Archive for January, 2009

Queues cost Canadians more than $750 million in 2008; more than 30,000 seek treatment abroad

Thursday, January 22nd, 2009

Although the public system seems to save money by restricting access to medical care, private persons pay the cost.

In 2008, an estimated 750,794 Canadians were waiting for treatment after an appointment with a specialist. Using a Statistics Canada finding that 11% of people are adversely affected by waiting for elective surgery, Maureen Hazel and Nadeem Esmail of the Fraser Institute calculate that lost productivity costs Canadians $751 million in 2008.

This does not include the cost of care provided by family members or the non-monetary medical costs of adverse events or death due to treatment delay.

It is difficult to determine how many Canadians seek treatment abroad rather than awaiting their turn, but Hazel and Esmail estimate that more than 30,000 Canadians received care abroad in 2008.

“The calculations provide some insight into the number of Canadians who might choose to stay in Canada and pay for treatment in their home province, if only that province’s government would deviate from the status quo and allow them to do so.” This is a significant economic loss to Canada.

This number represents about 0.8% of all patients in Canada. It is a slight decrease from the 1.2% who went abroad for nonemergency treatment in 2007. The decrease occurred at a time when the median wait time for medically necessary procedures dropped by about 7 days: from 128 days to 121 days between a primary physician’s referral and treatment.

The improvement in wait times is minimal even though the Canadian government is devoting record amounts of tax receipts to the medical system. (Fraser Forum , December 2008).

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AARP rakes in cash from seniors’ insurance

Friday, January 16th, 2009

Seniors may think they save money when they buy AARP insurance, but if they take the trouble to compare competing products, they may be paying twice as much.

AARP brought in nearly half a billion dollars in 2007 from fees insurers pay for AARP endorsement. It also gained about $40 million from holding the clients’ premiums for a month and investing them.

The revenue helps pay down the $200 million bond debt that funded the organization’s brass and marble headquarters in Washington, D.C.—which is closed to visitors, purportedly so staff can work.

Royalties and fees now constitute about 43% of AARP’s revenue, up from 11% in 1999.

According to a 2007 Harris poll, AARP ranks third behind Consumer Reports and the American Red Cross as a trusted large advocacy group influencing U.S. politics. AARP is considered the most powerful interest group in the United States.

“They don’t even have to give any campaign contributions,” observes James Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington. “AARP’s enormous clout comes from the threat that they could defeat people in Congress who don’t do what they want.”

AARP lobbied against Bush’s proposed overhaul of Social Security, and for the Medicare prescription drug benefit. When Part D passed, AARP was able to expand its contract with UnitedHealth Group, which underwrites its Medicare supplemental insurance plan.

“I was kind of shocked,” said one member, who found out he was paying $1,079 more for his AARP auto insurance than he would have paid for a Mutual of Omaha policy. “They’re making money on the backs of old people” (Gary Cohn and Darrell Preston, Bloomberg.com 12/4/08).

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Posted in Uncategorized | 8 Comments »

AMA advocates mandatory insurance and a progressive health insurance tax on “rich”

Tuesday, January 6th, 2009

In its new health reform policy, replacing Health Access America, the American Medical Association writes: “We also believe that individuals with high incomes have a responsibility to obtain coverage for themselves and their families.”

Persons with an income greater than 500% of federal poverty ($49,000 for an individual, $100,000 for a family of four) would face tax penalties for not obtaining acceptable coverage. This “responsibility” is distinguished from a mandate in that there would be no criminal penalties, notes the AMA Health Policy Group.

High-income persons, however, should not get an “unfair and inefficient” tax break. Instead of simply eliminating the tax exclusion or providing the same benefit for all, including those who individually own their policies, the AMA proposal would make health insurance purchase a form of progressive taxation, through refundable, advanceable, income-based tax credits.

“The AMA proposal would expand insurance coverage by redirecting the current health insurance subsidy from higher to lower income groups.”

For example, considering a family with income $50,000 and one with income $150,000, the “effective premium” for a $10,000 policy would go from $8,875 now to $4,000 for the first family, and from $7,900 to $10,000 for the second.

This means that if a family earns three times as much, it would have to pay 250% more for insurance.

Apparently, the AMA believes that everyone except the poor should have to spend an approximately equal proportion of income on health insurance. The coverage for the second family is “still a lower proportion of income” than spent by the first (6% vs. 7%).

The Health Policy Group does not comment on the fact that more than 15% of U.S. GDP is spent on medical care—or for the “responsibility,” enforced by criminal penalties, that high earners have for paying taxes to support public programs.

Other features of the AMA proposal: it “allows for the continuation of employment-based insurance in the private sector”; it does not allow the use of tax credits for out-of-pocket expenses, as this could reduce incentives to purchase insurance and encourage “excess” use of health services [emphasis added]. The latter would also help defeat rationing efforts by third parties.

The AMA states that it does favor encouraging individually owned insurance and a reduction in benefit mandates.

According to an Arizona Medical Association delegate, AMA officials are engaged in high-level meetings with Obama, Baucus, Daschle, and Kennedy.

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Posted in Uncategorized, mandatory insurance | 15 Comments »