Wanted: Healthy People to Prop Up Obamacare Ponzi Scheme

The U.S. health care system is an unsustainable mess. Medical spending is rising at twice the rate of income growth. Medical prices are rising at three times the rate of consumer inflation. National health expenditures are approaching one-fifth of the economy. Currently the government funds about half of health care. In the coming decades, medical spending is on track to crowd out much of the other public services the government provides. There is a solution; we just haven’t tried it yet.

The Affordable Care Act (ACA) was sold to the American people as a means to fix those problems and make health care affordable. The vehicle to achieve this — implausibly — is a requirement that we all must purchase overpriced health insurance. In addition to stipulating the benefit package Americans are allowed to have, ACA regulations also force insurers to accept all enrollees — including people in poor health. Moreover, each person’s premiums must reflect average health in a community rather than individuals’ health status. In insurance parlance this is what’s known as guaranteed issue/community rating. The law does allow charging some people more based on their age, such as charging people in their late 50s more than the rates paid by people in their 20s. But premiums cannot be higher for enrollees with high medical bills.

How does this work in practice? Not very well! For Obamacare to work, an army of young people need to willingly pay $3,000 per year in premiums knowing they will not even come close to reaching their $3,000 deductible. An average of about one baby is born to women sometime in their 20s. But that’s about the only major expense a 20-something will incur. For their part, hoards of healthy 30-somethings all need to all pay $3,500 annually for health coverage that provides them few tangible benefits. Healthy 40-somethings need to chip in $4,000 in premiums for a $4,000 deductible they will never reach; and healthy 50-somethings need to cough up $6,000 in premiums for a $6,000 deductible most of whom will never surpass. Sounds like a bargain, right? To make health care “affordable,” millions of Americans need to spend thousands per year on health coverage that pays virtually none of their medical bills. In other words, access to affordable care under Obamacare is premised on the idea of that most people necessarily must get a raw deal. Obamacare is premised on overcharging most people to offset the higher costs for the few enrollees who would otherwise find their coverage unaffordable if charged premiums based on their own health risk.

Average health spending per capita in the United States is around $8,600 annually. But it’s not distributed evenly. About 80 percent of the enrollees are healthy. They collectively consume only 20 percent of the health care dollars used; about $2,150 per year on average. However, some people are ticking time bombs. The least healthy 20 percent spend an average of about $35,000 yearly.

On average:

  • About 10 percent of the population has health concerns accounting for 17 percent of spending.
  • Another 5 percent have serious health concerns accounting for 16 percent of health spending expenditures.
  • The next 4 percent consumes nearly one-quarter of health care dollars (27 percent), while;
  • The sickest 1 percent of patients accounts for 20 percent of spending.

Think about that for a moment: the sickest 5 percent of the population consumes nearly half of all health care dollars. Of course, most of those are not really genetic losers. Many are merely aged seniors in their last months of life.

Obamacare purposely attempts to make health care affordable by forcing the healthy 80 percent to shoulder more of the costs for the unhealthy 20 percent. But that does not make care affordable; it merely shifts the costs from one party to another. Consider how absurd this is: we could all share the nation’s medical bills if we merely sent a check to the government for $895 a month. That is sufficient to pay an equal share of national health expenditures and includes an extra 20 percent so the government could contract with insurers to negotiate with hospitals, process claims and eke out a profit. Of course, that is not likely to work since a lot of kindergarteners cannot be trusted to pay their fair share out of their lunch money. It also illustrates how much money we are spending as a nation on medical care.

The bottom line: we will never get a handle on runaway health spending until we get a handle on what to do about the 20 percent of the population that consumes 80 percent of health care dollars. We don’t necessarily have to throw them under the bus, or put them on an ice floe to drift out to sea where they die of exposure. Multiple studies have found that about 30 percent of medical care is wasteful, unnecessary or possibly even harmful. If we could better manage the care provided the sickest 20 percent of the population we could possibly reduce expenditures by one-quarter or more.

The perverse way Obamacare attempts to make health care affordable is both unconscionable and ineffective. Moreover, it will do nothing to reduce the rising cost of health care. Rather than disrupt the lives of the 80 percent by overcharging them to prop up an unsustainable health care system, why not improve the way medical care is provided the sickest 20 percent?

