Obama's Speech 09-09-09
In a historic speech on the evening of September 9, 2009, President Obama addressed a joint house of Congress and millions watching on television around the world. Here is some of what he said followed by a real world, literal translation:
"There are now more than 30 million Americans who cannot get coverage." Translation: I know I used a higher number a few months ago, and especially in my campaign speeches, something like 45 million or 47 million, but recently I have been made aware of an inconvenient fact that many of those folks are likely covered by some of our other soon to be bankrupt government programs, or they make a lot of money and just decide to spend it on other things, or maybe they drove in from south of Texas, or maybe they are just young and don't get sick. But that number is really 30 million plus, give or take a few non-US citizens. FACT: According to a recent Blue Cross Blue Shield of Tennessee report, citing the US Census Bureau Population survey, 44.8 million people, or 15.3% of the total population were without health insurance in 2005. In another report in cooperation with Actuarial Research Corporation, it was discovered that over half of these individuals were eligible for other public assistance programs but may not be able to afford coverage, one-forth are reachable through public programs under current rules, such as Medicaid and SCHIP. It further showed that 74% of all uninsured children are eligible but unenrolled in public programs. And one-fifth earn relatively higher incomes, more than $75,000 annually, and may be able to afford coverage on their own.
"More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pat the full cost of care. It happens every day." Translation: Insurance companies should be forced to pay claims even if someones falsifies a legal document and does not tell the truth. Further, the insurance company should pay 100% of the cost of care even though the individual who purchased the product was told exactly what was covered and received a legal document explaining that coverage in detail. FACT: All fully insured products are licensed by each individual state. The people who sell those products are licensed by each individual state. Each state is responsible for adherence to specific rules and regulations. If an insurance company or their representative is falsely representing a product they will be fined and in most cases the Representative will lose their license. Self-funded plans are regulated by the federal government. Both state and federally regulated plans have several additional regulations that they must abide by that have been passed in the last decade that add tremendous cost to health insurance premiums.
"Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover." Translation: The ultimate goal of all insurance companies is profit and finding ways to not pay claims. FACT: Most states regulate insurance company claims procedures and payment deadlines. Insurance companies who write larger risks most often include "performance guarantees" in their contracts that penalize them if they do not pay over 95% of claims in a timely fashion and according to the benefit schedule. Insurance company's have, since the early 1930s, underwritten business according to health and age conditions. This is to make insurance affordable for the majority of individuals. Later in his speech the President compares requiring people to buy health insurance to requiring auto insurance. What he did not say was that auto insurers underwrite those required policies according to driving records, age, gender, and the condition of the car. If the federal government decided to mandate that everyone have auto insurance and that it did not matter if you had three DUI's and were driving a car with no brakes, rates for auto insurance would also be unaffordable and the federal government would then have another opportunity to fund that program.
"Others are self-employed, and can't afford it (insurance), since buying insurance on your own costs you three times as much as the coverage you get from your employer." Translation: I haven't really checked into this but if you are self employed you probably don't make a lot of money and I think the coverage would cost you three times as much as you would pay if you were employed by a company that provided health care benefits, but you are self employed so I guess this example really doesn't apply to you. FACT: Many individual policies, depending on age and health, are much less expensive than most employer provided plans. Many self employed individuals average $45,000 a year, well within a salary that could afford insurance (Statistic provided by PayScale Data-Seattle, Washington)
"When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid." Translation: I'm not letting insurance companies off the hook here, but health care costs, not insurance company rates, have grown so fast that it has placed more pressure on the federal government to pay less and less to doctors and hospitals for what they do for Medicare and Medicaid patients. We know we can get by with this because the commercial, private insurance companies continue to pick up what we want pay. I know that doesn't make sense with my proposal to force the private market out of business, but we can work out those details as we go. Trust me. FACT: In an article by Alan B. Miller, chairman and CEO of Universal Health Systems, Inc, in the August 12, 2009 issue of the Wall Street Journal, cites that, according to the Medicare Payment Advisory Commission (MedPac), that in 2007 hospitals receive only 94.1 cents of every dollar expended on Medicare patients. That number is expected to drop to 93.1 cents in 2009. This 7% shortfall is funded entirely by commercial private insurance patients. Those increased costs are then passed back to private patients through higher premiums. In short the commercial, private sector is subsidizing Medicare and Medicaid, not the other way around. Mr. Miller goes on to say, "If hospitals had to rely solely on Medicare reimbursements for operating revenue, as would occur under a single-payer system, many hospitals would be forced to eliminate services, cut investments in advanced medical technology, reduce the number of nurses and other employees, and provide less care for the patients they serve. And with the government in control, Americans eventually will see rationing, the denial of high-priced drugs and sophisticated procedures, and long waits for care."
