Tuesday, December 29, 2009

Obamacare and Bernie Madoff

December 29, 2009

Obamacare and Bernie Madoff

Sorry again about another healthcare reform related newsletter, but I get mildly agitated when people not in the healthcare field, especially politicians, try to tell me how to do my job.

We all have heard about Bernie Madoff, and his, how can I say it, not exactly stellar accounting. Bernie Madoff by way of his ponzi scheme, led what may soon be known as the second biggest swindle in the nation. The first will be either the Senates or House of Representatives healthcare reform bills, which if either of them becomes law, will forever be known as the ObaMadoff healthcare plan.

Understand that our politicians do not play by the same rules that ordinary citizens abide by. We put money in the bank, and can only withdrawal what we have. On the other hand, our politicians, both democrat and republican, spend our money, and more than we have.

Oh, but they can raise more money to pay for all their pet programs you say.

You are correct.

But the politicians do not earn money like we do. They raise money in a few ways.

1) They increase the taxes we have to pay.
2) They borrow money from other countries and ask we, the taxpayers to pay the interest.
3) They turn on the printing presses and print more money, diluting the worth of the dollar and making our money less valuable.

In other words, they spend our hard earned money like there is a never-ending supply!

So what does this have to do with healthcare?

I'll tell you.

Our country is deep in debt, due to all the money spent by our politicians over the past four decades. At last count, our country is over 12 trillion dollars in debt, not counting current and future entitlement obligations. So now, our politicians want us to go further in debt and add a new entitlement to reform the healthcare system, and they will raise the money to finance these reforms in the three ways mentioned above.

So how does this differ from what you and I do to access healthcare?

1) To pay for healthcare, we as individuals have to work and earn income. We can not collect tax money from others to pay for our care.
2) We can borrow money from banks and credit cards, but we are held individually responsible for our debt. Our politicians are not responsible for the debt they place our country in. We are, along with our children and grandchildren.
3) I think we would go to jail if we had a printing press printing money we did not earn. So why does our government get away with it?

This healthcare reform is not the change we believed we were getting during the 2008 presidential campaign. Let us take a look at the president's healthcare campaign promises and how they have changed by looking at the present healthcare bills, their costs and how they are paid for.

House Bill:

Who is covered?

It is estimated that about 94% of legal residents under the age of 65 will be covered. Presently about 83% are covered. There will still be about 24 million people under the age of 65 not insured, with an estimated 8 million of those being illegal immigrants.

Cost: 871 Billion dollars over ten years. That is $871,000,000,000 dollars. That's alot of zeroes.

How It's Paid For:

Fees or taxes on the following: Insurance companies, pharmaceutical manufacturers, medical device manufacturers, medicare payroll tax increase on income over $200,000 for individuals, or $250,000 for couples, 10% sales tax on tanning salons, excise tax on high cost insurance plans, and fees for employers whose workers receive government subsidies. I am certain there are more fees and taxes still hidden in the bill that have not yet been discovered.

Cuts to Medicare and Medicaid

Fines on people who fail to purchase coverage.

Senate Bill:

Who is covered?

About 96% of legal residents under the age of 65, leaving an estimated 18 million people under the age of 65 not insured, with an estimated 8 million of those being illegal immigrants.

Cost: 1.2 trillion dollars over 10 years. That is $1,200,000,000,000 dollars. That's even more zeroes.

How It's Paid For:

Taxes on the following: New income taxes on single people making more than $500,000/year and couples making more than $1 million dollars a year, an estimated $20 billion from new taxes on medical device makers, limiting contributions to flexible healthcare spending accounts. As with the House bill, I am certain there are more fees and taxes still hidden in the bill that have not yet been discovered.

Cuts of more than $400 Billion to Medicare and Medicaid.

Fines on individuals and employers who do not obtain health insurance coverage.


OK, so that is a synopsis, and definitely not the whole enchilada. But let me start breaking this down to what it means for you and how it differs from the 2008 promises made by the president during the 2008 presidential election campaign.

Promise #1 : No Individual Mandate

In both of the above bills, there is an individual mandate for insurance coverage or a fine is imposed. And as we still do not know the extent of government subsidies to help purchase insurance, it appears that many individuals will be coerced or forced by the government to purchase coverage that they may not want, or face the wrath of government fines. In essence, the government wants to pass a law forcing individuals to purchase something against their will.