An earlier version of this Health Alert appeared on Town Hall.



Comments (49)

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  1. Ron Greiner says:

    Sorry Devon it is not going to happen. United Healthcare is paying commissions on their inexpensive Short-Term-Medial (STM) product that only takes healthy people. Then if one of these healthy people gets cancer they dump them on the Obamacare exchange to create a death spiral. So Obamacare is circling the drain and cannot be saved.

    Obamacare is herding Americans into dangerous HMOs like cattle which puts a big smile on Hillary’s face. Remember Hillary’s failed attempt to force all Americans into HMOs in the 1990’s?

    Cutting edge news on Hillary is available at:


  2. Floccina says:

    About 80 percent of the enrollees are healthy. They collectively consume only 20 percent of the health care dollars used; about $2,150 per year on average. However, some people are ticking time bombs. The least healthy 20 percent spend an average of about $35,000 yearly.

    Is that lifetime or in any given year?

    • Ron Greiner says:

      Floccina, Devon said $35,000 yearly. My son’s RX is $6,000 a month and I have always thought of him as a ticking TIME bomb.

      Devon did a good job calling Obamacare a Ponzi Scheme but he should have said, exactly like Social Security which needs reformed with tax-free Personal Savings Accounts (PSA), with a mutual fund option, so nobody is left behind holding the bag in the future.

      • Pjohnson says:

        I don’t agree that Social Security is a Ponzi scheme unless you include its congressional raiders who annually toss in IOUs that they’ll never repay nor mean to. Congress can’t stand a solvent pile* of money that they could otherwise use to manipulate voters, pals and themselves.

        * I do recognize the SS pile isn’t entirely solvent and needs tweaking. But compared to about every other government program it’s a near gold standard.

  3. Barry Carol says:

    “Average health spending per capita in the United States is around $8,600 annually”

    This is a grossly overstated number in the context of the cost of health insurance. It includes such costs as long term custodial care in skilled nursing facilities not covered by traditional health insurance. It includes dental care covered by separate dental insurance policies or paid for out-of-pocket. It includes medical research paid for mainly by NIH grants and philanthropy. It also includes public health initiatives and hospital construction. Finally, it includes insurers’ administrative costs which should be legitimately spread relatively evenly over the entire insured population.

    Most large self-funded employers who provide comprehensive health insurance coverage to their employees spend between $4,500 and $6,000 per covered life per year to insure its active employee population (as opposed to retirees) and their families. Some companies have relatively young and healthy workforces and other companies and the public sector skew older.

    It’s also important to note that very few people have high healthcare costs EVERY YEAR. Some need heart surgery and then recover. Some need expensive cancer treatment and then go into remission. Some need a hip or knee replacement and quickly recover. A low birthweight premature baby could rack up bills into the seven figures and then ultimately recover well enough to lead a normal and reasonably healthy life. Even within the Medicare population, only 15% of seniors reach the Part D donut hole in any given year and two-thirds of those don’t come out the other side into the catastrophic coverage zone.

    Better management of chronic disease is a separate issue and we’re making progress in that area with the help of newer payment models that get away from pure fee for service and give providers flexibility to go into the home to assess needs, communicate by phone or e-mail, monitor patients remotely, etc.

    High cost care at the end of life is an issue mainly for Medicare and Medicaid. It has more to do with the inability of family members to let go and not knowing when to stop. Within the younger population, it comes up in the treatment of advanced cancer. The litigation environment also contributes significantly to healthcare costs through defensive medicine and aggressive practice patterns developed by the specialty societies that, in part, reflect the reality of the litigation environment that doctors have to practice within.

    Finally, it’s not a viable model to expect older folks to pay 5-7 times more for health insurance than younger people because they use 5-7 times more healthcare services on average. How many people see their salary increase 5-7 times in real terms over the course of a career? I would say very few.

    • Devon Herrick says:

      Finally, it’s not a viable model to expect older folks to pay 5-7 times more for health insurance than younger people because they use 5-7 times more healthcare services on average.

      Barry, I find very little to disagree with in your comment. However, my concern is that health care spending is rising at twice the rate of income growth and is nearly one-fifth of our economy. I don’t believe it’s a viable model to spend nearly $3 trillion dollars on health care annually (nearly one-third of which is wasteful, unnecessary or possibly even harmful; all of which is overpriced).

