More About Obamacare?

Column 2017-4 (2/13/17)                              

     In a recent column I considered the nature of insurance
along with what insurance can and cannot do.  Insurance doesn't
reduce losses.  It only provides a means of sharing the losses so
none of the insured individuals have to take a big hit.

     If everyone in the insurance pool doesn't face about the
same risk, those who face greater risks must pay higher
premiums.   Otherwise the low risk individuals will bailout
unless coerced to stay.  It won't work to charge 25 years old
individuals and 85 years old individuals the same premiums for
life insurance.

     Obamacare was designed to defy the basic principles of
insurance.  That is why many people believed Obamacare was
designed to fail.  It was believed to be nothing more than a
stalking horse for the complete government takeover of medical
services.

     The foundation of Obamacare was to force some people
to pay the medical expenses of others.  The prime target was
healthy young people who were to be forced into a herd with
high risk individuals.

     Everyone was to be forced to help pay for preexisting
conditions.  Preexisting conditions can't be covered by real
insurance.  There is no unknown risk to share,  Try buying
tornado insurance after your house is blown away.  See how
many insurers are eager to cover your house's existing condition.

     Preexisting conditions are problems.  Those problems
can't be solved with insurance.  There are only two solutions,
rely on voluntary help or resort to extortion.  Obamacare chose
extortion by requiring everyone to pay or else go without
insurance.

     Many people seem to be pleased when insurance
companies are forced to provide additional coverage.  Politicians
spin it as something they are doing to the "evil" insurance
companies.  In reality those "evil" insurance companies must
raise premiums to pay the added cost.  Mandated coverage is
extortion as far as those who don't need or want the mandated
coverage are concerned.

     Together the federal and state governments mandate 100
or so coverages, all of which make insurance cost more.   All
mandates of coverage should be abolished.   Let individuals
choose the coverage they pay for.

     Employer paid medical coverage is a substantial cause of
high costs.  One size fits all coverage prevents individuals from
having the coverage that fits them best.  Also, not even seeing
the bill for their coverage encourages waste.  Some go to the
emergency room for hangnails and colds.  Services that seem to
be free encourage unnecessary tests and all sorts of waste.

     Instead of trying to get rid of employer provided
coverage, Obamacare tried to force its expansion.  To get rid of
the wasteful employer provided coverage we must level the
playing field tax wise.

     Employer provided coverage is exempt from income and
Social Security taxes.  Pay the same money to the employees so
they can buy insurance and it is subject to both taxes.  To
correct this problem all medical expenses, including insurance,
should be exempt from both taxes.  What employer wouldn't
gladly give his employees raises equal to the cost for medical
coverage, in exchange for being relieved from providing the
coverage?

     I haven't come close to even touching everything that
needs to be done to unravel what government has done to make
medical insurance and services far more costly than need be. 
Until we have individuals price shopping for medical services
and insurance, the problems will live on.

     The cost for most medical services have been rising
toward the stratosphere.  Meanwhile, the cost for plastic surgery,
which usually isn't covered by insurance, has been going down. 
With proper incentives all medical costs can be reduced.  More
freedom and choice, not more government intervention, is the
solution.

aldmccallum@gmail.com
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Copyright 2017
Albert D. McCallum