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In a vote that was held at 1 a.m. Monday, the Senate approved a procedural measure that makes it likely a version of the national healthcare bill will make it into law.
In fact, by taking advantage of an obscure rule that allowed lawmakers to start their day and vote on the measure well before dawn, Senate leaders were able to approve the measure and keep alive the possibility that the healthcare bill will be passed by Christmas.
But if you study the Senate bill carefully - no matter what your political persuasion may be - you have to wonder why they even bothered.
In fact, by taking advantage of an obscure rule that allowed lawmakers to start their day and vote on the measure well before dawn, Senate leaders were able to approve the measure and keep alive the possibility that the healthcare bill will be passed by Christmas.
But if you study the Senate bill carefully - no matter what your political persuasion may be - you have to wonder why they even bothered.
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The bill will significantly increase federal healthcare spending - by about $185 billion in 2019, according to the Congressional Budget Office (CBO). It will involve a substantial increase in taxes - by about $100 billion in 2019. It will compel everyone to buy healthcare, even the young and healthy, which ought to reduce costs.
But the political classes seem to have brought forth a miracle: According to the CBO, the plan will actually increase healthcare premiums for individuals and small business by an average of 10% to 13% in 2016.
The American healthcare system is already the most expensive in the world, at a total cost of nearly 17% of U.S. gross domestic product (GDP). After the better part of a year of effort by the Obama administration and Congress, one would have hoped that one result of this healthcare-system makeover would have been a measurable reduction in costs. Instead, this bill increases it. It's only a modest increase, to be sure. But it's still an increase.
There are three cross-subsidies in the U.S. healthcare system, which greatly increase its cost. Cross-subsidies increase costs because when Party A makes Party B provide a service without paying for it, the service is generally lousy and the cost high.
The first cross-subsidy is the provision of free emergency care facilities for the indigent. If Congress wants to make hospitals provide these services, it should pay for them. Under the current system (which was sneaked in through the small print of a 1,000-page reconciliation bill in 1986), hospitals have to provide the expensive facilities to everybody, and don't get reimbursed for the deadbeats. Needless to say, loaded with these extra costs, hospitals do what comes easiest - they unload those costs onto the middle class. That's about $80 billion a year in extra healthcare that we pay either directly or through higher insurance premiums.
Second, the same service gets charged at three completely different rates - depending on who's paying for it. The lowest rate is paid by the government through Medicare/Medicaid. This means doctors hate taking Medicare patients, which is tough for senior citizens who need healthcare. The middle rate is paid by insurance companies, who negotiate and get volume discounts. The highest rate - and we're talking here about three or four times the insurance company rate - is paid by the middle class, by folks who lack health insurance and by those who have been denied coverage (such as for a "pre-existing" condition).
Needless to say, this grotesque pricing system adds hugely to the costs of healthcare, as everybody devotes huge amounts of time, energy and resources to accessing more-attractive payment methods or to offloading low-rent patients.
Third, there's the cost of the trial lawyers. Here we're talking about roughly 1% of GDP in direct costs, and an additional 2% to 3% that gets spent on unnecessary medical procedures that are undertaken to fend those lawyers off.
We don't expect Congress to solve all these problems, even though previous Congresses were in many cases the major cause. But you'd think a huge healthcare bill - like this one - would be viewed as a real opportunity to fix the system, and to make a dent in those costs.
This bill forces everybody to have healthcare. That brings a lot of young healthy people into the pool, which should reduce rates. It forces companies to cover people with pre-existing conditions, thus cutting out a lot of the insurance games that prevent people from having proper healthcare coverage. That should also reduce costs, as well as reducing healthcare bankruptcies. And it sets up a system of health exchanges, which should allow health-insurance policies to be sold across state lines, creating one large market instead of 50 small ones. This, too, should reduce cost.
And yet, according to the CBO, the bill increases healthcare premiums paid by individual people (as distinct from premiums that are paid by companies through group schemes) by 10% to 13% in 2016. That's on top of the aforementioned $185 billion increase in federal healthcare spending and $100 billion in additional taxes that we'll see in 2019. Then there's also the $100 billion in Medicare savings that won't happen because it involved reducing Medicare reimbursement rates still further.