      If only one person in a million faces a million dollar medical bill, it can easily be insured against. If everyone can expect to use $1 million in lifetime medical care, it cannot be insured against without high premiums. Neither can the government make it any cheaper by socializing the cost. As other economists have also pointed out, if something is unaffordable to the vast majority of people, it cannot be any more affordable when funded collectively.

      I referred to Obamacare as a Ponzi scheme because it relies on a steady stream of healthy people paying high premiums (while not filing claims) to prevent the collapse of the exchange plans. Yet the insurers are losing money and the premiums are rising. Absent a miracle, I do not believe it can be sustained. This (along with Medicare spending that will reach 6% to 9% of GPD in 70 years) all point to some uncomfortable societal choices.

      • Barry Carol says:

        Devon –

        I completely agree that the ACA exchange plans are not sustainable mainly because the risk pools are worse than the insurers expected as the relatively young and healthy opt to pay the fine instead or otherwise remain uninsured.

        I’ve written numerous times before about the need to bend the healthcare cost growth curve and while there is no silver bullet to accomplish that, there are a lot of what I call silver pebbles. These include robust price and quality transparency tools so patients and referring doctors know what care will cost ahead of time which would make it easier for patients to access care in the most cost-effective setting. We need sensible tort reform to reduce defensive medicine. We also need a more cost-effective approach to end of life care which can be helped along by more people executing living wills and advance directives and doctors being more willing to provide patients and families with an honest prognosis when the end is near rather than hold out false hope by offering expensive treatments, especially for cancer, that are unlikely to do any good. Payment models other than fee for service may be more effective in the management of chronic disease including coronary artery disease, congestive heart failure, COPD, diabetes, asthma and depression among others. Better and more aggressive use of data analytics to attack fraud would also be helpful.

        Separately, a few years back, Medicare published some data that quantified the percentage of costs accounted for by the sickest 5% of members in a particular year and then cumulatively over a five year period. According to CMS, in the particular year, the sickest 5% of beneficiaries accounted for 41% of program costs. Measured cumulatively over five years, however, the sickest 5% accounted for only 27% of costs. That’s because some died along the way. Others had surgery and then recovered. Comparatively few had high costs every year.

        Finally, with respect to the estimate of 30% of healthcare costs being unnecessary or wasteful, I’m not sure those costs can be identified ahead of time. I’ve never had a doctor tell me that the test he is about to order is unnecessary and wasteful but will order it anyway. He may do so to protect himself from a potential lawsuit but it won’t be presented to me that way. Other tests patients want or insist on getting because they equate it with being thorough or doing them “just to be sure” that it’s not something serious even though it’s extremely unlikely that it is.

        In theory, if people are directly exposed to higher healthcare costs through a combination of high deductibles and high and rising insurance premiums, there should be more demand from the bottom up to find ways to mitigate healthcare cost growth. If they understand that health insurance is expensive because healthcare is expensive, they might be more willing to root out more of that unnecessary and wasteful care a lot of which is driven by patient demands and expectations.

        • Al says:

          Let’s make it simple. You say “We need…” What we really need is a free marketplace so that the individuals involved will automatically bend the healthcare curve.

    • Jane Getchell says:

      “Finally, it’s not a viable model to expect older folks to pay 5-7 times more for health insurance than younger people because they use 5-7 times more healthcare services on average. How many people see their salary increase 5-7 times in real terms over the course of a career? I would say very few.”
      I see your point, but it’s exaggerated. While people’s medical costs increase as they age, other costs decline or go away altogether: the house is paid for, the kids are on their own, college bills are behind them. And yes, salaries do increase over the course of their careers. The upshot: they have more money left over to pay for their medical care then they would have had at a younger age.

  4. Uwe Reinhardt says:

    The irony is that virtually all employment-based private health insurance has been community rated for as long as I can think back. I mean by this that the contributions individual employees make toward health insurance toward the employer-sponsored health insurance typically is independent of the employee’s health status. Chronically healthy employees thus routinely subsidize chronicle sick fellow employees. I don’t recall much outrage among conservatives over this arrangement, which is puzzling, to say the least. Indeed, I should not wonder if the health insurance the NCPA offers its employees is community rated as well, possibly even across age.

