A healthcare proposal too big to succeed
In recent remarks to business leaders, President Obama declared himself an â€śardent believer in the free market.â€ť So, there is at least one person who is an ardent believer in that sentence.
Just this week, I had lunch with a very prominent, sane, and successful Wall Street executive who was CEO of a big-name firm. He left more than a decade ago, during an era when those folks did so with pride rather than with investigations and grand jury subpoenas.
While we ate, we worried aloud about what’s going on in Washington – the new financial capital of the world. My guest cautioned about â€śbecoming too negative as we age.â€ť I tend not to think of myself as aging, though I did note that last year’s inauguration marked the first time a U.S. president was younger than me. And I hardly think our lunch conversation qualifies us as â€śGrumpy Old Men.â€ť
But if it does, the prospect of Medicare in a few years is looking better and better, particularly in comparison to the vagaries of the private health-insurance market. If the President truly wants us to see him as an â€śardent believerâ€ť rather than a Socialist, he should be thankful that few have digested his latest healthcare proposal.
The Obama Administration has declared all sorts of institutions as â€śToo big to fail,â€ť warranting its intervention. His health proposal, while trumpeted as being â€śscaled-back,â€ť remains too big to succeed.
As an entrepreneur with management and governance roles in several ventures â€“ and a typical small business health insurance plan â€“ I can’t imagine who could understand or make projections based on the latest proposal. Even to those of us with backgrounds in health policy, the Obama plan is too opaque and complex to allow any forward planning.
Without regard to the details, there are two big-picture aspects of the plan that should cause it to be rejected by the entrepreneurial community.
First, the central thesis is that tens of millions more of us will have our health care administered by private-sector insurance companies. To the extent that the president wants to increase our nation’s reliance on the health insurers, shame on all of us for not being more vigorous in our rejection of these gate-keepers, their tactics, and their shameful unethical patterns.
The only reason that more Americans are not wildly outraged about the behavior of these entities is that only a small percentage of us have any serious medical problems in any one year. Hence, the silly statistics about what percentage of policyholders are satisfied with their plan at any point in time.
Tell me, how do you like your life insurance policy? Well, I bet you haven’t had to use it yet, unless my musings are on-line in heaven.
Similarly, the vast majority of policyholders have no significant experience with their health plans, whose mean-spirited and sharp-pencil tactics are evident only when it’s not a fair fight â€“ that is, only when the policyholder or a family member has a serious issue. Given how often coverage plans are changed or modified, the rules and restrictions and costs are likely to be different by the time any one of us is on the gurney.
Second, the Obama’s proposal has a broad, new tax increase that the small business community regards as an emetic. The diverse entrepreneurial crowd has one thing in common â€“ we all want to succeed. Whether we want to horde our rewards or give them to our kids or spend them or give them to charity, we all want to make more money. Most of us want to be rich(er).
Obamaâ€™s â€śslimmed-downâ€ť plan still costs about a trillion dollars. So the president proposes to expand payroll taxes to include passive investment income â€“ the kind of income we all want to have going forward. The kind that will allow us to live comfortably in a country whose finances are out of control, with leadership that ardently believes they might even convince us that the free market can endure.