important issues facing the industry. If only both political parties in our legislature could come together to implement changes that are not controversial, perhaps the remaining disagreeable items could be tackled later.
From all my conversations, it appears that there is nearly universal consensus supporting the elimination of pre-existing conditions, which are deemed unfair and basically un-American. The notion that a pre-existing condition could disqualify one from insurance coverage is not only grotesquely unfair, but it stands notionally to thwart one of the most powerful economic forces in the U.S. economic system, namely the mobility of labor. People in this country willingly move from company to company in an effort to advance their careers, and the existence of a pre-existing condition clause that pertains not simply to the employee but to any member of the family has the effect of tethering an otherwise upwardly mobile worker to inferior conditions.
Secondly, there seems little reason not to allow health insurance companies to compete across state lines. In the personal property insurance market, the practice has existed for over a century. One can go shopping for automobile, home, marine, motorcycle and liability insurance coverage from a host of separate insurance carriers. In fact, there are websites that help one to navigate the vast array of coverage options and there are companies in the business of finding the coverage that best suits individual needs. So why not with health care? If in Connecticut (where I live) the number of health insurers were to increase from the three available today to ten or twelve, I’m inclined to think that premiums might even decline, instead of endlessly rising.
Tort reform may not be an issue that many of our legislators want to tackle, but their constituents most assuredly want them to do so. Even President Obama has fired a shot across the bow of the Congress by admitting that tort reform is necessary. Almost everyone I know can give examples of doctors engaging in the practice of defensive medicine to reduce the likelihood of being sued. It is a hugely costly tariff of sorts, far more expensive than the ‘extra five percent’ that is bandied about.
Somehow I have to think that if one pooled together hundreds of small companies that individually do not have enough employees to provide the diversified risk that an insurance company needs to underwrite, one could generate a large enough population – say 50,000 – to be attractive to underwriters. It seems so simple a notion that I cannot fathom why it can’t be done. Admittedly, many health insurance companies today are not truly providing insurance. Rather they are acting as facilitators for large corporations and managing an insurance budget predetermined by the employer. But I believe that a pool of any randomly selected twenty, or thirty or forty thousand people could provide good insurance characteristics.
One of the legislated changes in the current health care reform law is the requirement for companies to adopt electronic recordkeeping. Many companies were already engaged in making the shift from paper to electronics. The requirement to do so will improve productivity, will reduce costly and risky errors and will allow for improved health care.
The above set of issues don’t seem to be controversial – except for legislators’ anxiety about losing funding from the all-powerful lawyers’ lobby if they enact tort reform. So I say, “Let’s get a move on, Congress.” The President has admitted that things need to be changed in the current law. Use it as an opportunity to improve competition and productivity and let the private sector do what it does best, namely compete on price.
The issue of the many other people who remain without insurance will not go away. But somehow I find it counterintuitive to entrust the Federal Government with the oversight of millions more insureds when it is experiencing close to $100 billion annually in Medicare fraud. If Medicare were a private company, I can assure you its fraud rate would preclude it from winning a federal contract. I say, “Clean house, eliminate the fraud, prove you can run your existing book of business effectively and honestly, and then maybe there is logic to expanding your contract.”

Patricia W Chadwick
February 22, 2011

Reading Betsy McCaughey’s op-ed article in today’s Wall Street Journal, I understand fully why the elderly are so scared about the possibility of a nationalized health care system. I believe it is must reading for everyone. You can read it by going to www.wallstreetjournal.com and then clicking on OPINIONS. Please do so.

Dr. McCaughey knows a great deal about health care and has spent the last five years as the Chairman and CEO of RID, an organization which is dedicated to the prevention of hospital-acquired infections. As a point of clarification, her doctoral degree is not in medicine, but is a Ph. D. in constitutional history.

The advice that President Obama is receiving from his health adviser, Dr. Ezekiel Emanuel, is scary stuff. Given that Dr. Emanuel is the brother of the White House Chief of Staff, Rahm Emanuel, one can only assume that he is more than a figurehead. Importantly, Dr. McCaughey provides numerous quotes from Dr. Emanuel’s writings. If I were in my 70s (and I am not THAT far away), I would be bombarding my Senator and Congressman with emails and phone calls.

I hope that Dr. Emanuel provides a response to Dr. McCaughey’s piece. I for sure will read it.

Remember 1993 and health care? It was doomed because Americans did not want Big Government running one more part of their lives. Why? Because Government doesn’t do things very well – it’s as simple as that.

They – the Government – euphemistically refer to its proposed health care plan as simply one option in the public/private marketplace. But we – the people – know what that plan really is. It is socialized medicine.

(more…)

Just two days ago, the New York Times heralded on its front page “Health Care Bill Passes First Test on Capital Hill”, a title that belied the fact that the health care bill as currently structured has almost no likelihood of becoming law. Moderate Democrat Senators have no stomach for it, because their constituencies have no stomach for it.

This morning’s Wall Street Journal’s front page headline signals the more likely path for the bill “Budget Blow for Health Plan”, a story that the New York Times has relegated to page 12 (page 3 of the National news section of the paper). When the Director of the Congressional Budget Office (CBO) contradicts the statements of Congressmen/women and Senators, trouble is brewing, and that is exactly what Douglas Elmendorf has done.

(more…)

The Obama Administration’s aggressive and seemingly frantic pressure to get a health care bill passed over the next few weeks (a virtual impossibility) brings back memories of sixteen years ago, in 1993 when the newly inaugurated Clinton Administration tried exactly the same thing. And it was that very aggressiveness on the part of (most particularly) Hilary Clinton that (thankfully) ultimately doomed the project. I predict the same thing will happen again in 2009.

(more…)