"Since health care represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn't, rather than try to build an entirely new system from scratch." Translation: What he just said but add the following to the last sentence...for now." FACT: In the second presidential debate on October 7, 2008 the candidates were asked the following question; Is health care in America a privilege, a right, or a responsibility? Obama answered, "Well, I think it should be a right for every American. In a country as wealthy as ours, for us to have people who are going bankrupt because they can’t pay their medical bills--for my mother to die of cancer at the age of 53 and have to spend the last months of her life in the hospital room arguing with insurance companies because they’re saying that this may be a pre-existing condition and they don’t have to pay her treatment, there’s something fundamentally wrong about that." If health care is a right, it is also going to have to be nationalized.
"Let me repeat this: nothing in our plan requires you to change what you have." Translation: Now, again, I know this might be confusing, but trust me, we will work out the details on this. Although I will require insurance companies to except risk that they do not now accept or rate for, and although I will require them to adhere to the standards that I am setting up for the Public Pl...I mean the exchange, doggone it, I mean the cooperative, you will absolutely not have to change or give up any coverage you now have, or doctor you may be currently seeing, as long as the insurance company decides to stay in business and the doctor continues to stay in practice instead of going back to school and becoming a vet. Fact: Winter Haven, Fla., JANUARY, 27, 2009 – State Farm Florida Insurance Company (State Farm Florida), the state’s largest private property insurer, today filed plans to discontinue its Florida property insurance product lines. The Company cited its substantially weakened financial position, directly related to its inability to obtain regulatory approval of what it believes to be adequate property insurance rates. Source:TampaBay.com. If you think property and casualty insurance companies are any different check this out. Due to regulation the state of Alabama has one carrier that writes 90 percent of the coverage in the state. The government can require insurance companies to do certain things. The one thing the government cannot do is make them write business.
"We will do this by creating a new insurance exchange - a marketplace where individuals and small business will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It's how everyone in Congress gets affordable insurance. And it's time to give every American the same opportunity that we've given ourselves." Translation: Bigger is cheaper in purchasing healthcare. FACT: There may be two or three exchanges that have worked on a moderate scale but there is not a significant number that would justify using that format to reduce prices. Two of the most public examples are Massachusetts and California. In an article in the LA Times written by Michael Hiltzik, September 14, 2009, outlines what happened to such an effort in California and why it failed. In testimony in front of the Pennsylvania Legislature, Thomas Traylor, VP of Federal and State Programs at the Boston Medical Center, made the following comment, "Boston Medical Center is currently in a crisis situation due to the funding flaws in the design of the Massachusetts Health Care Reform. The net impact to BMC is a reduced payment rate of $ .64 for each dollar of cost resulting in a $175 million deficit for fiscal year 2010 and beyond. This problem is now being addressed by Governor Deval Patrick's administration but, without appropriate resolution, will seriously jeopardize BMC's ability to survive and to provide care to the very individuals health care reform was intended to benefit. Larger is not cheaper in healthcare costs. There are too many cost drivers involved. If larger was cheaper General Motors should have had the cheapest insurance available, even considering the richness of the benefit. It wasn't cheaper. This is a hollow argument proposed because it sells to those who are looking for a "free" ride.
"And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. ...That's why under my plan, individuals will be required to carry basic health insurance - just as most states require you to carry auto insurance." Translation: I repeat and want to make this very clear - I will not raise the taxes on the middle class. However, if you don't agree to do what I say, your actions make my actions non-binding and I will tax you...I mean charge you a fee to make you wish you had allowed the federal government to dictate what you buy. Apparently, there is no underwriting on auto insurance in those states that demand that you carry auto insurance, there can't be. Can there? FACT: Yes Mr. President, there is a Santa Clause, but he doesn't sell auto insurance. Not only is there individual underwriting in those states that require auto insurance, but there is also about 15% of the states population that does not carry it, even with the penalties. Why, they have figured out how to beat the system. Please read the article published by American Thinker, September 24, 2009.
"My guiding principle is, and always has been, that consumers do better when there is choice and competition. Unfortunately, in 34 states, 75 percent is (insurance) controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. Without competition, the price of insurance goes up and quality goes down. And it makes it easier for insurance companies to treat their customers badly - by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates." Translation: Since the insurance companies could not compete with Blue Cross, then the government will. I promise. Fact: See the attached article from the Wall Street Journal written by Scott Harrington, page two, fifth paragraph. 'Nuf said.
Summary: Perhaps the most egregious statements were in mentioning two sad stories about people who were victims of insurance company tyranny. Please see the same article as mentioned above by Scott Harrington. It is important to note that nothing is said in this speech about the cost of care until the bill reaches the insurance company. Everyone involved from the incurring of the cost to the time the bill is presented for payment by the insurance company gets a free ride. This, is the problem with the problem.