CDZ 1. Thoughts on National Health "Insurance"

jwoodie

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Insurance is a vehicle through which a large number of people can share risk in return for a proportionate contribution to a fund set aside for that purpose. The ACA plan mimics health insurance in form, but not in substance because it does not require people t o pay their proportionate share of the costs associated with the health care provided. Instead, it requires some people to pay a disproportionate share of these costs while others pay little or nothing because of government "subsidies." This means that the ACA is not really health "insurance" because it lacks the essential element of shared risk.

Why is this important? Because it is actually a new government "entitlement" which has been disguised as a legitimate insurance plan with ridiculously low premiums for people of modest incomes. As a result, they will be convinced that they are paying for this coverage even though it is actuarially unsound in the extreme. Even when the real cost of this program becomes apparent, these people will resist any attempt to curtail coverage or increase premiums, since they feel they are already paying their fair share.

The consequences of this political shell game will be enormous. We will find ourselves with uncontrollable costs and no way to fund them except for increased borrowing. With Social Security and Medicare already on unsustainable trajectories, the additional economic burden created by the ACA will be catastrophic. What will happen politically when we are faced with the inevitable decline in our standard of living?
 

PratchettFan

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Insurance is a vehicle through which a large number of people can share risk in return for a proportionate contribution to a fund set aside for that purpose. The ACA plan mimics health insurance in form, but not in substance because it does not require people t o pay their proportionate share of the costs associated with the health care provided. Instead, it requires some people to pay a disproportionate share of these costs while others pay little or nothing because of government "subsidies." This means that the ACA is not really health "insurance" because it lacks the essential element of shared risk.

Why is this important? Because it is actually a new government "entitlement" which has been disguised as a legitimate insurance plan with ridiculously low premiums for people of modest incomes. As a result, they will be convinced that they are paying for this coverage even though it is actuarially unsound in the extreme. Even when the real cost of this program becomes apparent, these people will resist any attempt to curtail coverage or increase premiums, since they feel they are already paying their fair share.

The consequences of this political shell game will be enormous. We will find ourselves with uncontrollable costs and no way to fund them except for increased borrowing. With Social Security and Medicare already on unsustainable trajectories, the additional economic burden created by the ACA will be catastrophic. What will happen politically when we are faced with the inevitable decline in our standard of living?
The ACA is a hybrid because getting a full national program was not going to fly. If you think having such a program destroys a standard of living, I suggest you visit any other first world nation.
 
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jwoodie

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The ACA is a hybrid because getting a full national program was not going to fly. If you think having such a program destroys a standard of living, I suggest you visit any other first world nation.
Which "other first world nation" has this type of system?
 

PratchettFan

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The ACA is a hybrid because getting a full national program was not going to fly. If you think having such a program destroys a standard of living, I suggest you visit any other first world nation.
Which "other first world nation" has this type of system?
None. They have national health care. I was not clear in my post. I meant moving to a full national system would not destroy our standard of living. Of course, neither is ACA. It just doesn't go far enough.
 

iamwhatiseem

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LIke I have said 1000 time here and everywhere,,,,any plan that has a deductible of $6-$7000 per individual, cost $1200 per month and is a 60/40 plan is NOT health insurance. It is a donation.
 
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jwoodie

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moving to a full national system would not destroy our standard of living. Of course, neither is ACA. It just doesn't go far enough.
The ACA is the worst of all worlds. It enshrines universal "health insurance" as an ultimate goal rather than universal health care. Most people view insurance as an expense that can only be recouped through excessive claims utilization. With the cheerful cooperation of the health care industry, this is why health care is so expensive in the U.S.

As with Social Security, people will now believe that they have "paid for" a future benefit which cannot be taken away from them. As a result, health insurance will become another "third rail" in politics which is immune from serious fiscal reform. A properly funded national health care system would have been better, but the ACA is making that much less likely alternative.
 

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