Allow me to preface this post by referring you to some other great posts on the health care legislation. The Amateur Financier gives a balanced look at the legislation and what it means to us. Other bloggers who have weighed in are Financial Samurai who is in favor, Darwin of Darwin’s Finance who is convinced that we will have buyer’s remorse, Kevin of 20s Money who is certain (based on government’s history of underestimating projected costs) that it will be way more expensive than expected and Evan of My Journey to Millions who digs into whether the bill is even constitutional.
If you want a great summary of what the bill covers and which provisions kick in when, I highly recommend jumping over to this article provided by Health Insurance Providers.
What do I think?
Did we need health care reform? I think everyone agrees that we did. Me too. But I also believe that this bill will ultimately result in poorer quality of health care for all of us.
Let me explain:
What will happen to Health Insurance Companies?
Imagine the following conversations:
Homeowner, “I need to purchase some homeowner insurance."
Insurance Agent, “Tell me where you live so we can drive by and look your home over."
Homeowner, “My address is 100 Main St, but my house burned to the ground yesterday."
Woman, “I would like to purchase some term life insurance for my husband."
Agent, “I will need to ask some questions. How old is your husband?"
Woman, “He died yesterday."
“Ridiculous!" you say. “No insurance company is going to issue insurance against an event after the event has already happened." Right. But, starting this year, the new health care bill requires insurance companies to extend coverage to children with pre-existing conditions. By 2014, all pre-existing conditions must be covered for all ages and (get this), higher health insurance rates cannot be levied because of health, gender, etc.
“But…but…shouldn’t everyone have health insurance regardless of their circumstances?"
Good question. One I don’t have an answer to. But here is my question: How can insurance companies stay in business if they are forced to insure all pre-existing conditions and not allowed to raise their rates? Well, they can and will pass those increased costs on to other policy holders, but my prediction is that within five years all health insurance companies will have closed their doors, forcing the single payer government health insurance to be the only insurance in town (or in the nation).
What will happen to doctors?
Our government has promised to trim heath care costs and help save money on health insurance premiums. While I haven’t read anything specific about the new bill monitoring pay for medical treatment, they will have to find ways to hold down health care costs if we default to the public option plan. I envision them setting limited payments per procedure, effectively stifling doctors’ incomes. With less income incentive, current doctors are going to start leaving the system and prospective doctors will think twice before spending $250,000 and 8-10 years of their lives for the privilege of working for a capped salary.
By 2014, the new bill forces all U. S. citizens to have health insurance or else pay a fine. In effect, the 30,000,000 who are currently uninsured will then be insured. Even if we keep the same number of doctors, each doctor will be seeing more patients thus reducing the quality of care. If my theory is true about fewer doctors in the future, each doctor will be seeing even more patients, further diminishing the quality of care per patient.
What will happen to pharmaceutical companies?
Pharmaceutical companies invest hundreds of millions of dollars in research to discover new cures for our health issues. They must recoup these investments within the patent time period in order to justify future research. Why? Because once the patent has expired, any and every drug company will start selling the generic version for practically nothing. For example, I pay only $10 for three months supply of the generic blood pressure medication.
The new Health Care Reform bill requires that, starting in 2011, seniors enrolled in Medicare Advantage or the Prescription Drug Plan will receive a 50% discount on brand name drugs immediately with additional prescription drug discounts to follow. Now…ask yourself what will happen if the Pharmaceutical companies are not allowed to recoup their research investments because they are restricted in what they can charge. Right. They will simply stop doing the research. We won’t notice for years, but, without the research, no new drug discoveries will be made.
I hope I am wrong, but it seems to me that the health care bill we passed is going to lower the quality of health care for all of us. When the insurance companies close their doors, we will all have government run health care. Because of our nation’s debt problems, restrictions could be capped on rates health care providers charge, which would discourage prospective doctors from entering the medical field. The equation of fewer doctors and more patients equals metered care for all. If pharmaceutical companies cannot profit from new medicinal discoveries, there will be no new discoveries.
An ironic silver lining: if the quality of health care is lessened, we might start taking better care of ourselves. That would definitely be a good thing.
Please jump in and share your thoughts on the new Health Care Bill. Do you agree that it will lower our quality of health care? If so, is insuring the uninsured worth it?