Special Q&A Re Gold-Plated Plans

[BillLee]

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---------------------------- Original Message ----------------------------
Subject: Re: Re: SHORT QUIZ - SUGGESTED ANSWERS - Healthcare/Insurance Reform
From: John Karls
Date: Fri, August 28, 2009 7:19 pm
To: Bill S. Lee
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Dear Bill,

I'm in a travel status at the moment, so I don't have access to any resource materials that I can send you or the time to google anything to send you.

However, it should be fairly easy for you to google the issue - though it may take some time.

The question you raise is similar to selecting the amount of liability coverage you want to carry on your automobile insurance policy.

Sure you can carry only $10,000/$20,000, which may cost you, say, $500/year.

But you might hit a movie star and his/her loss of income might cost you zillions in a law suit.

However, your chances of hitting a movie star are extremely low.

Which is why, say, $5 million/$10 million coverage would only cost you, say, an additional $75/year.

The same is true for employer-provided health-care insurance. The cost of providing $500,000/QALY rather than $50,000/QALY is a relative pittance – especially considering your workforce is age 18-65 before they encounter the chronic end-of-life illnesses (cancer, diabetes, etc.) caused by bad behavior (smoking, obesity, etc.) and comprising the overwhelming majority of America’s medical expenditures. However, the PR effect on your employees of hearing stories about the 1 person in your workforce of 80,000 for whom the plan paid for a $10 million operation is utterly amazing!!! Which is why so many employers pay the pittance for the incredible PR!!!

(Moreover, we could digress on the issue that most huge employers are "self insured" in the sense that they stand the entire expense of their plan on a "retro-rated" basis (i.e., their premium each year is approximately 100% of the prior year's cost) and they hire an insurance company, in effect, to merely administer the plan because of its expertise in processing claims, etc.)

Coming the other way, liberals have been demagoguing the "gold-plated" plan issue. But just like demagoguing taxing people who earn more than $250,000/year, there just isn't much money in it!!! You could impose a 91% tax on the rich (as was the top bracket before President Kennedy's "tax cut" reduced the top bracket to 70%) or eliminate the employer tax deduction for the excess premium relating to covering risk over $50,000/QALY -- and you just don't raise significant amounts of revenue.

Which, straying from your topic a bit, is why President Obama's popularity is almost in free fall. The middle class looks at his current projected deficits for the foreseeable future and they know there is no way to bring them under control without taxing the middle class!!! (Or eliminating the extra programs that have been enacted, which President Obama is unlikely to do.)

And, no, I am not "grinning broadly" -- for me, it is extremely sad!!!

Your friend,

John K.


---------------------------- Original Message ----------------------------
Subject: Re: SHORT QUIZ - SUGGESTED ANSWERS - Healthcare/Insurance Reform
From: Bill S. Lee
Date: Fri, August 28, 2009 11:46 am
To: John Karls
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John -

With abounding respect for you, your propensity to read volumes, and of course your office at the helm of RL and strictly under the guise of "stirring the pot" I ask:

Could you cut and paste (into a reply) the content of an article or two written by reputable journalists that illustrate that private U.S. health insurance companies base their "coverage" decisions on "Quality-Adjusted Life Years". They may use that term in PR material trying to justify denials, but I find it far more likely that they base their actual "coverage" strictly on potential profits, according to actuarial calculations, limited only by legal requirements or restrictions, with a small degree of thought given to those "market forces" which they cannot avoid or influence.

When you use numbers like $500,000 I have to wonder if you are referring to annual or lifetime "caps"? I must admit however that I am not familiar with "gold plated" insurance policies accessible only to the privilege elite (CEO's etc.).

Or do I misunderstand completely because I have missed the conversations where Insurance Company Executives discuss their own "Quality-Adjusted Life Years" relative to income increases?

With the hope that you are grinning as broadly as I am,

Bill


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Subject: [Fwd: Re: Re: SHORT QUIZ - SUGGESTED ANSWERS - Healthcare/Insurance Reform]
From: John Karls
Date: Sat, August 29, 2009 3:37 am
To: Bill S. Lee
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Dear Bill,

I posted on our bulletin board over your name your query and my reply (after eliminating a couple of typos).

I hope you don't mind. After all, the point you raised is one that many of our members should be interested in.

Incidentally, were you able to attend Drinking Liberally last evening? I hope they got a nice turn out.

And I hope there was no negative reaction to my having sent out the Suggested Answers to the Short Quiz a day early so that they arrived 8-10 hours before the DL presentation. The DL presentation really put me in a "no win" situation -- if I sent out the Suggested Answers at the regular time (the morning after) it might look like I was trying to contradict the speaker (depending on what she said). So I opted for sending them out in advance on two theories -- (1) Laura could always forward them to the speaker so that she could address them in any way she wanted, and (2) the level of the presentation and the ensuing Q&A period could be elevated.

I hope all is well with you.

Your friend,

John K.

[BillLee]

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---------------------------- Original Message ----------------------------
Subject: Re: health insurance
From: readingliberallyemaillist@johnkarls.com
Date: Sat, August 29, 2009 6:46 pm
To: Bill S. Lee
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Dear Bill,

As you can probably tell from my other response a couple of minutes ago, I monitor my main mailbox before the “readingliberally” mail box – and usually don’t even monitor the “readingliberally” mail box more than 48 hours after a weekly e-mail is sent.