Can't one expect any economic literacy from our Solons?
The one saving grace is that this mess won't come properly into effect until 2014, so two more Congresses will have the chance to sort it out.
If we hold our breath and try really hard to believe in fairy tales, perhaps one of them will do so.
[ Editor's Note : There's a reason Martin Hutchinson is building a reputation as one of the sharpest prognosticators in the investment world today: He can see things that "the system" is trying to hide from individual investors. Today's analysis of the new U.S. healthcare bill is a case in point: Hutchinson sees the costly pitfalls.
But that same vision allows him to spot the top profit opportunities available to individual investors. And Hutchinson scours the globe in search of the "hyper-profitable" investment plays that he recommends for his Permanent Wealth Investor trading service.
Hutchinson's experience as an international investment banker has taken him to major markets such as Great Britain and the United States - and to smaller ones such as Macedonia. Wherever he traveled, Hutchinson found one fact to be the same: No matter the market's size, he was always able to uncover the most profitable investment opportunities.
In a new report, in fact, Hutchinson not only uncovers the very best profit opportunities available today, he guarantees triple-digit gains. To check out this report - and these new investment picks - please click here.]
News and Related Story Links:
But the political classes seem to have brought forth a miracle: According to the CBO, the plan will actually increase healthcare premiums for individuals and small business by an average of 10% to 13% in 2016.
The American healthcare system is already the most expensive in the world, at a total cost of nearly 17% of U.S. gross domestic product (GDP). After the better part of a year of effort by the Obama administration and Congress, one would have hoped that one result of this healthcare-system makeover would have been a measurable reduction in costs. Instead, this bill increases it. It's only a modest increase, to be sure. But it's still an increase.
There are three cross-subsidies in the U.S. healthcare system, which greatly increase its cost. Cross-subsidies increase costs because when Party A makes Party B provide a service without paying for it, the service is generally lousy and the cost high.
The first cross-subsidy is the provision of free emergency care facilities for the indigent. If Congress wants to make hospitals provide these services, it should pay for them. Under the current system (which was sneaked in through the small print of a 1,000-page reconciliation bill in 1986), hospitals have to provide the expensive facilities to everybody, and don't get reimbursed for the deadbeats. Needless to say, loaded with these extra costs, hospitals do what comes easiest - they unload those costs onto the middle class. That's about $80 billion a year in extra healthcare that we pay either directly or through higher insurance premiums.
Second, the same service gets charged at three completely different rates - depending on who's paying for it. The lowest rate is paid by the government through Medicare/Medicaid. This means doctors hate taking Medicare patients, which is tough for senior citizens who need healthcare. The middle rate is paid by insurance companies, who negotiate and get volume discounts. The highest rate - and we're talking here about three or four times the insurance company rate - is paid by the middle class, by folks who lack health insurance and by those who have been denied coverage (such as for a "pre-existing" condition).
Needless to say, this grotesque pricing system adds hugely to the costs of healthcare, as everybody devotes huge amounts of time, energy and resources to accessing more-attractive payment methods or to offloading low-rent patients.
Third, there's the cost of the trial lawyers. Here we're talking about roughly 1% of GDP in direct costs, and an additional 2% to 3% that gets spent on unnecessary medical procedures that are undertaken to fend those lawyers off.
We don't expect Congress to solve all these problems, even though previous Congresses were in many cases the major cause. But you'd think a huge healthcare bill - like this one - would be viewed as a real opportunity to fix the system, and to make a dent in those costs.
This bill forces everybody to have healthcare. That brings a lot of young healthy people into the pool, which should reduce rates. It forces companies to cover people with pre-existing conditions, thus cutting out a lot of the insurance games that prevent people from having proper healthcare coverage. That should also reduce costs, as well as reducing healthcare bankruptcies. And it sets up a system of health exchanges, which should allow health-insurance policies to be sold across state lines, creating one large market instead of 50 small ones. This, too, should reduce cost.
