Friday, May 22, 2009

Do the Math

A personal story illustrates very clearly why the attraction of a single-payer health care care system is irresistible. When our first child was born my wife and I decided that we would both share the child-care responsibilities. Since I had been freelancing for nearly a decade, it was easy for me to arrange my schedule and still hold up my end of the bargain.

For Maureen the decision was far more complex. She was entitled to child-care leave, but with the associated loss of income and benefits we would have to arrange our life in ways that reflected our new circumstances.

It turned out to be easier than we had anticipated.

Spurred on by the external motivation of having our income halved and the arrival of our second child, my career flourished. And fueled by the internet revolution the ranks of independent contractors and consultants swelled, leading also to an expansion of services and benefit plans aimed at freelancers.

In the area of health care we were faced with a choice. We could cover our family's medical risks with a comprehensive COBRA plan priced at $650 per month or we could design our own plan from the menu of offerings available through the major insurance providers.

We chose the latter option at a price of $196 per month.

Here are the details.

Under the COBRA plan all of our medical expenses would be covered, minus deductibles and co-pays.

Under our plan each family member was subject to a $2,000 deductible with a family deductible of $4,000. After we reached those thresholds all of our medical expenses would be covered.

So let's make a quick cocktail napkin analysis.

Under our plan, the most we could be on the hook for in a worst-case scenario was the $2,352 premium payment plus the $4,000 out of pocket deductible for a grand total of $6,352. In reality, we wrote a check whenever Matt saw the pediatrician and our expenses for that first year topped out at less than $2,800.

Compare this to the best-case scenario under the COBRA. Let's say that none of us got sick or had to go to the doctor. Our premium payments alone would have amounted to $7,800. Add to this the deductibles and co-pays involved had we incurred the hypothetical $4,000 in medical expenses and the total would have topped $9,000.

Our choice was easy and many other New York freelancers made similar choices.

But here in the Empire State CHOICE is a four-letter word, except in a very narrow context. Empire Blue Cross/Blue Shield along with the civil service unions and public policy advocates went in front of our state legislature and LIED, LIED, LIED!

Challenged by an aggressive new group of competitors and facing massive market-share erosion most businesses would seek ways to upgrade their offering, improve their service and reduce their costs.

But no. Empire Blue Cross and other non-profit insurers went crying to the government.

They misrepresented their finances with bogus financial documents.

Civil service unions predicted that New Yorkers would die in emergency rooms if non-profits were forced to compete with the more flexible benefit plans.

Public policy experts described holders of high-deductible plans, like ours, as the growing number of under-insured, forced into inferior plans by dire circumstances or duped by unscrupulous insurance salesmen.

Once again the experts contended that Americans were simply too stupid to make their own decisions.

If given a state-sanctioned monopoly, the non-profits promised to provide better coverage at lower premiums.

So, with no other choice, we were forced into a comprehensive benefits plan. The premium by this time ballooned to more than $700 per month and by the time Maureen went back to work four years later we were paying $980 each month for comprehensive benefits we didn't want and didn't need. So much for promises.

When it became clear that the New York State legislature had formulated their new regulations based on lies, deceit and corruption, I asked our State Senator if there was any possibility that the state would revisit the issue.

"No chance," came his reply.

Graft has momentum and the fruits of graft are so great that individual liberty stands little chance against a stampeding herd of parasites. But there's another dynamic in play. One that's far more insidious: Willful ignorance and the voluntary surrender to constant, relentless propaganda. When describing our chosen medical plan to friends and relatives, they were horrified.

"You mean... you have to pay to go to the doctor?"

"Well, yes, but we only pay $196 per month and if anyone gets seriously ill we don't have to worry about being bankrupted by medical bills."

"Yeah, but, you have to pay to go to the doctor!"

And that's the attraction of a single-payer health care system: Nobody has to pay to go to the doctor.

You can do the math. Run the numbers. Explain the pros and cons, but it's useless because for the vast majority of today's citizens the Canadian model is perfect.

Put simply, in Canada nobody has to go through the humiliation of paying for a doctor's visit, but seriously ill Canadians wait eight months or more for cancer surgery.

So when Hillary Clinton, Howard Dean, Barack Obama or the simpleton who chooses to pay for Starbuck's coffee while waiting for someone else to pick up the tab for health insurance speaks of universal coverage ask this question:

Coverage for what?

The truth is that when health-care bureaucrats and public policy experts refer to cost containment what they really they mean is rationing of the most expensive medical treatments and procedures.

Just as in Canada, the bureaucrats will be happy to provide low-cost services for people who aren't sick, then ration acute care so that by the time the patient's treatment is approved, they're already dead.

That's what I call compassion.

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