Health Care Reform

Thank you Mr. Obama for spending as much money as possible to try to get our economy back on track. I know that because your the good Democrat that you are, that you want to play Robin Hood and take some money from the rich and give it to the poor. That's all fine and dandy as long as you don't take so much that the rich stop working (they are rich for a reason... their smart), and that you give it to the "deserving" poor. I want to make sure that you have some language in your proposals that require the recipients of your handouts to be contributing members of society.

On Health care:

Your new health care proposal reportedly will cost us over the next 10 years over 1 trillion dollars. That is about 8% of the currently expanding deficit. According to a study by Health Affairs, by 2010, absent of any policy, the amount of uninsured Americans will reach 52 million. With the Obama administrations new policy that number is projected to be reduced to about 36 million. Assuming these numbers, were talking about a cost per uninsured person of about $62,500. This estimate is most likely underestimated. It already takes into account the number of people who are already insured in the private market who will take advantage of the new subsidies and go Government. Maybe I should talk a little about what the new policy is going to do.

The gist of this new policy is that is takes taxpayer money and subsidises the cost of health insurance to anyone enrolled in it. Those who's income is above the poverty level, even those who's income is slightly below that level, are going to be charged a small premium set by the Treasury. Preliminary estimates are $100 per person, I assume that is per month. Those with an income of 150% below the federal poverty level will not have to pay any premium. Although it is not yet included, the consensus is that the House will add a clause into the bill that will require participation by all US residents, and those who elect not to participate will be financially penalized.

With that said, let me talk a little about how the health care system works.
1) Doctors provide a service
2) They charge for that service
3) The recipients must pay for that service

The money has to come from somewhere. In the current case, those who are uninsured and unable to afford the services are getting it somewhere. Those costs are getting redistributed to the paying customers in the form of higher overall costs. Obama and his team of merry men want to take money from the tax pool to offset this cost to the general public. When it's put this way, it sounds great, but how will it actually work? First I think we need to see how much the actual overall costs will be reduced by insuring everyone. Insurance theory along with empirical evidence shows that when you insure everyone, the individual cost of insurance decreases. So with this new pool of money available to pay for the health care of the poor, how much will the cost of a doctors visit be reduced? How much will a procedure in the emergency room be reduced?
The numbers above and in here, where I got a lot of my information, are for the next 10 years, however, this program will be around (knowing the government) for many more than 10 years. Where will the money come from when a Republican is elected into office? Looking a little different already...

That's all I have right now.

I'll leave with this,

Obama's request that the health care industry should cut costs is a good idea, but tough without government regulation and oversight. The end goal is to lower the average percentage of income spent on healthcare while maintaining it's quality and advancement. If this was possible market forces would dictate that it would be happening. However I think the insurance industry is creating an innefficiency.