Why the Affordable Care Act (Obamacare) will fail

The observed and stated concern was simply that health care in the United States was so expensive that some people could not afford it, and some people were being denied health care insurance.  It will not succeed because it does not fix either problem.

When we think about the cost of health care in the United States, we can see quite a large number of factors involved.  Though they have no particular order, some of them are the AMA, Insurance Companies, the profit motives of hospitals and private clinics, and State and Federal Regulators.  Indeed, if closely examined, one particular factor stands out – Insurance Companies.  The Insurance Companies insure hospitals against loss and damages, they insure individual medical doctors against malpractice lawsuits, they insure individuals against illness – every where you turn, there are Insurance Companies holding out their hands for another piece of the pie.  But, what do they give back in return?

The concept of insurance is supposed to be fairly straight forward.  An individual contracts with an insurance company for protection against an established risk, and pays fees on a regular basis to maintain the protection offered.  If the risk does manifest, the individual files a claim with the insurance provider, who is supposed to then issue a check for the agreed amount of coverage.  That was how it originally worked, but it no longer does.  At least, not in the United States.

The modern way for insurance to work is this:  an individual contracts with an insurance company for protection against risk.  Then the insurance company salts the contract with a few dozen exemptions and limitations to coverage, and tacks on co-pays and both annual and life-time payout limitations.  Although the limitations exist prior to signing the contract, the insurance company rushes the individual through the contract process so quickly that they honestly don’t have time to absorb it all.  However, the net result is that in most years, the individual is stuck not only paying the monthly fee for protection, but also about 80% of the cost of their own care, out of their own pocket.  In other words, the insurance companies are parasites, because the individual would be better off paying the full fee up front than paying for insurance coverage.  To add insult to injury, most insurance companies don’t even meet their obligations when it comes to catastrophic loss.  If a person has a massive injury or gets cancer, the insurance company will deny the claim outright or cancel the policy, then force you to fight them in court for the money they contracted to pay you.  So, the ACA can not succeed at driving down costs by adding more layers to the process.  More layers equals more mouths to feed – more parasites sucking the life out of the system and driving costs up.

This is why I advocate for a health care system focused on the maintenance of health instead of the treatment of disease.  If we change the focus in that way, the only people involved in the cycle are the doctor and patient until a catastrophic injury happens.

As things stand right now, every smart physician should have 2 fee schedules.  One is the fee they charge to people who use insurance companies, and the other is the fee they charge to people who pay cash.  My prediction is that the fee to cash paying patients would be substantially lower, because the doctor does not need additional staff to process insurance claims, and saves time.  Also, many doctors are now finding that to do business with the insurance companies, they are being forced to purchase specialized computer software to process the claims, which they get from 3rd party vendors at a significant expense, that also affects my prediction about the savings for cash payments.  When enough people, and doctors, see the savings of not using any form of health insurance, my prediction is most of the health insurance providers will be put out of business, and the US Government will lose interest in taking over a dying industry.  Especially if Congress preemptively passes legislation to prevent the government from offering corporate welfare (bailouts) to shore up the industry.


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