    Community rating is also the basis of most health insurance systems abroad — e.g., the Swiss system which is so often cited by conservatives (e.g., Avik Roy of FORBES) as a possible model for the US.

    The alternative would be to let health insurers price their policies to the individual on that individual’s health status. This is called “actuarially fair” pricing. It requires the individual to submit to the insurer, on dozens and dozens of questionnaire pages, the most intimate details of not only her or his health status but also that of family members (e.g., father, or siblings). Talk about a loss of privacy in this day of hacking.

    Presumably the government would then subsidize the premium paid by the individual on a means tested basis, whatever that may mean in practice. There might be a rule, for example, that an individual’s or a family’s total outlay on health insurance (and perhaps also on out of pocket spending) should not exceed x% of adjustable gross income. Whatever approach were used, it would trigger a new administrative nightmare, because on behalf of tax payers government would have to make sure that the actuarially fair premiums charged by insurers are indeed justified.

    Yet another alternative would be simply to practice Social Darwinism in this sphere, that is, to let sick people cope with the high premiums they are charged failing which they would be expected just to whither away. Probably more than a few Americans favor that approach until, of course, they fall seriously ill, when they rely on EMTALA and, as members of a civilized society, claim a moral right to health care, whether they can pay for it or not. That, too, has been the American way, which is why Romney introduce both community rating and a mandate on individuals to be insured on Massachusetts, on the advice of both the Urban Institute and the Heritage Foundation.

    • Ron Greiner says:

      Not True Uwe, United Healthcare’s Short-Term-Medical (STM) has a total of 5 questions so stop trying to scare people. My Medical Underwritten product has a total of 20 questions which is a far cry from your pages and pages of questions.

      Besides, Life Insurance asks all sorts of questions and I don’t hear you saying Life Insurance should be community rated because of all of the scary hacking problems. A 30-year-old woman can get $1,000,000 worth of Live Insurance that will pay 90% of the benefit if she is diagnosed with ALS, ovarian cancer or has a stroke and the premium is about $50 a month. Of course a 30-year-old male would cost a bit more because of the Life Insurance War-On-Men.

      • Uwe Reinhardt says:

        Ezra Klein once posted such a questionnaire (for Michigan)which was considerably longer than just 5t questions. Ian Morrison wrote a whole blog about the length of the questionnaire in H&HN.

        Maybe you are just lucky.

        • Ron Greiner says:

          I’m just talking about United Healthcare, the Nation’s largest health insurer. I would prefer that the insurance company did medical underwriting so these sick people being terminated off employer-based plans when they are sick as dogs don’t just jump on Individual Medical (IM) and drive up our premiums. Everybody knows premiums are adjusted due to claims experience.

          We were not born yesterday here at the NCPA. I have never paid too much attention to Ezra Klein, who calls himself a policy wonk, because nothing is further from the truth. The 1st time I talked to him he was saying that this HSA health insurance was pretty good but the problem was it was a non-qualifying plan that he was talking about. It took a while but I got him to see the light. Ezra was still in college then.

          I told Ezra, “Come on Ezra you can say, tax-free HSA.” Ezra always leaves tax free off the beginning when he says HSA. That’s not right.

    • Bart I. says:

      “…which is why Romney introduce both community rating and a mandate on individuals…”

      To be fair, this would not have been Romney’s first choice. Massachusetts was not in a position to create a tax incentive comparable to the employer exclusion. I think he’s said as much, although I wish he’d done so more clearly.

  5. jim burdick says:

    The remarkably sad thing about this NCPA post is that it makes the case very convincingly for a single national federal health care program with doctors getting involved to provide a professional alternative to private insurance profits and government rules. The figures show that this would save money. But the NCPA wilds socialism (wrongly) and wimps out. It is not the fault of Obama or his ACA (he would have preferred a law closer to reality). It is the fault of short sighted, commoditized generalizations that we have the mess described.

  6. Brett Gaspers says:

    I find this article confusing because it talks about two separate things: Obamacare (by which I assume Devon means individual/exchange plans) and statistics about what I assume is the entire population (“Many are merely aged seniors in their last months of life”).

    But Obamacare only applies to the non-elderly population; the aged seniors in their last months of life are separately covered by Medicare and Obamacare premiums have nothing to do with them.

