Christian Community Networking

  By Ramon Roane

This weekend one of the most important piece of legislation is expected to be voted on. President Obama’s campaign mode is in overdrive with his push for healthcare. I would like to give my opinion on the matter. Honestly, there is very little I do agree on with this administration and I thought I would never being saying that after President Bush! I want you all to hear me out.

I would like to say that I am all for reforming our healthcare system, but I think we really need to look at all options before taking over 1/6 of our economy. I can’t think of one effective government program that is efficient, besides the military. This administration’s track record on efficiency grades a “C minus” at best. Obama’s closing of Guantánamo Bay in the first year of his presidency, ending the war in Iraq after 16 months in office, and little used $787 billion Stimulus Package does not indicate good planning skills for the highest executive office of the free world. I would like for him to show a little wisdom.

Any business owner would tell you that reporting great profits at the same time lawmakers and advocacy groups are cheering for an overhaul of your industry doesn't make for great public relations. Recent positive third-quarter earnings reports by major health insurance companies may put them in the same boat, but do they really deserve to be there?

Insurance companies are not money trees. They got out into the market and buy health care services and resell those services at some markup at health care consumers. One would argue that markup is not that much, this whole notion of big horrible insurance companies is rather silly.

The healthcare insurance industry profits still represent a miniscule percentage of the $2.5 trillion Americans spend every year on health care. The insurance company profits in the large picture have very little to do with the overall rising cost of health care. The profit margins the health insurance companies report are often below 5 percent, pace some industries and lag behind many others, from a net margin basis, it's not that much. The bottom line is any business needs to make money. That's why you're in business. It's a mystery why health insurance gets vilified for that profitability.

For critics of the health insurance industry, of course, the vilification is no mystery at all. They point to practices such as cancelling coverage for some sick policyholders and allegations that companies sell expensive policies that cover surprisingly little. Health insurance companies are in a somewhat dirty business. They do a great deal of good by helping people to cover risks of serious illness. They also have obligations to their shareholders and they are not charities.

Under the current system, even if insurance companies managed to put an end to their worst practices, they would still have to continue other bottom-line driven strategies, such as charging higher premiums to older people who have been ill in the past. I know there are some insurers out there who are doing really egregious things, but it's the system that's the problem. Even if you got rid of the egregiously bad practices, you'd be stuck with what the companies have to do not to go bankrupt.

This legislation would, under threat of financial penalty, encourage more people to buy health insurance coverage. The healthy people who sign on as a result of such a plan would help companies compensate for the high costs they face for covering the sick.

But insurance companies themselves have come out against the House bill. The lobbying group America's Health Insurance Plans has argued that the bill, which stops insurers from denying coverage due to pre-existing conditions and limits age-related variations on premiums, will ultimately increase health insurance costs for American families.

Whether the reform bills become law insurance companies face a tough road in the months ahead.

The increase in Medicare and Medicaid rolls are posing additional challenges for the long term. The hospitals and other health care providers charge higher rates to privately-insured customers to compensate for the relatively low reimbursements paid by the government for consumers covered by Medicare and Medicaid. As more and more in the graying U.S. population enroll in Medicare, he said, that problem will grow worse.

This is a complex problem and we should really take much thought in solving it. Instead of focusing on the part of the industry that has only a 5% share of the market, why don’t we focus on the 95%? The healthcare real-estate trusts (firms that are basically the landlords for hospitals and healthcare facilities) take the lion’s share of the industry. They are the ones that control the cost that the insurance companies have to pay and then pass on to the consumer.

The bottom line is that Washington, D.C. should be truthful and transparent with the American people. Examine the industry has a hole and not just 5% of it. Slowdown on the Healthcare Decision.