Democrats’ goal: Redistributing wealth

By Ronald E. Bachman

It turns out that “Joe the Plumber” gave us the real insight to the ultimate goals of the Obama presidency and the current Congress: redistribution of wealth.

Centralized government power, federal control and redistribution of wealth seem to be behind many of the proposed “reforms.” This includes more than $1 trillion in redistributed wealth in the guise of health reform.

The targeted major financial losers in the morphing House and Senate proposals will be Medicare beneficiaries; adults under age 30; owners of individual health policies; Americans insured under small group employer plans and health-conscious Americans.

There are four methods to implement redistributive health reform, in which government draws from targeted populations to reallocate wealth and benefits to politically favored groups.

1. Lower government funding for Medicare.

2. Add taxes and fees on private insurance and medical supplies.

3. Implement price controls on premiums.

4. Mandate costly coverage.

According to the Congressional Budget Office, the proposed health plans would take up to $500 billion from Medicare.

The 22 percent of Medicare beneficiaries covered by Medicare Advantage would be hardest hit, with an immediate reduction in benefits of 14 percent, totaling up to $114 billion in reduced funding.

Up to 47 million new healthcare consumers may be added to insurance rolls without any commensurate plan to add doctors. Lower physician reimbursements will likely lead to longer waiting, less time with a doctor, lower quality of care and fewer available specialists.

Adults under age 30 will pay substantially more for private health insurance. Proposed price controls outlaw actuarially sound pricing. The Senate H.E.L.P. committee proposal requires that young adult premiums cannot be less than one-half the premiums for adults age 64. The Senate Finance Committee proposal would allow young adult premiums to be one-quarter of premiums for those ages 64.

For the more flexible Finance Committee bill alone, estimated premiums would increase by 59-63 percent for ages 18-24, according to PricewaterhouseCoopers (PwC). Insurers looking at a merging of the bills have predicted an increase of 100 percent or more.

Owners of individual policies will average premium increases of 47 percent, according to a PwC analysis of the Finance committee work. PwC predicts that by 2019 costs will increase beyond expected medical inflation of $2,600 per year for individuals and $6,600 for family coverage.

A report by Oliver Wyman estimates that in most cases the increase for individuals will be 60-73 percent more than today (beyond the expected normal inflation). Added costs and spending in the H.E.L.P. committee bill would only increase premiums to a higher level.

PwC expects that by 2019, small group premiums would increase by an additional $2,100 for single coverage and $5,400 for family coverage.

Eight in 10 uninsured individuals work mainly in small businesses; hiking premium costs for individual and small group plans will only increase the number of uninsureds.

It is no wonder that the CBO estimates that by 2019, there will still be 25 million uninsured individuals.

Healthy Americans would be disadvantaged for their efforts at prevention, early intervention, wellness, and improved eating and exercise habits.

The H.E.L.P. Committee proposal would make it illegal for insurers and employers to reward and incentivize good healthy habits to control blood pressure and cholesterol. Responsible citizens would pay for the lack of personal responsibility in others.

The funds taken from all these groups would be redistributed to the lower income non-elderly, community organizing groups, and entities relying on government grants and funding for special interest project funding.

“Starting in 2014, non-elderly people with income below 133 percent of the FPL (approx. $30,000) would generally be made eligible for Medicaid; the federal government would pay a share of the costs of covering newly eligible enrollees that varies somewhat from year to year but ultimately would average about 90 percent.” States would be required to cover the additional 10 percent.

This means free coverage for 14 million lower-income citizens who might currently be covered by private insurance and pay part of the cost themselves. Additional federal subsidies are provided for those earning up to three times the federal poverty level or $66,000. Up to 49 percent, or more than 148 million Americans, may become eligible for government subsidies.

Organizations relying on government grants and funding of special interest projects will enjoy the 421 references to grants and subsidies included in the Senate H.E.L.P. proposal. Billions of dollars are allocated for studies, research, development, implementation and other consulting arrangements by the many new committees, departments, working groups, panels, boards and other new government entities.

The overall goal of these health “reform” proposals does not seem to be about health or healthcare. They do not seem to improve access, quality or lower costs. They do not address the current high number of uninsured individuals.

The CBO estimates the bill, after spending $829 billion on special interest groups, will leave 25 million people without insurance. That will increase government dependence, government employment and government consultants.

Citizens, organizations and companies receiving government subsidies tend to vote for more government and subsidies. Politicians can pander to those voters by promising more.

The strategy seems clear: reallocation of wealth for power and votes.

The implementation tactics can work in the short run, but the changes will kill the Goose that Lays the Golden Eggs – this economy.

Regular citizens challenging the health plans have been lambasted for asking questions. Joe the Plumber was attacked for discovering the truth. But he understands that government spending of his children’s future and the unprecedented redistribution of wealth through health reform is not the change he wants or voted for. For many, it reeks of out-of-control, irresponsible spending.

There is a clear populist movement demanding that government lower spending, eliminate pork barrel projects, stop the redistribution of wealth policies, and rely on the intelligence and ingenuity of the American people to solve their own problems.

Health reform is needed, but sensible people want it focused on the uninsured and those in real need of financial support. Americans are a generous people. We can help those who need help without destroying the world’s greatest health care system and economy.

[Ronald E. Bachman FSA, MAAA, is a Senior Fellow at the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. He is also a Senior Fellow at the Center for Health Transformation, an organization founded by former U.S. House Speaker Newt Gingrich. Mr. Bachman worked as an outside expert with members of Congress and the Clinton administration during the 1993-94 health reform.]