    I still think the basic premise of the article is probably sound, but it would be interesting to know if these statistics were largely the same for the younger population. If anything, I’ve read analyses suggesting that enrollees in exchange plans are sicker than the general younger population, which is another reason why these plans are heading toward collapse: the adverse selection cost spiral will make it easy for the healthy to decide paying the penalty makes more sense than buying “insurance” that will never cover any of their medical expenses.

    • Devon Herrick says:

      You are correct. I only have statistics on the general population. However, exchange plans are attracting a disproportionate share of the 20% with higher health costs. But as many others have pointed out on earlier blog posts, the real issue is the need to control costs by spending health care dollars more wisely. Doing so would help Medicare, Medicaid and the taxpayer burden for exchange plan subsidies.

  7. The Big Ham says:

    95% of Americans are already exempt from the ACA mandates because of the 8.05% affordability exemption. Premiums have gotten so out of sight only the wealth can afford without subsidies. Trump is correct when he says these politicians are completely incompetent.

    • Ron Greiner says:

      So True Big Ham. These Obamacare salespeople though tell everyone that they will owe a penalty and they don’t even ask about income to determine the affordability exemption. I call that Deceptive Sales Practices but that is par for the course with Obamacare and all of the lawlessness.

  8. The Big Ham says:

    It’s much worse than that Ron, The tax preparers are arbitrarily charging the tax penalty without knowing the 8.05% exemption even exists!

  9. Ron Greiner says:

    Exactly, these H & R Tax People. In Casper, WY a 64-year-old couple has the cheapest premium of $1,923 a month or $23,076 a year on the exchange. So this couple would have to earn $288,450 to be subject to the Obamacare penalty.

    These poor consumers are being scammed and lied to by these Obamacare sales people which is a serious Ethics Violation if anybody was actually licensed, which they aren’t, crazy navigators.

  10. Bob Hertz says:

    Note to Dr Reinhardt:

    On the one hand you are correct that most employer-paid insurance is community rated.

    Why then does this part of community rating bother no one, whereas the community rating in the ACA draws much anger?

    I would advance two reasons:

    a. When the employer pays the whole premium, which was the model for many years, the employees don’t really care about the allocation of premiums.

    b. The anger today comes from people who used to have inexpensive underwritten pre-ACA insurance. They now must pay more for policies that may be worse than they had before.

    c. Medicare is also community rated, and again it causes no anger because taxpayers cover almost all the payments.

    • Devon Herrick says:

      Economist tend to believe that workers themselves bear the cost of employee health coverage in lieu of higher take home pay and direct contributions. As I recall, I saw an article a while back that suggested that even though some workers have higher health costs, they tend to bear a greater proportion of the costs. Maybe that’s due to so-called job lock. Or maybe it’s older workers who are afraid to start over at another company.

      That makes sense to some degree. A young worker doesn’t cost the health plan much and doesn’t appreciate health benefits as much as an older worker.

    • Barry Carol says:

      Bob –

      I suspect your point B is the crux of the matter when it comes to objections to the ACA exchange plans, the mandate to purchase insurance and the penalty / fine if you don’t unless you qualify for an exemption.

      Employer plans, as noted, have always been community rated but you have to sign up when you first join the company. If you need insurance later, you will have to pass underwriting unless you qualify under the life changing event rules like losing coverage under a spouse’s plan. For the most part, people just accept the rules around employer plans as the way it is and the way it’s always been, at least as long as anyone can remember. The same applies to both Medicare and Medicaid.

      As an aside, there was an interesting article in today’s WSJ about the difference in drug prices in the U.S. vs. prices in Norway, UK and Ontario, Canada and why those differences exist. The focus was on drugs covered under Medicare Part B. Anyway, the last paragraph of the story nicely sums up the difference in attitudes between the U.S. population and the populations of other developed countries as it relates to healthcare more generally. I quote that last paragraph below.

      “Countries with national health systems tend to feel “we’re all in this together” and “we can’t afford everything for everybody at any price,’ said Steven Pearson, a physician who founded the Institute for Clinical and Economic Review, a Boston non-profit that evaluates the cost-effectiveness of healthcare. In America, it’s more, “Well, I’ve paid my insurance premium and I don’t want anyone to tell me no. I don’t want anyone to get in the way of me and my doctor.””

