ObamaCare and Risk

by Bill O'Connell on November 19, 2013

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As we watch ObamaCare crumble before our eyes, like the cityscape in the movie Inception, I can’t help but wonder how we got into this mess. It is not just that ObamaCare was an awful fix to the problem that preexisted it, but that the solution so thoroughly misunderstood the problem.

You hear terms bandied about like health care and health insurance and the media and ObamaCare supporters use them interchangeably, but they have very different meanings. Health care is what we want from our doctors, health insurance as it is known today is a misnomer.

The Concept of Risk

To talk about insurance you first have to understand risk. What is risk? Risk is something that might happen, not something that has happened and it is usually understood as something bad. Consider you are a general contractor building a house on a schedule and a budget. You are faced with a number of risks. Risks such as the impact of weather on your schedule, and the risk of someone getting hurt on the job.

When faced with risks you can decide to take certain actions. If the likelihood is small, you may just accept the risk and deal with it if it shows up. If the risk is manageable, such as delays due to weather, you may budget some additional money for overtime to get back on schedule if you face a delay or pocket the money or give it back to the owner if it doesn’t. If the risk is large, such as a lawsuit from an injured worker, you can transfer the risk to someone else. The most common way to transfer risk is through insurance. The insurance company bundles many unlikely events together knowing they may have to pay on some of them, but not many. In return they calculate that payout, their overhead and profit, and spread that cost over their many insured, who pay them premiums. As the general contractor, you have a predictable expense in the form of premiums, and the risk is transferred to the insurance company if somebody actually get hurt.

Risk versus Certainty in Health Care

The insurance concept works well where there are rare but expensive events. The concept breaks down completely if you are dealing with certainty.

What is the likelihood that you will contract a disease that will be very expensive to treat versus what is the likelihood you will go to the doctor? The former is a risk, the latter is not. Based on probabilities and costs, an insurance policy can be developed that can protect you from a financial catastrophe if you do contract such a disease and the cost of the premium will be less than the cost of treating the disease. Where you will lose is if you stay healthy. You pay the premium but never need the insurance.

Where the concept falls apart is when dealing with certainty. If you go to your doctor for an annual physical that is a certainty. Whatever the cost of the examination, it will have to be paid. You may believe you have great health “insurance” so you don’t pay for doctor’s visits or you pay a modest co-pay, but what you don’t pay at the doctor’s office you pay with your premiums and you pay a lot.

Let’s say a good physical costs $250 to perform. If you go to the doctor and pay that directly it will cost $250. If, however, if it is “free” through your insurance provider, the insurance company has to shell out the $250. For them to do that takes a lot of paperwork both on their part and the doctor’s office. Add to that the insurance company’s overhead and profit and the cost may rise to $500. Because this is a certainty, everyone has to pay for it, it doesn’t get spread over a wider group of people, so in your premium you pay for it as $500 rather than $250. Even if it is paid by your employer, that is really your compensation, so you are still paying for it.

Consider all the other “free” stuff that is packed into ObamaCare, like birth control pills. You have a widely available product that costs around $10 per month and by pushing it through a third-party payer (i.e., the insurance company) the cost gets driven up to $15. Why is this a good thing? It is not, and it is one of the reasons that health care costs are skyrocketing.

True Insurance

If we focused on true insurance, what we need to protect us from financial catastrophe and get insurance for that, but pay for certainties out of our own pocket it would not only cut out a lot of inflated costs, but it would bring the power of consumer shopping into the mix putting downward pressure on providers. Ask yourself why the cost of Lasik and cosmetic surgery costs have steadily fallen while the quality of customer service has risen and you will find your answer. They are not covered by most insurance plans.

Add tort reform to this, so that doctors are not practicing defensive medicine by ordering every test under the sun “just in case”, and we might really start to bend the cost curve down. But if we believe that replacing the insurance companies with one big government bureaucracy is the answer, enjoy your ObamaCare. You are well on the way to having an all-inclusive health plan. Unfortunately, that has nothing at all with you being able to get good health care. The are not the same. There is a free market solution to the problem. It is not ObamaCare.

