The fundamental principle of “insurance” is sharing risk across a “risk pool.” The larger the pool, the more the risk is shared and premiums are lower; the smaller the pool, the greater the risk and premiums are higher. Risk pooling applies to health insurance, whether it is a pool of 10 people or 318 million U.S. citizens: “Health Insurance 101.”
The Affordable Care Act (“Obamacare”), significantly increased risk pooling. Nonetheless, the failing of the ACA is that it doesn’t pool all risk; it doesn’t go far enough, not “too far.”
House Speaker Paul Ryan’s PowerPoint presentation, promoting “Ryancare,” contains a “pie-chart,” meant to prove that Obamacare’s premiums, paid by the young and healthy, are used to pay claims incurred by the elderly and sick. “The idea of Obamacare is … that the people who are healthy pay for people who are sick … and that’s why it’s in a ‘death spiral,’ ” he says.
Clearly, Ryan has no understanding of “Health Insurance 101.”
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Ryancare is little more than tax benefits for wealthy GOP contributors. The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate that Ryancare would take away insurance coverage from 24 million Americans, and provide tax benefits of $600 billion to households earning over $250,000, a huge tax cut paid for by poor and aging citizens.
To solve the U.S. health care issue, we must do what 17 other civilized nations have done: forge a National Health Insurance plan. No matter what we call it, everyone must be enrolled: “Health Insurance 101.”
According to the Commonwealth Fund and the Organization for Economic Cooperation & Development (OECD), compared to these 17 countries, we have the lowest life expectancy — 78.8 years compared to 81.2; the highest infant mortality — 6.1 per 1,000 births compared to 3.5; and we spend more per-capita.
Despite the fact that U.S. costs of health care are now growing at the slowest rate in 50 years — including Medicare, Medicaid and private health insurance — in 2015 the U.S. per-capita amount reached $9,990. Unsustainable.
In mid-2013, the Physicians for a National Health Program released the results of a comprehensive study, authored by Gerald Friedman, professor of economics, University of Massachusetts. The study demonstrates that “an upgrade within our nation’s Medicare program, expanding it to cover all ages, would generate more than a half-trillion dollars in operational savings” in the first year alone.
The physician’s group envisions a single-payer system, funded by “existing sources of government health care revenues, by increasing personal income taxes on the top 5 percent of earners, by instituting a progressive excise tax on payroll and self-employment income, by instituting a tax on unearned income, and by instituting a tax on stock and bond transactions.”
This proposal now sits before the 115th Congress as “The Expanded & Improved Medicare for All Act” (H.R. 676), sponsored by John Conyers Jr. (D-Mich.). The bill would save $592 billion by eliminating bureaucratic waste and reducing drug prices, and would cover everyone. Call it “Health Insurance 101.”
John T. Henry has over 35 years of experience in the group insurance business, sales management, executive management and consulting. He lives in Caldwell.