And yet, according to the CBO, the bill increases healthcare premiums paid by individual people (as distinct from premiums that are paid by companies through group schemes) by 10% to 13% in 2016. That's on top of the aforementioned $185 billion increase in federal healthcare spending and $100 billion in additional taxes that we'll see in 2019. Then there's also the $100 billion in Medicare savings that won't happen because it involved reducing Medicare reimbursement rates still further.
Can't one expect any economic literacy from our Solons?
The one saving grace is that this mess won't come properly into effect until 2014, so two more Congresses will have the chance to sort it out.
If we hold our breath and try really hard to believe in fairy tales, perhaps one of them will do so.
[ Editor's Note : There's a reason Martin Hutchinson is building a reputation as one of the sharpest prognosticators in the investment world today: He can see things that "the system" is trying to hide from individual investors. Today's analysis of the new U.S. healthcare bill is a case in point: Hutchinson sees the costly pitfalls.
But that same vision allows him to spot the top profit opportunities available to individual investors. And Hutchinson scours the globe in search of the "hyper-profitable" investment plays that he recommends for his Permanent Wealth Investor trading service.
Hutchinson's experience as an international investment banker has taken him to major markets such as Great Britain and the United States - and to smaller ones such as Macedonia. Wherever he traveled, Hutchinson found one fact to be the same: No matter the market's size, he was always able to uncover the most profitable investment opportunities.
In a new report, in fact, Hutchinson not only uncovers the very best profit opportunities available today, he guarantees triple-digit gains. To check out this report - and these new investment picks - please click here.]
News and Related Story Links:
- Washington Examiner:
Who's responsible for the Senate's middle-of-the-night vote?
- Congressional Budget Office:
Official Web Site
- Wikipedia:
Solon
- Medical News Today:
What is Medicare/Medicaid?
- MSNBC:
Obama Starts Big Push for Health Care Overhaul
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Tags: GDP, Healthcare, Medicaid, Obamacare, Solon
The bill is totally unconstitutional and treasonous. Those congressmen who voted for any of these items should be tried for treason, convicted and executed.
i vote for that ….
I will volunteer to pull the switch or inject the needle. Just tell me which.
Can you guys not see that all the rangling that went on over the last months actually forced the gov. to make concessions left right and centre to all these behemoth insurance and pharma companies , doctors, surgeons and lawyers……..?
You should be happy though, because if you lose in healthcare costs you can pick it up in shares…You won't lose out but maybe you cannot stand that some humane consideration for basic needs of inopportune sick are turned into a policy. And then you dare call yourselves a"Christian" nation: did Christ not say/and act with the moto of "do unto others as you would like done unto you".
I guess that means since Obama lied to me, I get to lie also.
do you not realise that,as far as social security is concerned, the U.S. is a mere medievial country where only the rich people have some security!
I have often traveled to your country and as a European I have always been thankfull for the huge efforts and sacrifices during the last world war,but please think of this: the wild west is history and guns in every home are no longer needed and in a civilized country every citizen should have acces to healthcare at an affordable cost.
marcel
you talk about ww2 .. if the people had guns in their homes maybe ww2 wouldn't have happened .. ever think of that ? i don't believe that citizens of a country need to be without health care that is why i have paid for mine for over 35 years .. there are some people that don't believe in paying for their on care .. they are the dead beats and want every thing paid for them by someone else … charity starts at home ………
Marcel,
I have to wonder what would have happened to you, your country and your family over the course of the past 100 years, if it had not been for that 'gun toting' America to save your sorry ass along with many other places on this planet. Thank your llucky stars America wasn't a socialist European country during the first half of the twentieth century. If it was, we would have looked the other way while the Huns and the Nazis laid waste to your landscape. Where was your family when the Nazi 6th Army rolled into Paris? My guess is that if every Frenchman had a gun in his home, the Nazis might have thought better of that. But I am missing my point. The very fact that you are anti-gun means you, like much of your nation is pascifist. Just try to imagine the millions and millions of people who have been murdered because of pascivists like yourself. Lastly, our citizens enjoy a 38% better chance of not dying from Cancer than you and your fellow Europeans. I guess as far as health care is concerned, that makes Europe 'a mere medieval country'.