 

That’s my opinion; I’d like to know yours. Please comment below.

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President Barack Obama made an impromptu visit to the White House Press briefing room on Friday. He wanted to speak to the press corps, sans teleprompter, and share his thoughts on the Trayvon Martin case. He had previously raised the profile of this case by saying that if he had a son he might look like Trayvon.

When the case ended, he said the jury had spoken, and we respect their decision. That was good. But in his remarks on Friday, he seemed to stoke the racial fires again. He wanted to add his perspective as a black man in America, albeit while holding the most powerful job in America. For those of us who are not black we are constantly being told we don’t understand, we can’t understand, and oh, by the way we’re all racist.

If President Obama is serious about solving the problem, perhaps he would be willing to take a moment and see the other side of the coin. As Stephen Covey said, “Seek first to understand, then to be understood.” I would like to rebut some of the president’s key points and then offer him a view of the world from the other side.

Some of the President’s Key Points

 I think it’s important to recognize that the African- American community is looking at this issue through a set of experiences and a history that — that doesn’t go away

Perhaps one of the reasons that this doesn’t go away is that there is a group of people whose livelihoods depend on promoting racial animosity. The president says he wants an honest dialog on race, and I believe many off us do, but when those who do not toe the line of the race baiters, we are shouted down as racists. Just think of how many times the Tea Party supporters are branded as racists without any proof.

There are very few African-American men in this country who haven’t had the experience of being followed when they were shopping in a department store. That includes me. And there are very few African-American men who haven’t had the experience of walking across the street and hearing the locks click on the doors of cars. That happens to me, at least before I was a senator. There are very few African-Americans who haven’t had the experience of getting on an elevator and a woman clutching her purse nervously and holding her breath until she had a chance to get off. That happens often.

If you replaced African-American men in Mr. Obama’s analogy with white tattooed bikers, would the reaction be any different? Hardly. They would be followed, at a safe distance, the car door locks would click and that same woman would clutch her purse just as tightly. Is it profiling? Yes, is it racial profiling? No. There was a recent Volkswagen commercial where a white guy goes into a convenience store wearing a ski mask. He was wearing the mask because it was winter and he and his friends were driving around with the top down. But all the patrons in the store thought they were about to be held up. Why did they feel that way? Because of profiling.

Profiling is in our DNA. It is how we survive. If you see a bear in the woods, you become very aware and very wary. It doesn’t matter if the bear is black, brown, or white. Bears are dangerous. Take caution. If you then saw a horse, you would not be equally alarmed, again regardless of color. If a young man dresses like a gangsta with the waistband of his jeans down below his butt cheeks showing a generous 8”-10” of his boxer shorts, people will not assume he is collecting for the Red Cross. If young black men who dress a certain way are seen on the evening news every night as being sought by the police that goes into people’s databank. When they see a person fitting that profile on the street, their gut tells them to be wary. The profile of the white biker would have a similar effect. It is not racial profiling, it is not racist. Ask Jesse Jackson, “There is nothing more painful to me at this stage in my life than to walk down the street and hear footsteps and start thinking about robbery. Then look around and see somebody white and feel relieved.” Either we’re both racist or we are not.

Now, this isn’t to say that the African-American community is naïve about the fact that African-American young men are disproportionately involved in the criminal justice system, that they are disproportionately both victims and perpetrators of violence. It’s not to make excuses for that fact, although black folks do interpret the reasons for that in a historical context.

As Frederick Douglas said, “We have to do with the past only as we can make it useful to the present and the future.” Seventy-five percent of black children were not born out-of-wedlock in the 1950s. What is the historical context that destroyed the black nuclear family? Could it be The Great Society rather than slavery and racism? Why does the future look so bleak to young black men? Could it be the failure of government monopoly schools, coupled with demands for minimum wages above the economic value the employer gets in return?

So — so folks understand the challenges that exist for African- American boys, but they get frustrated, I think, if they feel that there’s no context for it or — and that context is being denied. And — and that all contributes, I think, to a sense that if a white male teen was involved in the same kind of scenario, that, from top to bottom, both the outcome and the aftermath might have been different.