      It’s the classic difference between the solidarity mentality and the individual mentality. That’s a huge cultural difference that will probably always be there in debates about how best to provide healthcare and health insurance to our population.

      • Gitmoray says:

        As tends to be the norm for NCPA articles these days, the original article confuses a whole bunch of concepts. Obamacare is a god-awful mess, but not because of the mandate that liberals rightly call out conservatives on. The mandate is simply a sound insurance practice of avoiding adverse selection. although it has been very badly implemented by making the penalties way too light, and therefore creating an incentive for healthy young people to opt for the penalty instead. FULL disclosure : I am very conservative, but prefer to keep my brain circuitry turned ON.

        The comment by Barry about the easy accessibility to meds in the European countries stems from the arrogance with which most Europeans view the U.S. The part they don’t address is that their meds are accessible and inexpensive because they do not pay for the research to produce the new cutting edge stuff, but quickly adopt it when the Indian labs start copying it 5 years after the original patent goes into effect. Go into any Canadian, Argentine, Dutch or Thai pharmacy and ask for generic Crestor, and you will get it, then try the same in Cleveland Ohio and watch the blank looks.

        This topic is maybe a bigger issue than ISIS or Obama’s favorite “Climate Change” and it does not get advanced by think tanks putting out lightly thought out articles that are long on biatching, but very short on positive ideas.

        • Devon Herrick says:

          Stay tuned… Next Monday’s Health Alert will deal with how to better manage those with high health spending.

        • Ron Greiner says:

          Gitmoray, you say you are very conservative yet think that 2 1/2% penalty of income for not buying a Federally mandated over-priced HMO is not enough. School teachers are charged $1,168 a month in Pasco County to add 2 children to the school’s PPO. They can’t afford that so the children are uninsured. When they go to the exchange they are disqualified for tax credits and must purchase heavily mandated HMO with a $6,850 deductible with AFTER TAX DOLLARS. They can’t afford that either so they are uninsured. YOU think they should have a larger IRS penalty. Do you purchase your insurance with after tax dollars?

          You say mandating health insurance in the land of the free is just sound insurance practice. Are you absolutely sure your brain circuitry is actually turned ON? You sound like Mitt Romney who was bought off by the Blue Cross Foundation to extend their monopoly with employer-based health insurance. YOU didn’t say anything negative about employer-based health insurance so I question you being a conservative at all.

    • Bart I. says:

      Bob, an addition to your point (a) is that even when employees pay a significant part of the premium or are aware of its cost in terms of lost wages, the employer tax exclusion brings the effective cost down to roughly that of a comparable underwritten policy.

      • Ron Greiner says:

        Bart, That’s why we have to stop this discrimination NOW. It’s the same across the Nation, medically underwriting policies discrimination. The way we do it is with a brand new Republican President and age-based tax credits for the purchase of health insurance of your choice.

        Then Blue Cross Inc. will have a tear in their beer with the destruction of their industry, employer-based health insurance. It’s been a long TIME coming.

        • Bart I says:

          Ron, what is your justification for tax credits for underwritten policies? It seems to me that if you want to go with market rates, go with market rates.

          • Ron Greiner says:

            Bart, thank GOD you are not running for President with your faulty stinkin’ thinkin’. I say medically underwritten policies are 1/3 the cost of over-priced dangerous employer-based health insurance so let the uninsured have them. Have a heart Bart.

            We can’t have 100 insurance companies available for the consumer in 10 years unless we bring back FREEDOM in America with actuarial sound – cheap, cheap, cheap – medically underwritten policies. Nobody wants to sell “insurance” to a person who is currently undergoing treatment for cancer at MD Anderson. Plus, Blue Cross Inc. has fired all of their medical underwriters so they won’t be able to adapt and soon they will be just a very bad memory of the pea-pickin’-past, and that’s a good thing.

            Bart, competition is critical in Free and Open Markets. I thought you knew that.

          • Bart I. says:

            Ron, I’m totally in favor of ending the PPACA prohibition on underwritten policies. But you still haven’t explained why tax credits are needed to sell them.

            Going with your statement, underwritten policies are about 1/3 the cost of employer-based insurance. But the employer exclusion only reduces the net cost of those plans by about 40%.

