Tuesday, August 04, 2009

The Taliban, DeathCare, and Political Freedom

There has been another outbreak of pro-Taliban violence in the Moslem north. It all began with a group of "Nigerian Taliban" attacked a police station, apparently with the intention of stealing weapons and police equipment. The police defeated that attack, leaving 42 dead. More attacks against government buildings and Christians (churches and businesses), followed. The Islamic radicals belong to a group called Boko Haram (translates as "Western education is sinfull"), which is following in the footsteps of an earlier group called Al Sunna wal Jamma. But many young Nigerians, angry at the corruption and resulting economic malaise (and unemployment) have joined in the violence, and some light looting.

All this has happened before. The pro-Taliban Al Sunna wal Jamma group was founded five years ago by Moslem university students, apparently with some foreign money. But it was mostly just another expression of the Islamic radicalism that was becoming popular up north. This movement pushed the imposition of Sharia (Islamic) law in the north, as a means of dealing with the corruption in government, and society in general. Many northern states actually switched to Sharia law, but the corruption remained, now cloaked in Islamic rectitude. Thus the Islamic radical movements survived, but were unable to muster the armed strength to take on the police or army. The last flare up was in late 2007. Earlier that year, a northern newspaper editor had been caught taking $300,000 in payments from Sudanese sources, to publish pro-Islamic radical material. There have been few attempts by Islamic radicals to move into Nigeria, and all have failed so far. The government has generally ignored the religious activities of the "Nigerian Taliban", and their efforts to get people to live a righteous, austere, Moslem lifestyle. That don't really fly in Nigeria, much to the frustration of local Islamic radicals. An armed uprising in 2004 left several hundred dead, and the Nigerian Taliban broken, but not entirely destroyed. The current violence is their attempt at a comeback.

The fighting against the pro-Taliban radicals in the north continues, with over a hundred dead and many more wounded and arrested. Thousands of civilians, mainly Christians, have fled the violence. The Islamic radicals have been a constant, but not particularly threatening, problem in the north for years. To date, the biggest problem caused by the Islamic radicals was their halting of the polio eradication campaign several years ago (by spreading the rumor that the polio vaccine was actually part of a Western conspiracy to sterilize Moslem children.) This caused the polio to spread again in Nigeria, and several other countries. Thousands of additional Nigerian children got the disease, and hundreds were crippled or killed. Most parents figured out what was going on, and the vaccinations were allowed to continue. Although discredited by this, the Islamic radicals were undeterred, and have now gambled big on establishing an Islamic state by force.

If you read the fine print in the Congressional plans, you'll find that a lot of cherished aspects of the current system would disappear.

NEW YORK (Fortune) -- In promoting his health-care agenda, President Obama has repeatedly reassured Americans that they can keep their existing health plans -- and that the benefits and access they prize will be enhanced through reform.

A close reading of the two main bills, one backed by Democrats in the House and the other issued by Sen. Edward Kennedy's Health committee, contradict the President's assurances. To be sure, it isn't easy to comb through their 2,000 pages of tortured legal language. But page by page, the bills reveal a web of restrictions, fines, and mandates that would radically change your health-care coverage.

If you prize choosing your own cardiologist or urologist under your company's Preferred Provider Organization plan (PPO), if your employer rewards your non-smoking, healthy lifestyle with reduced premiums, if you love the bargain Health Savings Account (HSA) that insures you just for the essentials, or if you simply take comfort in the freedom to spend your own money for a policy that covers the newest drugs and diagnostic tests -- you may be shocked to learn that you could lose all of those good things under the rules proposed in the two bills that herald a health-care revolution.

In short, the Obama platform would mandate extremely full, expensive, and highly subsidized coverage -- including a lot of benefits people would never pay for with their own money -- but deliver it through a highly restrictive, HMO-style plan that will determine what care and tests you can and can't have. It's a revolution, all right, but in the wrong direction.