Maybe they get frustrated by seeing you, Mr. President, sending your daughters to Sidwell Friends Academy while mothers in Washington, DC, have to send their children to the dismal public school system while you work so hard to prevent school vouchers in the district to curry favor with the teachers unions. The public schools have a 56% graduation rate in DC, but where vouchers are used the rate is 82%. So why are you, Mr. President, standing in the way of these children’s success rather than being its champion?

With regard to your assertion that had it been a white male teen had been involved instead of Trayvon Martin, the outcome might have been different, consider the case of Roderick Scott, a black man, who went out of his house to confront a trio of teens breaking into cars in Greece, New York. Scott said he told the three to freeze and wait for the police. One of the three charged him and Scott shot him twice, killing him. The jury believed Scott was in fear for his life and found him not guilty. On the other hand, what if Zimmerman was black. Would this have found its way onto anyone’s radar?

But beyond protests or vigils, the question is, are there some concrete things that we might be able to do? I know that Eric Holder is reviewing what happened down there, but I think it’s important for people to have some clear expectations here. Traditionally, these are issues of state and local government — the criminal code. And law enforcement has traditionally done it at the state and local levels, not at the federal levels.

Eric Holder? Really? The same Eric Holder who dropped the case against the New Black Panther Party.  The New Black Panther party members stood in front of a polling place with clubs and talked trash to whites coming to vote, about now  being ruled by a black man now. Do you think that might damage your credibility with whites when you say you want to have a conversation about race?

Along the same lines, I think it would be useful for us to examine some state and local laws to see if it — if they are designed in such a way that they may encourage the kinds of altercations and confrontations and tragedies that we saw in the Florida case, rather than diffuse potential altercations.

No, Mr. President, it would not be useful for you to get involved with local laws. That is not your job. For someone who proclaimed to be a constitutional “scholar” you seem to know little about federalism and the ninth and tenth amendments.

And for those who resist that idea that we should think about something like these “stand your ground” laws, I just ask people to consider if Trayvon Martin was of age and armed, could he have stood his ground on that sidewalk? And do we actually think that he would have been justified in shooting Mr. Zimmerman, who had followed him in a car, because he felt threatened?

It’s hard to know where to start on this one. Stand Your Ground laws do not give someone the right to shoot anyone who approaches them. Stood his ground against what? Zimmerman was following him; not bull rushing him; not attacking him. It was Martin who attacked Zimmerman. Since we’re speculating, what if Zimmerman never got his gun out and Martin beat his head on the ground one time too many and killed him? Would you be calling Trayvon your son, or would you say that could have been you thirty-five years ago?

In Florida, blacks have made about a third of the Stand Your Ground claims in homicide cases, double their makeup of the population. So Stand Your Ground laws have disproportionately helped blacks. Is that what you want to fix?

Closing Thoughts
There is no doubt that this is a tragedy. Slightly different behavior on the part of both Zimmerman and Martin and this wouldn’t have happened the way it played out. But if we want to have a serious conversation about race, we can’t have one side present their views and then stick their fingers in their ears, stomp their feet and cry, “Racist! racist!” when the other side speaks. Since you shared your perspective, let me enlighten you to how someone on the other side sees it.

When the Zimmerman verdict came down, there was no cheering and dancing in the streets by whites, but there was rioting by blacks. I viewed it as a tragedy, but one where our justice system worked. I remember watching a scene in a beauty parlor just prior to the verdict being announced in the O.J. Simpson trial. There were a row of black ladies seated under hair dryers watching the news. When the verdict was read all the ladies jumped out of their chairs cheering and screaming. Simpson nearly beheaded his white wife and her white friend and these women were cheering? A reaction such as relief, I could get that, but joy?

When the Rodney King verdict was read, riots broke and an innocent white truck driver Reginald Denny found himself  in the wrong place at the wrong time, dragged from the cab of his truck and his head smashed with a cinder block by some of the black rioters. It seems that if the system is only fair if the black community agrees with the verdict. I listened to numerous interviews where people were asked if the trail was fair and almost everyone agreed the trial was fair, the jury was not racist, and yet let’s break windows and burn cars if we don’t like the verdict. I am not naïve to ignore that there is a history of unfair trials involving blacks in this country, but when is the playing field leveled?