Having recently listened to the US Ambassador to Switzerland, Donald Beyer, it appears that the US likes to copy some of the unreasonal things the Swiss do. All Swiss are obliged under the law to have minimum health insurance (LaMal). We are only allowed to be insured by Swiss companies (we cannot go across the border and get the same coverage for less ie France). The insurance companies have a monopoly on the 7.5 million Swiss residents and premiums continue to go up without any clear justification. Insurance companies are not obliged to open their books to audits. Therefore, in US like in Switzerland, you are forced to be insured at the benefit of the insurers and medical companies, with very little recourse. Best to own stocks in those companies that will reap the benefits, at least you will recuperate something via the dividends. Bonne Chance
Insurance companies are large institutional profit-driven investors. What do you suppose they invest in? Couple the losses in the markets with the fiduciary responsibility to pay claims and just where is the money going to come from? The whole national insurance argument is a hidden bail-out that side-steps the direct taxpayer bailouts of the financials.
We are not being taxed(?), but rather forced to purchase a promise. The result is the same; increase the reserves of the insurance companies that played the game, lost and are now marginally solvent. Why else is it mandatory for everyone? It is a another bail-out.
Putting lipstick on a pig doesn't change a thing. It is still a pig. This is a tax. The citizens are just fearful sheep huddled together waiting for the next fleecing. It is for our own good and the politicos will tell you so.
Can no one see that insurance companies have cerated the currenthealth fiasco? And we (not me) are looking to them to rectify the situation? If we belive that, we are dumber than a rock!
The trial lawyers cost health care and citizens between $80-200 Billion per year. 1% of our GDP!. The US is the most litigious society on earth with more litigation here than all countries combined! In Japan there is 1 lawyer for every 20 enginners. In the US, there is 20 lawyer for every engineer. These trial lawyers advertise more now than car dealers on television. They pay the DEMarixst Party in $100 millions in what amounts to be political bribes. Don't whine to me about insurance companies until you tell me you are going to whine and go after the John Edwards of this country. They are all scum….greedy scum.
Everyone acts as though the health insurance companies have behaved in humane and decent manner. They have not! In fact, the number of people that they have harmed and killed is in the thousands. They have killed more people than all the serial killers combined. This coupled with their CEO's being paid $30 million a year is pathetic. Those that fought to preclude the public option have greatly harmed US citizens. Congress has known that health insurance companies have been harming and ripping people off for more than 30 years. Today if you get sick, health insurance companies do all they can to not pay for your medical claims. Yet campaign money talks louder than what is righteous.
i don't know what insurance you are using but mine has been great .. doctors are the problem .. as far as someone ripping the people off , look at the government .. they have been doing that for over 100 years .. we need to go by the constitution and keep less government intervention out of our lives …
Expecting anything new from the Govt. is like getting the catholic church to admit they harbor pedophiles and when they both do give in a little because of pressure guess who pays.
They have spent a whole year "working(?)" on health insurance reform, that name quickly changed to health care reform and what do we get? A new regulation that is once again only sum of all interest groups.
Here in B C Canada we have a medical system in place where it is compulsory for all to pay, regardless of age, sex or state of health, my wife and I, both retired, pay $102 per month, our combined income is below $2000 per month, we seldom if ever use the system , visits to the chiropractor are not covered by medical , an ambulance trip is only partly covered, but on the bright side, if we really had a lengthy stay in hospital we would not have to mortgage our home to pay the hospital bills, in England, my place of birth, practically everything is covered, it would be interesting to explore their system, I am sure they are not 'taxed to death' in order to enjoy this coverage– Bill
The current bill does have serious flaws, but seems to be the only way to get health care coverage into law. The current system is horrible, and serves those currently insured very well. A large number of people receive no care, are unemployed, may be unfortunate enough to have a chronic disease, such as diabetes, and suffer the ravages of the disease with amputations and early death. My hope is that we will eventually get a single payer system, with controls on lawsuits and the heavy costs to the health they currently incurred. I have practised surgery since 1963, and directly observe that this is the worst climate for providers, and patients. And everyone in the country shoiuld be eligible for health care, regardless of ability to pay. That is what requires higher tases and costs.
