THIS IS MY 36TH POST ON UNDERSTANDING MONEY TOOLS
There has been so much talk in the past couple of years
about health care in the United States.
I am especially referring to the so called “Obama Care”. Out of
frustration I thought I would do a blog on it.
First, “Obama Care” and the Affordable Care Act are the
same, but many people don’t know this fact. They hate both, but don’t understand the basics of the Act
or why we as a country need to do something about health care. I can’t say I understand a lot about it
myself but will try to say a few things about the facts I do know to help
you. I have heard the entire Act
has about 2300 pages to it, and contains a lot of “pork” on both sides of the
political isle.
Let’s trace back 50-60 years of health care in this
country. It has come a long way in
certain respects, but also continuing on it’s current course will not be
financially sustainable. After
WWII a doctor made a modest income and became a doctor because he wanted to
help people with their health needs, not necessarily a profession to make a lot
of money. Outside the hospital the
doctor made house calls and then you paid him a nominal fee for that service.
Today, there are no house calls in the US. Hospitals such as the Mayo Clinics and other fine hospitals
are like staying at the Ritz Hotels.
The whole industry is quite complex. In the US we spend about 18-20% of our
Gross Domestic Product on the industry. 50 years ago this figure was about 5%.
The inflation of health care is far greater than our overall inflation rate in
other things. We rate overall very poor in the world in health care, about 34th,
and yet we spend so much more and have some of the best doctors in the
world. All the world’s top
countries have a national health care program except for the US. The top
socialized countries in Europe and Scandinavia spend about 10-12% of GDP on
health care.
It is conclusive that if it is the Affordable Care Act or
something else, drastic changes need to be made. We need to look at all aspects,
and cuts will need to be made to general costs, drugs, employment and other
areas. It was on 60 Minutes some time ago about robots in the
manufacturing/industry and hospitals transporting items, taking the place of
humans. The people in the US need to get healthier and in better shape, that is
a great portion of our problem. People in other countries are healthier; they
walk, they eat less fast food, and they are more physically mobile. Hypertension, high blood pressure,
diabetes, obesity are some of our biggest health problems. A good majority of
the people who have these issues need to help themselves with exercise and
better diet. About 30% of Americans are obese, and almost 70% are somewhat
overweight. We are killing
ourselves and running to the doctors and hospitals for every reason. The ratio
between the number of ill people and total costs is alarming. Pretty
dysfunctional.
America is getting older. Medicare and Medicaid account for
over 50% of our health care expenditures.
Reality! Drug companies that push through much of their
costs for research and development to insurance companies are going to have to
cut back, doctors are going to have to take less and will have set payments for
procedures, medical staffs will be cut and less qualified individuals will be
taking on work that perhaps a physician’s assistant does now. Hospitals will
need to figure out how to operate on budgets perhaps 25-30% less than today.
With a national care program we may add 40 million people to
insurance of some sort for medical care. There are several good things about a
national care program, and that program may have to have several layers; one
layer for the wealthy, one for the common man and one for less financially
fortunate, as we have Medicaid today. In general here are some benefits:
- With
a pre-existing illness you won’t be excluded from health insurance and
care. In the past, if you switched
from one insurance company to another, or didn’t work for a company that
provided insurance you might not have been able to get insurance. I had a
couple of Basel cell cancers removed year’s back, however no insurance company
would take me without a total exemption from all cancers. Today the greatest
reason for bankruptcies with older people is medical costs. The costs overall
should be lower and more shared equally, in theory.
- Uninsured
people won’t need to run to the emergency rooms for everything as they tend to
do now.
- The
corporate games played now to avoid paying for insurance perhaps will be
changed. An example of this that I personally know is a friend’s wife who was
pregnant would not be employed by a new company until 6 months after giving
birth.
On the negative side to a national health care program are:
- Total costs are
going up because many more people are added.
- We will sacrifice in places like number of attendants
per patient
and the experience level of
professionals.
- Will
younger people pay and sign up?
The young say, “I’m never sick, not hurt, I’ll take my chances, and sign
up if anything happens”. Costs may be higher per month than anticipated by
government. A person may be eligible to sing up at certain dates.
- The
younger people who this Act is counting on for financial support may take the
penalty for not signing up instead of signing up. From what I understand the government will rely on the IRS
to hold back overpayment in taxes for this penalty. If a person isn’t owed
money back on taxes they won’t pay a penalty. This comes from a financial
advisor friend of mine.
Some of the successful European countries that have national
health care have commonalities that we don’t have; these being smaller
populations, common cultures, common languages, common focus for the good of
the country and it’s people.
The Affordable Care Act is far from perfect and needs to be
worked on, however it is my feeling that something major needs to be done as an
overhaul to the health care industry in this country and this is a first step.
I hope this gives a simple overview of the some aspects of
the health care system.
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