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Blog Directory Del's Perspective: May 12, 2009

Tuesday, May 12, 2009

Something is Rotten in the State of ________! (Part 1)

Okay, I am not Marcellus who spoke of corruption in the State of Denmark in the wonderfully written Hamlet. The old Bard had it right when he spoke of rotting from the head down. In this case, the health-care industry.
Amazingly, six giants of the industry promised (vowed) to find a way to lower health-care premium costs to about $2,500 per year for a family of four. In a vaguely written letter to Prez. Obama, they boldly stated that such a reduction could save over $2 trillion in 10 years. Suggesting that they (heroically) will save the nation's deficit.
This is where is gets confusing. Maybe you can help me get the concept. Here I have degree in economics and I am still wagging my head in bewilderment. So maybe you could can clear up the math for me.
They said they will find a way to squeeze 1.5% from their savings per premium per year to generate this huge sum. That's right 1.5%. Oh, Boy!
Follow me on this: My health insurance cost me a little more that $12,000 per year. This great industry says it will pull a whopping $120 from that sum and put it in a fund to help generate $2 trillion.
Every year my premium costs explode in increments of $500 to $1,000 units.
Are they saying they won't increase health care cost over the next ten years and hold all variables?
That's the problem. They aren't saying a damned thing. Much like Marcellus, I suspect something is rotten because I smell a huge damned rat
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