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Sunday, November 10, 2013

ObamaCare (ACA) talking points



     ObamaCare health insurance will only work if healthy young people join.
     If that is true then why does Medicare work, all the participants are older, at least 65 years of age, still Medicare is working very well, Medicare premiums are lower, benefits are better and every retired person is covered. The answer is in the math, for Obamacare to work a large number of people need to sign up. As long as there are a large number of members it will work, all the members can be sick or well or any mixture of the two. Insurance is risk sharing by a large pool of members; actuarial science is often counter intuitive, as is true of most scientifically sound statistics.

     ObamaCare will change the American health care system.
     ObamaCare will certainly change the health insurance industry. The previous business model for the insurance corporation was simple, collect premiums, and then deny claims. The industry had developed a collection of highly profitable practices. Preexisting conditions, rescission (a legal method of undoing a contract), cherry picking by forced selling to employed citizens (did you really have any choice as an employee?), annual and life-time maximums, these are just some of the highly profitable health insurance business practices. The ACA law forbids or seriously restricts all these practices. The insurance industry will have to go back to the old fashion practice of actuarial science. The health insurance industry will remain profitable; the proof of this projection is visible everyday on the public stock market. I’ve profited by owning the Medicines Company (symbol MDCO) and Covidien PLC (symbol COV), and I still own shares of MDCO. For anyone claiming that the health care industry will be destroyed I will point to the world’s stock market exchanges, and then ask for proof of their claim judged against the open market’s evaluation. The stock markets are reacting to a free market health care system with government mandated rules. This is the same as car insurance or mortgage insurance. America will be the only example of this system; the other advanced nations have chosen true government run health care systems, with private insurance available on the margin.

     There will be shortages of Doctors and facilities.
     I guess all the Doctors are going to quite medicine and become welders, maybe hospitals will be converted to shopping malls, or maybe since we all have insurance, we will start grapping snakes with bare hands, or diving freeways in reverse. I can’t predict for certain but I think not. Any shortage of Doctors (or Engineers, or Car Mechanics) is due to an artificial shortage of educational opportunities.
I could easily go on and on about the politically motivated claims of the right wing, however the consistent theme is massive misinformation. This is a surprising paradox, the Tea Party types I know spend a lot of time informing themselves. They read a lot, they meet and discuss issues, and they profess commitment to logic and facts, so why are they so misinformed? This is a clear case of a self reinforcing believe system, they start with the answer then find “facts” to support their beliefs. This still leaves a paradox, the Tea Party types are generally intelligent, well educated and willing to study. I guess that with over 300 million Americans you can find a few hundred thousand of anything.

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