            An employer plan that costs 3x as much, discounted by 40%, would still be 1.8x as expensive as your underwritten plan. It seems to me your underwritten plans should have no problem competing.

            • Ron Greiner says:

              The numbers can really get crazy Bart. In Indiana the poor taxpayers are paying $33,000 a year for State employees with family coverage to those blood suckers Blue Cross Inc. This could be a 30-year-old male and a child because anything other than a single is charged at family rates.

              My medically underwritten PPO for a 30-year-old male and child is $146 a month or $1,752 a year. I don’t think the Feds should lose Payroll and Income tax on $33,000 just to help those blood suckers, Blue Cross. The State loses income tax too. The Feds lose $10,000 with the employer exclusion so they should cough up a $2,500 tax credit and save $7,500 and call it a day. The employee gets FREE insurance that costs $1,752 and $748 is deposited into his tax-free HSA to save or spend.

              Most importantly the employers cost drops to ZERO. Republican healthcare Reform will lift the heavy burden of health insurance off the back of America’s employers and the economy will soar like never before.

              Tax credits is the price we pay to kill the Blood Suckers, Blue Cross Inc.

  11. Jimbino says:

    Hertz and Reinhardt:

    I am a male non-believer in insurance of every kind. I have managed to avoid employer-sponsored insurance by working on a 1099 or W-2 “non-benefited” basis earning an hourly wage roughly double that of the employer-insured colleague. In any case, the “community rating” never affected me.

    Paying cash for medical and dental care, usually overseas, allows me to find cheap, decent care with an almost infinite network, while avoiding the usual 20% hit on the insurance premium dollar in addition to what I would pay to cover pregnancy and the long-lived women.

    Folks need to keep pointing out that by a simple arrangement of your withholding, you can avoid any possibility of having to pay the Obamacare penalty for not being covered.

  12. Devon Herrick says:

    Over the years I’ve traveled to speak at conferences and debates. One thing that both liberals and conservatives always seemed to agree on at those debates (at least in principle) is that people need to bear more responsibility for bad behaviors and participate in prevention. Yet, that’s where the debate ends. The only bad behavior that enrollees can be penalized for is smoking (and getting old).

    For instance, I am not rewarded for going to the gym, keeping my blood pressure in check; watching my weight and cholesterol.

    • Ron Greiner says:

      It’s pretty sad that a 30-year-old cigar smoking guy is singled out to pay a higher premium yet some babe who is 5’2″ and tips the scales at 320 lbs is not.

      I used to tell these over-weight women that as soon as they got down to 288 lbs they could get insurance and then they could have desert because once they are on insurance then they can gain their weight back and keep the insurance.

      Or I would say, “It’s not that you are over-weight – you are just 2 feet too short.”

      • Devon Herrick says:

        “It’s pretty sad that a 30-year-old cigar smoking guy is singled out to pay a higher premium…”

        As I understand it, it’s only the older smokers paying higher premiums. I recall two years ago there was a hubbub when health plans didn’t want to charge young smokers more, because young smokers don’t necessarily have health issues (tobacco or other). It’s the guys who enter late middle-age with 500,000 cigarettes pumped through their lungs who begin to experience the negative effects. The exchanges were not programed to allow a difference in premiums of 4.5:1 for old smokers versus young smokers.

        • Ron Greiner says:

          Devon, in the Dallas zip code 57201 a 30-year-old male’s premium is $226/month for a non-smoker from Blue Cross and a smoker is $256/month with their cheapest plan.

          Blue Cross charges a non-smoking 64-year-old $596/month and a smoker $766/month.

          But, Molina charges the same price for smokers and non-smokers, isn’t that odd?

          TIME Insurance rated smokers up 40% across the board no matter what age they were in the days before Obamacare.

      • Bart I. says:

        I used to tell these over-weight women that as soon as they got down to 288 lbs they could get insurance and then they could have desert because once they are on insurance then they can gain their weight back and keep the insurance.

        Or I would say, “It’s not that you are over-weight – you are just 2 feet too short.”

        I would like to have seen the reactions. I’ll bet they would make good TV.

