Baazill's Blog

So I have been listening to all of the talk about healthcare from both sides.  Frankly, both of their plans seem utterly rediculous to me.  McCain is talking about deregulation.  His big pitch is that he wants to open the market up so that anyone can buy a plan from anywhere across the country.

Let's think about this deregulation for a minute and what it actually means.  Remember in the late 1990s when deregulation of the Power Industry was such a big talking point.  Oh, you'll be able to shop your power business around to the lowest priced power provider.  Well that worked out really well didn't it?  We still don't have cross section markets and power costs have continually risen.  So what would deregulation mean to the Health care, and particularly Health Insurance Industry?

To really know what it means, it is helpful to know how Health Insurance companies work.  These companies pay doctors and hospitals based on fees laid forth in contracts.  Each Health Insurance company has a contract with each Doctor and hospital, thus the provider books that we each get.  If a doctor or hospital isn't on the list, the company does not have a contract with them. 

Ok, so what does that actually mean?  That means that for deregulation to work as McCain is saying, each Health Insurance company across the country would have to contract with doctors and hospitals all over the country to be able to offer effective insurance in those areas.  The result is exploding costs for Health Insurance Companies who must increase their contracting departments 10 fold to handle all of these contract negotiations and contract management, and we all know who those costs are going to be passed through to don't we????  That's right, the consumer.  What this ultimately means is that McCain's deregulation will have little to no effect on what plans are available in what areas of the country.

Oh, and yes, since folks will be getting a tax break for Health Insurance, don't think that employers will feel the need to keep carrying it for their employees.  And I've never really heard, is this a "Tax break" meaning that the $5000 is added to my refund or subtracted from what I owe, or is this a "deduction", to which the real returns are a small percentage of the $5000?  Haven't heard an answer to that one.  Either way, a family plan is much more than $5000/year, so that's more out of pocket.