How long does the NAACP believe the federal government has to continue signing off on changes in voter laws in Southern states when the black voter participation rate is higher in Mississippi, Georgia and North Carolina is higher than whites? Even Massachusetts has a poorer record than Mississippi. How long does affirmative action go on, which is discrimination against other races by definition. Can we look at our black president and say maybe it’s time to say mission accomplished and move on to a merit system. How long do we look at the failures of the Great Society before we say let’s end that experiment and once again encourage the formation and continuation of the black nuclear family? When do we give every child an opportunity scholarship to go to a school of their choice rather than condemn them to failing schools, illiteracy, and a life of poverty?

If you want to talk to me about race, know this. I am a Frederick Douglass Republican. Like Frederick Douglass I believe in the following:

  1. Respect for the Constitution – “The American Constitution is a written instrument full and complete in itself. No Court in America, no Congress, no President, can add a single word thereto, or take a single word therefrom. It is a great national enactment done by the people, and can only be altered, amended, or added to by the people.” – March 26, 1860
  2. Respect for Life –“I expose slavery in this country, because to expose it is to kill it. Slavery is one of those monsters of darkness to whom the light of truth is death.” Slavery is not only the physical kind. Slavery is also being forced to follow a line of thought without challenge. Just think of how black conservatives are ostracized by the so-called black leadership
  3. Belief in Limited Government – “What I ask for the Negro is not benevolence, not pity, not sympathy, but simply justice.”
  4. Belief in Individual Responsibility –“..And if the Negro cannot stand on his own legs, let him fail also. All I ask is give him a chance to stand on his own legs! Let him alone…your interference is doing him positive injury…I prayed for twenty years but received no answer until I prayed with my legs. Man’s greatness consists in his ability to do and the proper application of his powers to things needed to be done.”

Mr. President, if you want to have a conversation about race, stop lecturing and start listening.

 

That’s my opinion. I’d like to know yours. Please comment below.

 

 

 

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by Bill O'Connell on February 20, 2013

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As the left tries to find more and more ways to violate our Constitutional rights, we have the Vice President of the United States offering advice to responsible gun owners, or those considering buying guns that is extraordinarily dangerous. For someone who is hell-bent on ending gun violence he recommends reckless gun handling that could easily get an innocent person killed or injured.

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by Bill O'Connell on January 20, 2013

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Beslan Memorial

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by Bill O'Connell on January 17, 2013

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On December 14, 2012 a 20-year old madman slaughtered twenty children and six adults in the Sandy Hook Elementary School in Newtown Connecticut. It was an act so heinous, the mind struggles to comprehend it.

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by Bill O'Connell on November 29, 2012

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by Bill O'Connell on November 27, 2012

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Let’s recap what the winners in the recent election ran on. The Republican and conservative message was strongly against raising taxes and it was also for undoing ObamaCare. President Obama ran on raising taxes on the wealthy and saying he was a lesser evil than Romney. The Republicans maintained control over the House of Representatives. President Obama was reelected.

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Democrats Set to Push Republicans Over the Fiscal Cliff

by Bill O'Connell on November 26, 2012

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In watching the talking heads on the news, as ways to address the fiscal cliff are discussed, it is very clear how irresponsible the Democrats are. When a Republican in interviewed, such as Lindsey Graham, Saxby Chambliss, John McCain, they talk about trying to work something out. What that really means is how they will break their no new taxes pledge, provided real spending cuts are on the table. Then the discussion drills down on how much in new taxes they would support. When a Democrat is interviewed, such as Dick Durban, or Chris Van Hollen, the talk is about how much taxes have to increase. Nobody is talking about spending cuts in any meaningful way.

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by Bill O'Connell on November 24, 2012

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One of the key failures of Republicans has been their failure on messaging. The Democrats start telling a tale and repeat it with the determination of a Sham-wow pitchman. The Republicans shrug it off as nonsense and then are shocked on election day to find out that millions of people now own Sham-wows.

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