Today Devin and I stopped by a meeting of the Jefferson Parish Chamber of Commerce. We were astounded by the great speakers they had lined up and were inspired by the following two gentlemen.
First is Mike Mitternight, a local small business owner who not only offers his employees health insurance but pays 100% OF THEIR PREMIUMS! And guess what... he's doing it without a mandate! Listen to what he had to say:
The next speaker, Mike Bertaut, was an absolute knock out. I'm an uber-geek and love seeing statistics and cold hard data (remember, I own my own company that does this stuff!) and he had plenty to offer while making his case on the dangers of government intrusion into the health insurance industry.
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Mr. Mitternight seems to have his facts confused about HR 3200. As written, small businesses who have payrolls less than 250K will not have any taxation if that employer does not provide insurance and they wont have to pay any taxes if they do provide insurance. (And the Waxman/Bluedog agreement would base the fine on net profits of the business and not payroll, where businesses netting under 500K will not be taxed).
ReplyDeleteMr. Bertaut also has some flaws in his logic. The reason premiums have gone up over the years is primarily because private insurers have moved from a 95% medical loss ratio to a 70% medical loss ratio. Less money going to care, more money going to profit.
And people often say that medicare pays on average 30% of the billed amount. Well, I had bloodwork done recently. The billed amount was $500. The negotiated rate between my insurance company and the provider was less than $40. Thats right, their negotiated rate for the work was less than 10%.
And Conservatives, I would think, who don't want to be on a public plan would obviously pay money to stay on the private plan right?
And what about the laws of supply and demand. If less people demand the product (private insurance) then the COST of insurance will go down, not up, until the point where the price can be brought down to levels where more people will buy it. AND if private insurance is more reliable than the government plan (as many conservatives suggest), it would be worth it for those who can afford it to continue with their private plans. And only those people who currently lack insurance would take advantage of the less expensive government plan.
I am amazed at the amount of people who claim to be fiscal conservatives who forget basic economics in the healthcare discussion.
This is actually Mike Bertaut, Gen has allowed me to use her account to answer.
ReplyDeleteI appreciate the comments on my little spiel there, but I'm afraid they don't fit the facts.
Anyone can look at insurance company financials. All the publicly traded companies (United, Humana, Coventry, AETNA, CIGNA, Wellpoint) publish their loss ratios (and other stats) at the security and exchange commission's website, just look at their 10Q's. Average Loss Ratio for the industry in 2008 was right at 15%, or 85% of all premiums went directly to medical costs. BCBSLA has published their MLR for 2008 and it was 85.8%, indicating 14.2% overhead. 7% salaries, 4% commissions, 2% taxes, 1.2% to reserves (remember BCBSLA is not for profit), those are rounded off but very close to reality.
I checked the history, MLR's were never 95%, although 30 years ago, before computers could pay claims they were close to 70%. Nowadays, overhead for the big insurance companies goes down every year as a % of premiums. The cost is entirely driven by the medical side, and THEIR costs are increasingly driven by government underpayments in Medicaid and Medicare, combined with a shortage of the "Golden 5" specialist docs, whose salaries are going up 15% a year or so.
That's what is so scary about a public option. Clearly hospital CFO's and Clinic Financial folks all tell me they cannot survive in a market where Medicare is the BEST payer, let alone Medicaid.
Fascinating stuff, though.
Mike Bertaut