Let's explore the five freedoms that Americans would lose under Obamacare:

1. Freedom to choose what's in your plan
The bills in both houses require that Americans purchase insurance through "qualified" plans offered by health-care "exchanges" that would be set up in each state. The rub is that the plans can't really compete based on what they offer. The reason: The federal government will impose a minimum list of benefits that each plan is required to offer.
0:00 /2:07Health reform and you

Today, many states require these "standard benefits packages" -- and they're a major cause for the rise in health-care costs. Every group, from chiropractors to alcohol-abuse counselors, do lobbying to get included. Connecticut, for example, requires reimbursement for hair transplants, hearing aids, and in vitro fertilization.

The Senate bill would require coverage for prescription drugs, mental-health benefits, and substance-abuse services. It also requires policies to insure "children" until the age of 26. That's just the starting list. The bills would allow the Department of Health and Human Services to add to the list of required benefits, based on recommendations from a committee of experts. Americans, therefore, wouldn't even know what's in their plans and what they're required to pay for, directly or indirectly, until after the bills become law.

2. Freedom to be rewarded for healthy living, or pay your real costs
As with the previous example, the Obama plan enshrines into federal law one of the worst features of state legislation: community rating. Eleven states, ranging from New York to Oregon, have some form of community rating. In its purest form, community rating requires that all patients pay the same rates for their level of coverage regardless of their age or medical condition.

Americans with pre-existing conditions need subsidies under any plan, but community rating is a dubious way to bring fairness to health care. The reason is twofold: First, it forces young people, who typically have lower incomes than older workers, to pay far more than their actual cost, and gives older workers, who can afford to pay more, a big discount. The state laws gouging the young are a major reason so many of them have joined the ranks of uninsured.

Under the Senate plan, insurers would be barred from charging any more than twice as much for one patient vs. any other patient with the same coverage. So if a 20-year-old who costs just $800 a year to insure is forced to pay $2,500, a 62-year-old who costs $7,500 would pay no more than $5,000.

Second, the bills would ban insurers from charging differing premiums based on the health of their customers. Again, that's understandable for folks with diabetes or cancer. But the bills would bar rewarding people who pursue a healthy lifestyle of exercise or a cholesterol-conscious diet. That's hardly a formula for lower costs. It's as if car insurers had to charge the same rates to safe drivers as to chronic speeders with a history of accidents.

3. Freedom to choose high-deductible coverage
The bills threaten to eliminate the one part of the market truly driven by consumers spending their own money. That's what makes a market, and health care needs more of it, not less.

Hundreds of companies now offer Health Savings Accounts to about 5 million employees. Those workers deposit tax-free money in the accounts and get a matching contribution from their employer. They can use the funds to buy a high-deductible plan -- say for major medical costs over $12,000. Preventive care is reimbursed, but patients pay all other routine doctor visits and tests with their own money from the HSA account. As a result, HSA users are far more cost-conscious than customers who are reimbursed for the majority of their care.

The bills seriously endanger the trend toward consumer-driven care in general. By requiring minimum packages, they would prevent patients from choosing stripped-down plans that cover only major medical expenses. "The government could set extremely low deductibles that would eliminate HSAs," says John Goodman of the National Center for Policy Analysis, a free-market research group. "And they could do it after the bills are passed."

4. Freedom to keep your existing plan
This is the freedom that the President keeps emphasizing. Yet the bills appear to say otherwise. It's worth diving into the weeds -- the territory where most pundits and politicians don't seem to have ventured.

The legislation divides the insured into two main groups, and those two groups are treated differently with respect to their current plans. The first are employees covered by the Employee Retirement Security Act of 1974. ERISA regulates companies that are self-insured, meaning they pay claims out of their cash flow, and don't have real insurance. Those are the GEs (GE, Fortune 500) and Time Warners (TWX, Fortune 500) and most other big companies.

The House bill states that employees covered by ERISA plans are "grandfathered." Under ERISA, the plans can do pretty much what they want -- they're exempt from standard packages and community rating and can reward employees for healthy lifestyles even in restrictive states.

But read on.

The bill gives ERISA employers a five-year grace period when they can keep offering plans free from the restrictions of the "qualified" policies offered on the exchanges. But after five years, they would have to offer only approved plans, with the myriad rules we've already discussed. So for Americans in large corporations, "keeping your own plan" has a strict deadline. In five years, like it or not, you'll get dumped into the exchange. As we'll see, it could happen a lot earlier.

