26 January 2010
Congresswoman Lowey's Misdirected Health Insurance Reform Measures
I must say that it aggravates me that none of the measures that Congresswoman Nita Lowey is working to implement will fairly reduce the cost of healthcare in our country.
1) Price fixing and monopolies are only names for rational behavior by insurance companies in highly state-government regulated environments. The benefits of regulation, as we have learned from the financial crisis, are worth paying for.
2) Reducing higher premiums for women will require raising premiums for men. I don't object, but it doesn't lower costs overall.
3) Insurance company profit and overhead requirements are determined by shareholder expectations relative to capital investment and not by the number of insured. Therefore, requiring that 85% of premiums be used to pay for insured medical expenses will increase the size of premiums by grossing them up to reduce the portion of those premiums that is needed to meet shareholder expectations.
4) Can out-of-pocket expenses for healthcare (co-pays?) be reduced without increasing premiums?
The most important reasons for the high cost of healthcare in the U.S. are (a) our infatuation with high-technology diagnostics and solutions for our illnesses, (b) the financial interests of many of our caregivers in the latest high capital-cost specialized imaging, diagnostics and treatment suppliers, and (c) our reliance on tort lawyers to control the performance of our caregivers rather than on dedicated professionalism.
We ought to realize that the American style of life is very expensive--living long unhealthy lives is not cheap. Our Congress and Administration must lead us out of this morass and not cater to the vocal constituencies who re-elect them (pursuant to campaigns financed by the commercial beneficiaries of this unhealthy lifestyle) because they ignore the tough choices we as a nation should be making in order to enjoy the technological and cultural advances that history has allowed us to make.
I must say that it aggravates me that none of the measures that Congresswoman Nita Lowey is working to implement will fairly reduce the cost of healthcare in our country.
1) Price fixing and monopolies are only names for rational behavior by insurance companies in highly state-government regulated environments. The benefits of regulation, as we have learned from the financial crisis, are worth paying for.
2) Reducing higher premiums for women will require raising premiums for men. I don't object, but it doesn't lower costs overall.
3) Insurance company profit and overhead requirements are determined by shareholder expectations relative to capital investment and not by the number of insured. Therefore, requiring that 85% of premiums be used to pay for insured medical expenses will increase the size of premiums by grossing them up to reduce the portion of those premiums that is needed to meet shareholder expectations.
4) Can out-of-pocket expenses for healthcare (co-pays?) be reduced without increasing premiums?
The most important reasons for the high cost of healthcare in the U.S. are (a) our infatuation with high-technology diagnostics and solutions for our illnesses, (b) the financial interests of many of our caregivers in the latest high capital-cost specialized imaging, diagnostics and treatment suppliers, and (c) our reliance on tort lawyers to control the performance of our caregivers rather than on dedicated professionalism.
We ought to realize that the American style of life is very expensive--living long unhealthy lives is not cheap. Our Congress and Administration must lead us out of this morass and not cater to the vocal constituencies who re-elect them (pursuant to campaigns financed by the commercial beneficiaries of this unhealthy lifestyle) because they ignore the tough choices we as a nation should be making in order to enjoy the technological and cultural advances that history has allowed us to make.
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