  13. Jon Schwartz says:

    I disagree to some degree..there are cost controls designed in Obamacare…it’s called rationing and is done under the guise of “pathways’, ‘best practices’, ‘guidelines”,”IPAB” and eventually ‘quality of years adjusted’ to name a few…all legal…all done ‘in the name of the people’ but all involved centralized control over the patients life…all immoral…….unfortunately, the ‘savings’ go to the government and their insurance company cronies and not individuals whose premiums continue to rise……..there can be no moral cost containment until the patient is empowered to make decisions for themselves and their family..it’s called ‘the free market’……..It’s called freedom but those with the power will hear nothing of it because it disempowers the system over the individual and empowers the individual over the system which is how it should be……

    • Richard says:

      Jon Schwartz December 8th comments on this article were the exception to my critical commentary. He addressed the issues of morality and liberty and free markets—issues that must be at the center of our discussions and our actions if liberty is to be restored. I failed to give him the credit his fine comment deserved.

      • Ron Greiner says:

        Richard, you said no comments on this article discussed FREEDOM except now you say Jon Schwartz is the only exception. Let me cut and past what I said above:

        “We can’t have 100 insurance companies available for the consumer in 10 years unless we bring back FREEDOM in America with actuarial sound – cheap, cheap, cheap – medically underwritten policies.”

        This means Free Markets, Competition and FREEDOM so maybe you should read the comments before you say we are all lazy brainwashed Socialists.

        We all know that competition is critical in free and open markets.

        • Richard says:

          Ron, your response to me indicates that you are a staunch advocate of liberty. Please note that I did not say that none of the comments discussed “freedom”. My comments were much more nuanced than that. Yes, you did indeed use the words “freedom in America,” but they were limited to the context of the need for provision of low-cost actuarially sound medically underwritten policies to foster the existence of 100 insurance companies in 10 years. That statement did not seem to me to constitute advocacy of free markets, competition, and freedom in general, although you may have assumed that an industry with such characteristics would require those conditions.

          But in fact, such fostering of private industry can occur (and has occurred in the past) in nations with fascist economies (systems with ostensibly private markets operating in a political system of discretionary total government power to control those markets–whether that power is fully exercised or not). That economic system has been labelled “capitalistic collectivism” and “participatory fascism” in the literature. That definition is indeed an accurate description of America’s political-economic system in the late 20th and early 21st century. In fact, the entire Obamacare system is an example of economic fascism, and we are likely see that system move inexorably into civil liberties as citizens attempt some level of resistance.

          But I appreciate and applaud your stated passion for free and open markets. While you know the importance of free and open markets, in my view that knowledge was not apparent with the other commenters except for Jon Schwartz.

          • Jon Schwartz says:

            Richard-thank you for your kind comments. i would like to communicate with you more as your writing is quite eloquent and passionate for freedom.

            • Richard says:

              I asked the webmaster to release my e-mail address to you. I don’t know if he or she will do it. Otherwise, I don’t know how to send you my e-mail address without disclosing it publicly to the whole forum.

  14. Richard says:

    The comments following this article on Obamacare show how far our nation has descended into acceptance of statism, acceptance of the view that the individual is a creature of the state, and acceptance of the view that personal autonomy is legitimately sacrificed for the collectivity when it comes to health care. Liberty being a “public good” is undervalued and everyone is “free-riding” on its existence–hoping that someone else will pay the cost of its defense. No discussion ensued here of the psychological and actual control over the lives of individuals resulting from federal control over health care and health insurance and the vast centralized databases being established. Such control, of course, has no market or market valuation, so its cost is not discussed. And no discussion ensued here about completely deregulating insurance and health care delivery –regulation between states that amount to trade barriers, regulation by the federal government, regulation preventing innovation, regulation eliminating the right of individuals to free contract. The governments, those who feed off them, and the ideologues of collectivism have captured the entire health care discussion, channeling it to selection between various choices, each one further implementing their agenda. Gone is the gut-level defense of individual liberty and the rights of Man. Gone is the moral defense of capitalism and limited government. This discussion has been like so many articles published by NCPA—nibbling around the edges of statism, recommending little changes here and there but clearly capitulating to the conquest of liberty that has occurred over the past 100 years. If these are our defenders of liberty, I tremble for the future of our nation.

    • Jon Schwartz says:


      as was so elegantly stated by the first purveyor the modern efficiency state and also by Hilary:

      Das Whohl des Staates uberwieght die Rechte des einzelnen.