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Submitted by Claude Y Paquin on Mon, 01/04/2010 - 9:32am.

Ron Bachman, whom I have personally known, obviously does not live in the real world where people struggle to pay health insurance premiums that get higher and higher every year, with bigger copays, larger deductibles and extensive benefit limitations, while the CEOs of the insurance companies that collect these premiums, deny some of the claims, and cancel the policies of people who might need them the most, collect annual pay of over $9 million (Wellpoint), $13 million (United Health), $10 million (Humana), $23 million (Aetna) and $25 million (Cigna).

These compensation figures all come from official proxy statements found on the Securities and Exchange Commission website, so they are well documented.

The wealth redistribution system we have now takes money from the poor and gives it to the rich.

Unfortunately, some of the poor are poor not only in money but also in smarts. Joe the Plumber, to whom Bachman alludes, was found out not to be a genuine licensed plumber, and also to owe back state taxes. Obviously not a genius, he was exploited by politicians of the far right, as many other citizens are exploited.

By having become a Fellow of the Society of Actuaries and a member of the American Academy of Actuaries, Ron Bachman has demonstrated that he has the mathematical knowledge to properly work with statistics. When it comes to understanding the politics of the moment, however, he obviously is lacking.

Anything that has to do with insurance involves wealth redistribution. The people who get their insurance claims paid end up getting money out of those who pay premiums and don’t file claims. That’s the way insurance works, Ron!

I personally don’t mind if somebody makes $10 or $25 million a year, so long as it is not at my expense. People who pay health insurance premiums that keep growing every year while their benefits keep shrinking should have a say in what’s going on. Taxpayers who pay taxes to the federal, state and local governments which end up funding the health care benefits of our public servants should have a say in what’s going on. We have that say, as voters, by electing politicians with the smarts to see what’s going on and the backbone to do something about it.

I applaud the fact that we have a president with the smarts to realize that our current system is unsustainable and with the backbone to do something about it. We can quarrel about the details, as we clearly now have too many cooks spoiling the broth. We should realize that perfection is the enemy of the good, and we should demonstrate some tolerance about the efforts that are being made to improve not only the current situation but the situation we are about to get ourselves in.

In any event, I want Ron Bachman and his ilk to know that we already have ongoing wealth redistribution, from the poor to the rich. I am all in favor of stopping that. That makes the two of us opposing wealth redistribution.

Claude Y. Paquin

(formerly Fellow of the Society of Actuaries and member of the American Academy of Actuaries)

S. Lindsey's picture
Submitted by S. Lindsey on Mon, 01/04/2010 - 10:32am.

Let's see how this works.. In your words...

"The wealth redistribution system we have now takes money from the poor and gives it to the rich."

The Rich take "MONEY" from the POOR.. Ok I got that..

Just how does that work?

Since by definition the poor are well.. POOR. Meaning without means, funds, cash, property etc...

The "RICH" which you so obviously disdane, are generally the "EMPLOYERS" of the "Poor" that is those that actually work instead of standing in line for a handout.. Those that get the handouts well.. Just where do you think those checks come from..? Oh yeah.. the taxes that the "RICH" pays to the Government so it can re-distribute that wealth.. DUH.

So by the very existance of the "RICH" they are transferring their "WEALTH" / profits.. to the "Poor" by way of a PAYCHECK and/or a Welfare Check.

Socialism Claude is not a path this Country should travel.. Apparently you think so.. but I do not...

"A little matter will move a party

but it must be something great that moves a nation.

~Thomas Paine"

Submitted by AtHomeGym on Mon, 01/04/2010 - 1:12pm.

Steve, I'm sure he didn't mean "poor", I suspect he really meant to say "the less fortunate". What I want to know is when some of those "poor" folks are gonna step up and start paying my health insurance premiums (which will increase about 10% next year.) I suppose that's what I get for having one of those "Cadillac" plans---(well, it's at least a "Buick" plan).

Submitted by Bonkers on Mon, 01/04/2010 - 5:35am.

Mr. Bachman's article above, written in short vague paragraphs, piles confusion upon confusion on anyone Else's attempts to improve health care for the individual.

If any one of you can read each of those paragraphs and then tell me what he says in plain English, I would appreciate it.

Mr. Bachman is part of a corporation who speaks for a living (paid) and works for a "for profit" corporation.

He is in cahoots with Newt Gingrich's corporation doing the same thing (one of Newt's companies).

Sarah Palin would be proud of their organizations!

Joe Kawfi's picture
Submitted by Joe Kawfi on Mon, 01/04/2010 - 8:44am.

Let me get this straight. YOU'RE complaining about a posting that is vague and confusing? That's a real knee-slapper - You almost had me on that one.

What part of this do you not understand?:"It is no wonder that the CBO estimates that by 2019, there will still be 25 million uninsured individuals"

This bill is nothing but another government boondoggle meant to increase the size of government (non-producers) and does absolutely nothing to help the average man. Premiums, taxes, and government control over our lives will increase.

"If ever a time should come, when vain and aspiring men shall possess the highest seats in Government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams

Submitted by Bonkers on Mon, 01/04/2010 - 9:01am.

What part do I not understand? All of it---every paragraph.

It either says the opposite of what the bill says, or makes a general statement!

But generally it says, I think, that Insurance companies will make less profit and the excess will go for those without insurance---which he doesn't like.

What does earmarks have to do with the health plan? They wouldn't pay one days worth of the insurance bill if they all were canceled!
Anyway republicans got as much as democrats---that won't stop.

People are fed up with such articles as this--that is why republicans lost!

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