National Health Care Reform. To quote Margaret Thatcher “socialism is a great idea till you run out of other people’s money.”

The author, Ted Wolk has over 30 years experience in the life and health insurance industry, looks at the National Health Care Bill and shares his thoughts on the core problems related to this Issue.


This Health Care reform article will be a 3 part series:

Part 1 = Are Insurance companies responsible for the higher health insurance premiums?

Part 2 = The Politicians are ignoring the core Problems. No one wants to take accountability.

Part 3 = Government is going to create another big tax bucket for the taxpayers. And we will be stupid enough to let them do it.
________________________________________________________________ This is part 1 of 3 parts.

Statements from Washington like “Pass the bill today and we will fix it later” scare the daylights out of me and reflect the mentality of how our leaders solve problems.

Yes there needs to be changes in health care delivery, however our politicians are not approaching the problem in a business like manner. They are ignoring the core of the real problems that have created our dilemma.

They are doing this more to satisfy their own ego. If this national health concept is suppose to be such a great idea, then why are they forcing it down our throats and then telling us if we don’t want to play their game, we are going to fine you, penalize you, etc. “ (Freedom of Choice!!!!”Was that a privilege we once enjoyed?)

But before we move forward, we need to understand some basic and simple economics:

Let’s examine some of the underlying core problems we have with this health care reform bill being discussed.

So let’s go to Economic Class 101>>>>.Here is Lesson number one---Please write this down in your notebook. “There is only 100 cents in a dollar.” Yup, that’s what I said, there is only 100 cents in a dollar, and I know it is hard to believe. If there is anyone out there that can dispute this fact, please let me know. So let’s please keep this fact in mind as we continue on, unlike the people in Washington who totally ignore this basis fact.

Many people continue to badmouth the health insurance companies.

Certainly the big issue today is the high cost of health insurance, and the fact that people can not afford it, which results in so many uninsured. But are the health insurance companies really creating the problems we have today. The answer is no. Our politicians seem to want to ignore the core issues of this dilemma. Slapping a band aid on the real problems is not a solution. So lets take an in depth look at the health insurance companies and why our health insurance premiums have gone up. Just so everyone knows, the increasing premiums are not created by some CEO that felt like raising the rates.

Insurance companies are only the messenger.

Personally, I think we need to quit putting all the blame on the health insurance companies. They are only the messenger. The message they are delivering (higher premiums) is because of all the other problems in our health delivery system and our society. Those core problems should be addressed first, before we start talking about any national health care.

So who is really at fault for higher premiums?

Is it really the health insurance company’s fault that premiums have gone sky high?

Let’s look at the real business world and not the fantasy world. Health Insurance premiums rates are based on claims and morbidity rates. In other words, hard undisputed realalistic data. Life insurance companies use mortality tables and health insurance companies use morbidity tables. These are very accurate actuarial tables. Actuarial tables that are built on proven and scientific data.

However, when you continue to throw in unknown variables such as increasing malpractice claims, fraud, illegal claims, double billing, etc., it throws everything out of whack, so unless these issues are brought under control, how will you ever be able to lower or get health insurance costs under control? You never will.

What do insurance companies really do?

Insurance companies only pay claims that are submitted to them by the clients, patients and the doctors and hospitals. They have no control of these claims. Let me say that once more. Insurance companies only pay claims.

What do I mean by no control?

As an example, they have no control of all the malpractice claims that they must pay. They have to pay out all the large malpractice claims that are allowed under our current laws. Insurance Companies have no control of these claims or the amounts, or when they will have to be paid.

And because they have to dish out money for malpractice claims, they have to raise the rates for doctor’s malpractice insurance and guess what, the doctors then pass these increases along to you. It adds to their overhead and expenses. This then results in a pass through expense to your health insurance company, thereby raising your premiums. (Remember 100 cents in a dollar) So in reality, both of these factions, (insurance companies) and (doctors/hospitals) are in a catch 22 situation - no win situation.

So again, I ask, how does it become the insurance companies fault if they have to raise rates to make ends meet at the end of every year, when they have no control of issues like this?

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