Scott Allan's World

The most common statistic used by the Universal Health Care proponents is that there are 47 million uninsured Americans. That is an alarming statistic seeing that there are only about 304 million American citiizens and only 228 million over the age of 18. It does not seem realistic that the number is that high. There are arguments by Mark Levin in his #1 bestseller “Liberty and Tyranny” that of the 47 million, 9 million are not U.S. citizens, 17 million make over $50,000 per year, and 50% of all non-elderly adults regain lost health insurance within four months making the actual number of those needing government assistance much lower.

Let’s agree that numbers can always be manipulated to fit any argument and that the high numbers are probably inflated for political purposes. However, let’s take the worst case scenario of 47 million and calculate what the cost should be to insure these people. For simplicity sake, I got a quote for Individual Coverage at the Blue Cross and Blue Shield of Alabama web site. They ranged from $165 to $242 per month for a 40 year old person. Let’s round up to $250/month to work with a nice number and provide excellent coverage. Now keep in mind that many of these people would qualify for savings under family plans and group rates also receive discounts and this would be one heck of a group. However we are just going to calculate the absolute maximum this should cost putting every man, woman, and child, citizen or not, on their own individual, top of the line plan.

47 million people x $250/month x 12 months = $141 billion/year.

Over a 10 year period that cost would be $1.4 Trillion dollars.

That sounds a lot like the original $1.3 Trillion estimate we heard from the Obama administration. Just today, the Kennedy/Dodd plan was announced at $611 billion over 10 years. Excuse me if I find both these numbers to be dubious. It feels like the old bait and switch. Whenever government gets involved, the cost of administration and waste is astronomical. If a private company underestimates its costs, it goes out of business. If a government underestimates its costs, whether to purposely mislead or just through incompetence, it just spends more to make up the difference.

As Reagan pointed out in his 1964 speech “A Time for Choosing” the government spent $4,600 per family to send each family a $600 welfare check. “It would seem that someplace there must be some overhead.”. Those overhead costs would most certainly be much smaller in a private company like Blue Cross and Blue Shield of Alabama who must rely on competition for premiums and negotiations with physicians to make a profit rather than rely an endless supply of taxpayer dollars. I would say take the estimate from a private company and triple it and that might be a conservative estimate for the cost of a government run program.

Obama keeps insisting this system will be a combination of private and public insurers, that you will be able to keep your private insurance. If I owned a business and I saw that the government would insure my employees, I would dump costly private insurance in an instant especially during a struggling economy. I would expect that every business would do this as well. This would ultimately end in a Single Payer government monopoly system which would be a nightmare in terms of cost, waste, and health care rationing. Insuring 47 million suddenly seems cheap compared to having to insure all 304 million people.

How can this be prevented? Perhaps the government could only offer catastrophic health care coverage which would be tremendously cheaper and employers could still offer more comprehensive coverage to attract employees. Or the government could compel employers to offer health care coverage to all employees. This of course would result higher unemployment and inflation since many small businesses simply cannot afford this.

It is generally agreed by sane people that competition drives down prices and that government is incredibly inefficient and wasteful. The best solution is one that allows private insurers to compete for the business of 47 million (if that) new customers. Give me your best offer on 10 years of coverage and you will win the business. Offer basic HMO type coverage that focuses on prevention and managing costs with high deductibles and co-pays to discourage frivolous visits and we will save a ton. The government could offer vouchers to allow people to choose their own private insurer.

Also don’t forget there are about 300,000 physicians in this country. How long do you have to wait for an appointment or emergency room care now? Now imagine how long the wait will be when 47 million more people suddenly have affordable health care. Don’t forget that many people may forgo a career in medicine once government gets control of rationing and reimbursement. It will hardly seem worth the investment in time and money to go to medical school. How will we handle to the impending doctor shortage? Has anyone thought of this?