How to sell Obamacare

For the past few weeks I have been hammering home the point that the average person has trouble understanding insurance. To further illustrate the point I offer the following story that was told to me as truth. During WW 11, the government wanted to encourage military people, to purchase a life insurance plan that cost $6.50 per month for $10,000 in coverage. They sent around this young lieutenant to explain this new program but after speaking for two hours before each of a dozen large groups, he got very little response. At the next meeting an old sergeant who had been with him all along asked if he could talk and the lieutenant said, go for it Sarge. The seasoned sergeant spoke for thirty seconds and everyone signed up and here is what he said. Men the government has come out with a new life insurance plan and it cost you $6.50 per month for $10,000 of insurance. This means that if you buy this insurance and you go overseas and get killed the government will pay your family $10,000. If you don’t buy this insurance and you go overseas and get killed the government will pay your family nothing. Now when you get overseas who do you think the government will send to the front lines first? What Obamacare needs is a whole bunch of old sergeants.

Glitch

One of the main computer glitches in Obamacare is caused by the fact that they want the poor people to see the subsidies they will receive if they sign up. This means they must first enter all their personal financial data before their subsidy can be calculated. The fear is that if people see the cost before the subsidy they will get turned off and not apply. Typically a person living near the poverty level will get insurance at no cost but it will show their cost as $200 per month or so. Once the subsidy is applied their cost is much less.

The next Obamacare problem

According to the news people the big problem with Obamacare is signing up but they are mistaken. That is the current problem but in time it will be overcome and then comes the BIG problem. As a financial planner I took many home study courses and they lasted 18 weeks. You would study one section each week and at the end of the semester you would go to the local university and take a two hour written exam. You were told you must use all of the technical terms in order to pass and when it was over you were advised never to use those terms again. The reasons for this became clear when I started sitting across the table from mom and dad explaining insurance. Even the basic terms like premium, co-pay, deductible, stop loss, co-insurer, out of pocket and preferred provider caused no end of consternation. The first group to sign up will be those who are uninsured which means they have likely never seen these terms before. They will be asked to select from dozens of different plans and after reading through a page of one plan they will through up their hands in frustration. The first thing that most people told me was that they don’t know much about insurance and they said it in a tone that led me to believe that they didn’t want to know. This will be further complicated by some people qualifying for subsidies and what they get may depend on the kind of plan.

What is Obama up to

Over these past five years I have been a close observer of President Obama and believe that I understand his vision for America. He is a composite Politian, one part community organizer and one part Chicago politics. He objective is to transfer income from those who earn it to those who in his opinion need it. Obamacare is a prime example. Low income people those below the poverty level will receive free or subsidized health care paid for taxpayers. We have 140 million people working and only 70 million pay taxes. The President did not start many programs but they have expanded under his tenure. For example last year, 30 million low income families receive earned income credit up to $5,000 per family. This is money taken from tax revenues and given to people who paid no taxes. 80 million Americans are on Medicaid which is almost free health care, 48 million receive food stamps, 25 million received Women’s and Infants Care (WIC), 13 million housing allowance and 6 million receive cash assistance. In addition we now have 7 million collecting unemployment. As a community organizer The President learned early on that you can use the carrot or stick to get votes. If you are providing government benefits or if you threaten to take away benefits, you can encourage people to vote for you. The President is not concerned about deficit spending as long as it is used to garner more potential voters. The great French political thinker de Tocqueville said: “The American Republic will endure, until politicians realize they can bribe the people with their own money.” For many years the government was bribing the rich for votes and we could get away with that because there were not that many rich but as we move toward bribing the poor we will go broke because there are just too many poor. We can afford to give billions in corporate welfare but not trillions to the poor. I am not proposing that we do either but we certainly cannot do both. In all of this I have not included the cost of social security and Medicaid and the yet to come Obamacare. Better keep those printing presses running around the clock.

Obama plan

There are 51 Democrats, 47 Republicans and 2 Independents in the current US Senate. Senator Cruz in his attempt to stop Obamacare got the House of Representatives to vote against it and proceeded to get the Senate to do the same. He needed all of the Republicans, the two Independents and 1 Democrat to vote with him. He gave a 21 hour speech and got the nation fired up to back his attempt to stop Obamacare. He gave the impression, apparently believed by many, that this could be done. He failed to get any Democrats or Independents and not even all the Republicans to vote with him. You might wonder why the Republicans, none of whom voted for Obamacare in the first place would fail to back him. The answer is that they understand how the constitution works, something many Americans do not. The President had said on many occasions that if the Senate passed the bill he would veto it. To override the veto requires that 67 Senators vote to override and everyone who understood the rule knew that this was not going to happen. I would really like to know what Senator Cruz was trying to accomplish. President Obama knows the Democrats will not take back the house in 2014 and so he will have to fight them to pass any of his programs or be a lame duck for the next three years. His plan is to split the Republicans and use the divide and conquer approach and Senator Cruz helped. Obama’s next move is to bring up immigration reform which will further divide the Republicans. I can only assume that these Republicans are only doing what we always ask our politicians to do and that is to stand by your principles and forget about getting elected.

Obamacare

As the mystery surrounding the disastrous roll out of Obamacare unfolds two salient points are rising to the top. First a decision to keep the details hidden until after the November 2012 elections caused a delay. This resulted in the loss of valuable time to get the project completed and caused later errors in trying to catch up. The second was a last minute decision not to allow users to see the cost without the subsidy. There was concern that if someone saw the cost before the subsidy they would get turned off and not buy. This is particularly important for low income people. For example a family earning less than $30,000 might well qualify for free health care but without the subsidy the cost might be $300 per month. A young family man checks out the site and finds the cost is too high and decides he cannot afford health care not realizing that there is a subsidy. In order to determine the subsidy the person must impute a lot of personal data, like social security numbers, family income and ages. Only then can the government determine the subsidy that this family is entitled to but this additional step caused a lot of hang ups in the system.