Promise #2 : Complete Transparency

Need I actually go into this one?
Candidate Obama promised that health care deliberations with Congress and special interests would be transparent to the extreme. To quote candidate Obama: "That's what I will do in bringing all parties together, not negotiating behind closed doors, but bringing all parties together, and broadcasting those negotiations on C-SPAN so that the American people can see what the choices are," Mr. Obama said during his Jan. 31, 2008 debate with Clinton. "Because part of what we have to do is enlist the American people in this process. And overcoming the special interests and the lobbyists who -- Senator Clinton is right. They will resist anything that we try to do."


I had my TIVO set up as a season pass to record all healthcare negotiations on C-SPAN. Funny thing. Nothing recorded. I called TIVO and asked what the problem was with their service. I found out it was not TIVO. There were not any negotiations broadcast on C-SPAN.

So what actually occured?

Politics as usual, but on steroids. Both bills have been written along party lines, with mucho mucho special interests involved. These special interests do not represent you. They represent their corporations and their businesses. Now in a free market capitalistic economy, that is fair game. But were'nt we promised transparency and an overcoming of the special interests???

Promise #3 : Lower Premiums by $2,500 for a Family of Four

For this one, I'll believe it when I see it. I am pretty good at math, but not an accountant or mathematician. But to add 20-30 million more people into health insurance, and at the same time lower the cost of insurance premiums, you need to be a magician, not a mathematician.

Now back to who is covered, the cost and how it is paid for.

If we go midway between both the House and Senate bills, we will still be left with about 14 million uninsured, at a cost of over a trillion dollars over ten years, paid for by cuts to Medicare and Medicaid and large taxes on many segments of the healthcare industry and individuals. The healthcare industry segments will end up passing along the increased taxes as higher costs to you. As employers and individuals, who, unlike the federal government can not print money, will pay higher taxes, and they will have less money in their budgets to expand their businesses and hire more workers. So the trickle down effect of higher taxes ends up costing everyone, not just those who pay the taxes, while still leaving about 20 million people uninsured.

Question 1: If you are unemployed, do you prefer being forced to purchase health insurance, or do you prefer to get help finding a job?

Question 2: With cuts to Medicare and Medicaid, and more people enrolled in these programs, how do we improve care for individuals with these two government plans?

Now, I will attempt to do some math.

Assuming midway between the House and Senate plan, we add 34 million people to the health insurance rolls. The taxes and fines start in year one, while the insurance coverage does not start until years 4 through 6. I will estimate 6 years of insurance coverage for 34 million people at a cost of 1 trillion dollars. That comes out to about $5,000 per year for insurance coverage for each individual, or just under $420 per month. The premiums I pay now are much less than that, and I am not mandated by any government to purchase it!

Question 3: Is the healthcare reform debate about doing what is right, or more about politics?

I'll let you answer that one.

Call your Senator and congressmen and tell them to put a halt to this healthcare reform debacle before it is too late. The legislation currently before Congress was crafted more out of political desperation and not the needs and desires of the large majority of the American people.

One thing I have learned from this debate is that elections do mean something and they do have consequences. Sometimes good, sometimes not.

My hope is that these reforms get stopped, and we reboot the debate and start over. First step, follow the president's campaign guidelines for reforming the healthcare system with true transparency, and a lack of special interests at the table. The table should consists of patient's and healthcare providers and the reforms should focus on individuals and not politics. We can then reform the system one step at a time and move in a direction that helps everyone without adding any costs to the system.

I also truly, truly hope this debate ends so I can spend more time on medically relevant newsletter topics instead of the machinations of our politicians in Washington, D.C.
I previously wrote about a big conflict of interest concerning the American Medical Association and the current healthcare reforms. A recent Chicago tribune column goes into further detail corroborating my views.
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To Good Health!

Steven Horvitz, D.O.
Board Certified Family Practice
Founder of The Institute For Medical Wellness
128 Borton Landing Road, Suite Two
Moorestown, NJ 08057
Phone 856-231-0590
Fax 856-294-0311
Previous newsletters can be found at http://drhorvitz.blogspot.com/

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