Thursday, April 14, 2011

Health Care, "Talking points' vs. Reality by George Coppenrath

George Coppenrath, a certified insurance counselor since 1988, has written two excellent articles in the Caledonian Record about the Democrats' takeover of Vermont's health care system.   Here is the first, published on April 13, 2011, entitled "Health Care, 'Talking Points' vs. Reality" : It is well worth reading.

"We have seen and heard Vermont Gov. Peter Shumlin and some legislative leaders repeat the same statements over and over. In Montpelier those are called "talking points" and are often used to reinforce the point of view that supports their position. Unfortunately these "talking points" are often untrue and unsubstantiated. For example: "the current health care system is broken and we need to fix it" is not true. We have some very well managed organizations with competent and caring providers doing their best under conflicting, inefficient and expensive mandates from our government since 1991. Legislation was passed at that time mandating requirements for health insurance that were not sustainable. Because of that legislation Vermont residents had few choices outside employer sponsored health insurance.
As the mandates took effect and competition among insurance companies disappeared; the cost of premiums marched steadily upward. The talking point: "this failure of the market-based system" is clearly untrue because, after the 1991 legislation took effect, those persons who were previously able to purchase health insurance could no longer afford it. If their incomes were low they applied for Medicaid; if they were not eligible for Medicaid they went without insurance. Over the following 15 years the number of Vermonters on Medicaid marched steadily upward as did the number of residents without insurance. This was a direct result of the action of our state Legislature.
Another talking point is: "the cost of health care needs to be controlled." Since recorded history the best mechanism for controlling costs is competition. For example, look at package delivery or competition in the phone industry; we see more competitors, lower costs, more product options. I have yet to see an example of government control reducing costs. And yet many who advocate for more government action to lower health care costs frequently use the term "cost shift." Cost shift occurs because the federal and state health insurance programs pay only 65 to 85 percent of the true costs for health care. The private insurance companies have those costs "shifted" to them resulting in much higher health care premiums paid by private individuals and business groups, e.g. up to 120 to 130 percent of the actual costs. That means 1/4 to 1/3 of your increased premium is due directly to the government's "cost control" management. If you consider that, and the recent proposed tax increases on health care providers it makes one wonder, "how does increasing the cost of health care by adding a 17 percent tax, reduce the cost of health care?"
It is clear that the current government-directed health care mandates and regulations have resulted in higher premiums, more uninsured residents, less competition, and fewer options for health care providers and consumers."

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