Rise of women

I turned 76 this past week and as I look forward to the last quarter of my life, I see things throughout the world that are disturbing but just when pessimism raises its ugly head, I see growing on the horizon the great hope for America and thus the world. It is all around us but it has crept in on cats paws and we really didn’t notice. It is the rise of a new power that has lain dormant for centuries but has been awaken from its slumber. It is an energy greater than the atom, yet surrounded with a force of love that makes men tremble. It is the unchaining and releasing of the female intellect to grow and develop. Today in American 60% of college students are women. They represent the majority in Medical Schools and Law Schools as well as Graduate Schools. There has never been a time in the history of the world where any country has tapped into this power in such a grand manner and this new force will be the beginning of a new revolution in America that will spread around the world. Technology has removed the need for physical strength and opened the door of opportunity for all blessed with mind and ambition. I say come on in to all the ladies. The world has been waiting a long time.

Wise king

Many years ago there lived a wise king who one day called his scholars together and asked them to write down all of the knowledge they had accumulated so that future generations could build on that. A year later they returned with 12 large volumes and he said, no, no. People will not have time to read that, go back and condense it. A year later they returned with one large book and he sent them away again. Finally three years later they handed him a piece of paper and he read it and said that is what I was looking for and the on the paper was written one sentence and it said, “there ain’t no free lunch”! If you were raised in a home where you were taught that you must work to support yourself, you understand the message but if you were brought up in a well fare home you may not. What was your home like? When President Obama came out five years ago and announced that his new health care plan would insure 31 million new people and it would not cost anything, did you believe that. Do you think he believed that? The answer depends on how you grew up.

Putin and Obama

The news people were in agreement that Putin and Obama did not get along but they may have been mistaken. I say that because today Putin got Obama out of a very awkward situation by offering to discuss the placing of Syria’s chemical weapons under the care of an international group. Immediately Obama said that he had previously discussed this action with Putin and that we would not be at this point if he, Obama, had not threatened to use the military against Syria. This is a great example of snapping victory from the mouth of defeat. It is one of Obama’s best political coup’s. The Presidents demeanor immediately reflected his new found way out and I say great. The Syrian foreign minister said he would look into the idea and the United Nations quickly announced a meeting to discuss the proposal.

New Pope

I have been watching the new Pope and I couldn’t be more pleased. His central theme is to look out for those in need. He recently chastised those who concentrate on divisive issues like abortion, same sex marriage and contraception. These are issues designed to allow people to pass judgment on others. It allows some to tell others how they should live their lives and what they should believe. Notice the,”shoulds”, in that sentence. I believe the Pope is telling us to quit wasting all that psychic energy fighting over issues and get on with sharing your talents, knowledge and experience with others in ways that are helpful. Give up trying to be right and trying to convince others of your right and get on with reaching out a helping hand. There are people around you every day that need what you have to offer. Open your eyes and see, and open your heart to those crying out for help. This is what I hear this new Pope saying to me.

5 and 50

I have pointed out that private health care companies cannot ration care because competition will not allow it but a government plan with no competition can. For those willing to face reality they will quickly understand that the country cannot afford to offer all total care to every person and thus the need for rationing. There is something called 5 and 50 in our health care system and it refers to the fact that 5% of the population uses 50% of all health care resources. One half of the population spends on average $236 per year per person while 5% spends $41,000 per year per person. Going further 1% of the people spend $90,000 per year per person. Regardless of what kind of health care system we end up with some type of rationing will be necessary and people don’t like to hear this but the money is just not there. We can close our eyes to the situation and keep kicking the can down the road but death panels are on the way. The longer we postpone this, the more difficult it will be because new and costly technologies are continually being developed.

Obamacare

For the advocates of a national health care system these times are frustrating. It’s because they originally wanted a single payer system somewhat like Medicare but that was not politically feasible so they settled for this quasi-government/private plan called Obamacare. The hope is that in time this is what we will end up with as companies and government agencies all abandon their health care plans and switch over to Obamacare at which time it will become the desired single payer plan. If this happens we can get a glimpse of the cost and changes that will take place. First change will be the elimination of 10 million jobs in the insurance industry. These are people who have at a minimum a 12 grade education, people who for the most part have families and are homeowners, people who are productive tax paying citizens. They are computer savvy and adept at dealing with government and insurance paperwork. They will eventually work their way back into the system. Today there are 50 million people on Medicare and the annual cost is 600 billion or $12,000 per person per year. On the other end of the spectrum we have Medicaid and there are 60 million people covered at a cost of 400 billion or $6,000 per person per year. Since this group includes the old and the young we could say that if everyone were on the same plan the cost would be $9,000 per person per year. Since we have 310 million people we can project the cost at 2.8 trillion dollars which is close to the current cost of health care for the country. Much of the cost of the current health care system is born by employers but that will change and the cost will be shifted to the government. People who are currently insured by their employer, be it private or public will be moved to Obamacare and many will not like it because employer plans, especially those negotiated by union contract, are significantly better than even the best plan under Obamacare. This is one of the reasons that the big unions are objecting, however their objections since they met privately with the president have been muted, leading people to believe that they struck a deal allowing them to opt out of Obamacare. For every group that is allowed to opt out the cost to those remaining will increase. Once everyone is under the single government plan the move toward rationing will accelerate and most of us will have our treatment options determined by a group of experts living in Washington DC. This is the way that Medicare operates but the new plan will ration more in order to meet the cost of the ageing population.