To the Editor,
The current health care reform debate is full of misconceptions, half-truths, downright lies and nonsense. Many people are rightly angry about increasing health care premiums (much faster than the rate of inflation) but fail to notice why these increases are occurring. In 2007, the average annual premium in New Jersey was $5,326 for singles and in New York $12,254 for a family, versus the national average of $2,613 and $5,799. Why are they paying so much more?
One, they have "community rating" and "guaranteed-issue" provisions, which ObamaCare would impose on all of us. Community rating doesn't allow insurance companies to vary premiums for those who habitually drink, smoke, eat junk food and do drugs. A person who takes care of himself will pay the same premium. That is simply not fair and everyone will have high premiums. Guaranteed-issue means you have to be issued a policy, even if you've voluntarily gone without health insurance. One can wait until they need health care to buy it, that is also counterproductive.
Secondly, almost half of all health care expenditures are covered directly by government entities (which implement price controls on doctor reimbursement) and only 12.2% of health care expenditures are out of pocket today, meaning almost 90% of this is either third-party payments by insurers or the government. That causes premiums to go up for anyone who does pay out-of-pocket. The number of mandates on health insurance policies has also gone up markedly in the last 50 years. Health insurance companies only averaged a profit margin of 2.2% in 2009, much lower than most industries. Google's profit margin, for example, dwarfs it.
Our health care system needs some reforms, but the proposals by liberal Democrats will only make it worse.
John K. Peterson
State Center, IA 50247