The White House is concerned about viral emails which question the wisdom and policies of the legislation given the title of “America’s Affordable Health Choices of 2009″. Also known as ObamaCare. So, David Axelrod, Senior Advisor to the President, has sent his own viral email in response. Ok. That is fair enough. This email found its way to my computer and I have read it completely.
It consists of three groups of eight statements designed to rebut some of the statements made by in the emails the White House objects to. They are:
8 ways reform provides security and stability to those with or without coverage
8 common myths about health insurance reform
8 Reasons We Need Health Insurance Reform Now
I have printed the entire email, including the three lists, below. It is printed in green. Nothing was left out (assuming I received the entire email – and I believe I did) except some minor graphics which did not add to or subtract from the discussion.
For each of the first and last sections, I have responded to each of the statements. My comments are in black. I chose not to comment on the myths section for reasons you will find at the beginning of that section. I will say this about the so called myths. I have seen lists of the concerns that should have appeared on this list but did not. Perhaps it is because they are not myths but provable facts.
Before we get to Mr. Axelrod’s viral email, let me talk about the subject in general.
Although it is not presented in this email, I have heard and read comments about how this reform is needed because the free market has failed. The failure comes in the fact that the insurance companies are making record profits and are just plain greedy. Well, they are in business to make a profit. All businesses are. The insurance companies have to answer to state insurance boards and have a lot of restrictions put on them. Some of those, no doubt, come from federal mandates, others are the brainwork of the state lawmakers. In either case, government interference is a major part of the problem.
Without government interference, I would be able to purchase an insurance policy from any company in any state. I would be able to take the same policy to any place where I might choose to move. State laws prevent this. This curtails competition. Curtailed competition reduces options and raises costs.
Regarding the business of excess profits and greed, I have a link for you to take a peek at: http://mjperry.blogspot.com/2009/08/health-insurance-industry-ranks-86-by.html. This link is to a blog called “Carpe Diem” by Dr. Mark J. Perry, a professor of economics and finance at the University of Michigan. Dr. Perry has a table (see above link) of Profit Margins by Industry. It shows “Health Care Plans” ranks #86 by profit margin (profits/revenue) at 3.3%. Measured by profit margin, there are 85 industries more profitable than Health Care Plans (included Cigna, Aetna, WellPoint, HealthSpring, etc.). They would likely be even lower in the rankings if the limitations put out by state governments were removed and full competition were re-established. (Thanks to DownsizeDC.org for the link to Dr. Perry’s blog.)
“Accident and Health Insurance” is # 73 at 3.8%. Still not exactly high on the list. Consider that “Drugs – Generic” is #45 (6.6%), “Medical Instruments and Supplies” is #41 (6.8%), “Medical Laboratories and Research” is #32 (8.2%), “Healthcare Information Services” is #24 (9.3%), “Drug Delivery” is #14 (13.5%), “Drug Manufacturers – Major” is #7 (16.5%), and “REIT – Healthcare Facilities” is #3 (24.6%). So you see, plenty of health related fields are doing much better than the insurance companies.
In case you are wondering, I do not now and never have worked for an insurance company or agent. To the best of my knowledge no relative of mine does or ever has either. (more…)