Re your second paragraph, I’m not sure I understand your point about exclusions and QALY’s. So far as I am aware, there are no so-called exclusions that are NOT based on QALY’s (and I am guessing the author of the Wikipedia article, which is also posted on our bulletin board, didn’t even bother to clarify that because s/he didn’t think it needed clarifying).

Though I could, of course, be wrong!!!

Re your third paragraph, you seem to mis-perceive the issue of “Cadillac plans” as somehow relating to “the wealthy.” An employer-provided health plan, like any employer-benefit plan such as a pension, is NOT permitted to single out highly-paid employees for special treatment. If an employer wants to purchase a health plan for its employees with a $500,000 QALY, then the $500,000 QALY applies to the lowest-paid janitor the same as the CEO.

As I tried to make clear in my earlier response, many employers purchase plans with high QALY’s for the PR value – which is tremendous, especially when a low-paid janitor or her/his family member receives a $10 million operation!!!

I don’t recall saying that President Obama’s popularity is in “free fall” – only that it is ALMOST in free fall. As indeed it is ALMOST. You may recall that when we discussed last September 10th (11.5 months ago) Saul Alinsky’s “Rules for Radicals” that Saul Alinsky’s cardinal principle was that you never attack the “middle class” because then you forfeit majority status!!! Although President Obama’s rhetoric tries to avoid the appearance that he is attacking the “middle class” with tax increases, the looming deficits and the perceived inability to deal with them effectively (without rescinding the new programs enacted as part of the “stimulus” bill) are causing the “middle class” to desert President Obama in droves. It is too bad that it isn’t easier to fool Saul Alinsky’s “middle class.”

I will not defend the behavior of conservatives at any Town Hall meeting.

With regard to your knowing how I always like to “stir the pot” to precipitate a good discussion, I appreciate that you were hoping that I was “grinning broadly” because I had merely been trying to “stir the pot.”

Unfortunately, this imbroglio is too sad!!!

Your friend,

John K.


---------------------------- Original Message ----------------------------
Subject: health insurance
From: Bill S. Lee
Date: Sat, August 29, 2009 1:55 pm
To: readingliberallyemaillist@johnkarls.com
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Hey World Traveler -

My point (in the previous e-mail) was not about buying "Cadillac" health insurance. It was that I sincerely doubt that the post procedure "Quality of Life" of the insured is given even the slightest consideration by health insurance providers when determining exclusions. I did Google "Quality-Adjusted Life Year" together with "Wikipedia", before writing, just to make sure that the author was not making that claim. However with my dial up internet that is about as far as I am willing to google.

Re your points regarding "demagoguing": I don't imagine that cutting tax exemptions on Cadillac insurance premiums for the wealthy is viewed by the Obama Administration as a big ticket item. Conversely there might well be some significant revenue in requiring that everyone making over $100,000 - $150,000 pay for their insurance with post tax dollars. Not that I would consider that to be the way to go. And yet, neither do I look askance at almost any tax increase for those with truly grotesque (by my standards) wealth.

I also don't think the insignificant amount of $$ which could be generated via the taxing methods you reference is the reason Obama's popularity is "free falling" (an exaggeration in itself). You need but to have attended Representative Jason Chaffetz's South Jordan "Town Hall Meeting" to come to that conclusion. It was packed with absolute Morons, a term I would normally avoid if it weren't for the fact that it might actually be an understatement in this instance. I also use the term "Town Hall Meeting" loosely as it was actually merely an opportunity to whip his flock of bleating sheep into a frenzy.

I really do not think I exaggerate when I say that I doubt that more than 10% of the audience had any idea how Obama had proposed paying for any of his insurance reform plan. Cruel and intolerant as it might seem, I think all one has to do with that audience is tell them that any Democrat will raise their taxes, commit abortions, believes that religion has no place in government or public institutions, outlaw their guns and off road vehicles, and will treat gay's,"Illegals", and people of color equitably (maybe even women). Admittedly Chaffetz didn't have to use more than half of those with this group. Fortunately for him very few of them probably noticed that he seemed not to completely understand the terms "Public Option" and "Single Payer", especially the differences. They probably also missed the fact that he seemed to have no idea what HR676 was.

[I really must take a moment here to mitigate the negative reaction my vilification of these people may inspire. They were truly despicable. They booed and shouted down any opinion that they conceived to be contrary. They pushed and shoved. One or two even threw things. And the crowning touch was when one fellow threatened another with a cane to the point that the police almost had to wade into the crowd. On occasion they didn't even know that they were booing or cheering someone who was saying something they would have agreed or disagreed with, respectively. They even went so far as to heckle Chaffetz when he tried to explain a stance, instead of just allowing them to speak. The UofU crowd at a pep rally before a football game against BYU is probably better behaved.]

Lastly the wish that you were grinning broadly referred to my hope thatyou viewed my "pot stirring" as light hearted. It did not refer to our current grim national "state of affairs".

Bill

"If we don't who will?"