More For Less

I tend to view with suspicion any promise that offers to deliver more goods or services for less payment. Sure, that does sometimes happen, but how often do such promises actually deliver?

I favor health care reform, strongly favor it, and I realize that we do not yet know the final details of the reform plan, but I am just a little bit skeptical that the insurance reform that is being discussed is sound even in its basic principle. The government is saying, “we’re going to give you more and it will, eventually, cost less,” without any credible reasons why it will cost less.

Other than, “We’re going to keep the insurance companies honest.” Right.

I actually favor insurance reform, too, and I’m in favor of regulating insurance companies. I’m just skeptical of the claim that it’s going to cost significantly less after we do it.

We’re being told that adding healthy, presently uninsured people to the insured pool will balance out the cost, but all we have is that pure statement in the form of “math without numbers.” I have not heard or read even order-of-magnitude numbers of how that balancing act works out, and I seriously doubt that anyone actually knows. In any case, if that is what’s going to drive the cost down, why does the reform cost $1 trillion more to begin with?

Health insurance is a volatile subject, and people tend to view profits made by insurance companies as evil. Profits made by oil companies are also evil. Profits made by electronics and computer companies, which are orders of magnitude greater than insurance or oil companies, are good. The latest plan to sell the reform is to officially demonize the health insurance companies and their outrageous profits.

Just as a frame of reference, United Health Care, the company that insures me, had a 5% margin of profit last quarter. Yes, the news media is right and their profits “doubled,” up from 2.5% the previous quarter. Awesome. If you sold something for $100 and made a $5 profit, would you feel you were robbing anyone?

Even if we treated the industry as Blue Cross was founded, though, and as the promised “public option” is proposed, as non-profit organizations collecting premiums and delivering service on a break-even basis, there is a direct relationship between the money taken in as premiums and that paid out for services. The idea that the government can increase services and drive down premiums at the same time doesn’t make a lot of sense to me.

As one example, insurance will not be able to turn down preexisting conditions; that’s a good thing, and I’m all for it. If, however, an insurance company is having to accept clients with medical conditions costing hundreds of thousands per year to treat, and cannot charge a higher premium to those clients, what does that do to its overall cost? What does it do to the rest of the premiums it must charge to break even; forget profit? Even that horrible, usurious 5% profit that is so decried by Democrats.

I would be a lot more believing if it was said that this reform was going to cost more but that we need to do it in the name of social justice. That raises the question of whether or not we can afford it.

We could afford it a lot better if we stopped fighting wars, of course.