I have said this to Bush. I have said this to Obama. It is not healthcare that needs reformed. Healthcare reform by Obama is going to try to make insurance affordable to everyone. (Which it will not!) There is a reason insurance is sky high. First. It is because the price of medication and medical service is jacked up due to greed. The higher the prices, the higher the insurance premiums. An example. $10 for 2 Tylenol in a hospital visit. Price gouging is illegal but it is done in healthcare and they get by with it. What is needed is medical price regulation and lower medicines. If this was done, the prices of health insurance would come down to amounts affordable to the people.
But to force something on the people is not the American way. In any case, to pass this healthcare into law will produce criminals out of law abiding citizens. If I am not mistaken, the constitution forbids the passing of laws that turn law abiding citizens into criminals. Besides. How will the unemployed pay for this? They have no income except unemployment checks and then that will also dry up soon and then they still will not be able to afford it.
The real question that should be asked in this is, "Who is going to make the most profits from it if this healthcare reform is passed?".
Those that accept it will wind up paying more in the long run for their healthcare. Watch the prices of medicines and health services to go up.
One thing I almost forgot. Drug manufacturing companies and hospitals get government grants to develop new medicines and equipment and hospitals get grants to purchase that equipment. So why does it all carry exuberant high prices to patients and insurance companies when grants are not paid back and grants come mainly from the taxes the citizens have paid?
Please see You Tube video titled: "Severely Autistic Boy Beaten by Big Government"
It's an eye opener. Mom takes you inside the crazy system serving disabled and exposes some of the apathetic people we have working in our agencies. Amazing. Shocking. Sad. We need big change with less government right now.
communism? in 2014 it will be the law to have insurance or pay a fine,even though it will start out as small fine, isn't that a form of communism to force people to do that
I think it is a human rights abuse and nauseating to force health care on people, some people may opt for alternative and natural medicine as well as natural health, and it is very wrong to force people to the vilely indecent especially prophylactic examinations of modern health care which have not stopped cancer in a decade, let´s stop imitating Oriental fools with their prophylactic medicine, afterwards they spent the time executing or detaining those physicians, they would not have done it if they were so wonderful
What this article isn't telling you:
The article only tells you half of what's in the CBO prediction for insurance premiums. First, it's important to note that only policies "purchased by individuals" will go up by 2016. If you have health insurance through your employer, your premium will go down by that time. But more importantly, the article fails to mention that government subsidies will make most individually purchased insurance premiums *go down by 56-59%* in that year. Go ahead and argue that's socialism if you prefer to be free to continue paying more.
LGF, wake up — do you seriously believe premiums will be going DOWN on any front??? Wow — naive ignorant cattle like you are what's allowing our government to railroad the masses and drive our freedom into the ground. How terrifying. Absolutely pathetic.
I am under medical care for a broken ankle and a prostate cancer radiation program. My health insurance is paying the bill and medicare is picking up some costs too so good for all concerned. But the Obama health care program will not cut costs, will not cover medical needs, fewer doctors, med techs, medicians etc will spin supply and demand into the ground for the consumer, see England, Canada and other European nations, the demand goes up the supply goes down, and economic fact from Econ 101. Sweden is going back to private practice slow but sure. Canada comes to the U.S. for care so why can't the Congress listen to the people a majority in many polls say no, say repeal. start over. The people should write the health care program not politicans. Local write their ideas sent to state sent to national meeting and finally give to Congress and allow them to shape but not amend the meaning and procedures written, the people will pay so they should write program they will suffer under it otherwise. The people should rule and the Congress and President should listen.