The outlook is worse for the second group. It encompasses employees who aren't under ERISA but get actual insurance either on their own or through small businesses. After the legislation passes, all insurers that offer a wide range of plans to these employees will be forced to offer only "qualified" plans to new customers, via the exchanges.

The employees who got their coverage before the law goes into effect can keep their plans, but once again, there's a catch. If the plan changes in any way -- by altering co-pays, deductibles, or even switching coverage for this or that drug -- the employee must drop out and shop through the exchange. Since these plans generally change their policies every year, it's likely that millions of employees will lose their plans in 12 months.

5. Freedom to choose your doctors
The Senate bill requires that Americans buying through the exchanges -- and as we've seen, that will soon be most Americans -- must get their care through something called "medical home." Medical home is similar to an HMO. You're assigned a primary care doctor, and the doctor controls your access to specialists. The primary care physicians will decide which services, like MRIs and other diagnostic scans, are best for you, and will decide when you really need to see a cardiologists or orthopedists.

Under the proposals, the gatekeepers would theoretically guide patients to tests and treatments that have proved most cost-effective. The danger is that doctors will be financially rewarded for denying care, as were HMO physicians more than a decade ago. It was consumer outrage over despotic gatekeepers that made the HMOs so unpopular, and killed what was billed as the solution to America's health-care cost explosion.

The bills do not specifically rule out fee-for-service plans as options to be offered through the exchanges. But remember, those plans -- if they exist -- would be barred from charging sick or elderly patients more than young and healthy ones. So patients would be inclined to game the system, staying in the HMO while they're healthy and switching to fee-for-service when they become seriously ill. "That would kill fee-for-service in a hurry," says Goodman.

In reality, the flexible, employer-based plans that now dominate the landscape, and that Americans so cherish, could disappear far faster than the 5 year "grace period" that's barely being discussed.

Companies would have the option of paying an 8% payroll tax into a fund that pays for coverage for Americans who aren't covered by their employers. It won't happen right away -- large companies must wait a couple of years before they opt out. But it will happen, since it's likely that the tax will rise a lot more slowly than corporate health-care costs, especially since they'll be lobbying Washington to keep the tax under control in the righteous name of job creation.

The best solution is to move to a let-freedom-ring regime of high deductibles, no community rating, no standard benefits, and cross-state shopping for bargains (another market-based reform that's strictly taboo in the bills). I'll propose my own solution in another piece soon on Fortune.com. For now, we suffer with a flawed health-care system, but we still have our Five Freedoms. Call them the Five Endangered Freedoms.

Increased military in Iraq and Afghanistan instead of reduction, partial birth abortion, increased foreclosures, increased jobless, increased homeless, increased deficit, apologies to Europe for our brave who died fighting for them, bowing to the Saudi king, total disregard for the constitution, no child left behind... left behind, too many czars, job creation only in government and not one single job for those who PAY the way for said government, 300,000 plus photo shoot, billions of bailout into the pockets of the wealthy who ended up declaring chapter 11 and pocketing OUR cash, deciding to close Gitmo and bring terrorists onto American soil (blasphemy) to further corrupt our dangerous inmates who may one day be released with a new mission in life, Pelosi calling our CIA lairs while she knew about waterboarding also putting our military at risk, hiring tax theives, not producing birth cert. proposing ending veterans health care, government control of corporations and banks.

Also, I was thinking of exercising my freedom of speech and political rights yesterday, considering buying a bumper sticker. Then I realized that if I actually put an "Impeach Obama" bumper sticker on my car, I would get shot or my car vandalized. If I wear an anti-Obama tee-shirt, I will be subjecting myself and whoever is with me, to danger. Here in Washington state, the Republicans citizens have to be quiet or be attacked. Whoever dares raise their voice and express an opinion against this president or the Democrats in general, will do so at their own peril. I remember a time when America was a free country. I remember when we were allowed to voice our opinions freely and do so with safety. We ALL had a right to free speech. That freedom now is reserved only for the Democrats. ONE opinion is allowed and All others will be attacked and destroyed. America is free falling into what China and Russia have been all these years. We have a dictatorship - The Democrat SOCIALIST Party.


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