Wednesday, March 31, 2010

Senator Roland Burris to Hickey - What do you want on your Tombstone?

Boy what a great guy! Roland just sent me a note telling about all that he has done to and for me and my kids!

"Hey, I got this one, Hickey! Put your money away!"

Well, Senator, I'll have the pepperoni, mushroom, green olive, onion, extra garlic and just a handful of spinach on my Tomstone, Senator! What'll you have on your's?

Que Hombre!

My fellow Illinoisans,

After nearly a century of false starts and following more than a year of national debate, my colleagues and I have finally passed sweeping health reform legislation, which President Obama signed into law.

We?ve achieved historic reform ? but many Illinoisans have been left wondering: ?What exactly does this mean for me??

There are a number of key provisions that will take effect almost immediately. These include:

- Tax credits for as many as 144,000 small businesses in Illinois
- Immediate access to affordable coverage for 201,233 Illinoisans who are currently uninsured due to a pre-existing condition
- Medicare improvements and lower-cost prescription drugs for 1.8 million Illinois seniors
- Prohibiting insurance companies from using pre-existing conditions as an excuse to deny care to 3.2 million Illinois children

And this is only the beginning. Once the new law is fully implemented, family health insurance premiums will be reduced by $1,630-$2330 with no reduction in benefits. Up to 1 million Illinoisans will receive tax credits. Approximately 1,100-1,700 jobs will be created in our state. A total of 570 Community Health Centers in Illinois will receive additional funding.

In Illinois and across the country, this landmark reform law will provide tremendous benefits in both the short term and the long term. It is even projected to cut our deficit by $143 billion in the first ten years and an astounding $1.3 trillion in the decade after that.

Please log on to my website at to contact me with any questions or concerns and find out about the work I?m doing on your behalf in Washington. On the issue of health care reform and on every other challenge we face, I am proud to represent you in the U.S. Senate, and I remain committed to fighting for your interests every day.

Roland W. Burris
United States Senator

Really, how about Repealing this nonsense. It is the worst legislation to come down the pike and down our throats in . . .forever . . . or at least 75 years as this Virginia businessman says.

Here's why from David John Marotta who runs a Wealth Management Company, Senator:

The bill requires all Americans to have health insurance and imposes a $900 fine for not having it. And all health insurance companies must insure people for the same price regardless of any preexisting conditions.

In the past people would pay thousands of dollars for health insurance so it would be there if they needed it. Now they will be able to pay a $900 fine and still be guaranteed insurance even after they develop a serious illness. As a result, healthy people with insurance will do better to drop their coverage and pay the fine until they get sick and need health care.

Rather than increasing the rolls of the insured, this legislation could actually encourage healthy people to opt out of insurance. If insurance can’t discriminate based on my health before insurance, why pay a dime until my out-of-pocket expenses are expected to exceed the cost of insurance?

No insurance system can survive such folly. Savvy consumers will only buy insurance if they anticipate that their expenses will exceed what they pay in premiums. Insurance companies will have no way to screen for a truly average risk pool. As a result, costs will go up until even the sick won’t want to buy insurance.

The bill also provides measures for cost containment, which generally means it will be harder for doctors to get paid for their work. As much as half of the expense of running a medical office is trying to get reimbursed, and this legislation will only exacerbate the situation.

Although the details are not specified, much of the legislation will enable a broad range of powers to be granted to the federal government to use however it sees fit. Committees will decide which procedures are allowable and with what frequency. Technical groups will design the required reporting format for your private medical data. Stakeholder groups will fix prices after consultation with special interest groups. And new agencies will set minimum standards for health-care insurance. Patients pay for about 12 cents of every health-care dollar today. This is not enough to deter health-care consumption. Costs cannot be controlled when the person who pays for a service, the person who benefits from a service and the person who grants the service are all different. Only when most of the money spent comes out of pocket will people have a vested interest in cost containment. Empowering patients to make their own health care decisions is the only viable solution. Although the best economic alternative is having more out-of-pocket dollars, the current legislation requires insurance to pay at least 85 percent of health-care costs.

That last part may kill Health Savings Accounts, which could save much of what ails our health care system. HSAs are coupled with a high-deductible health insurance policy. Such policies are extremely inexpensive.

HSAs are based on the principle that because you pay the high deductible, you are motivated to keep costs low. And because you are unlikely to reach your deductible, your insurance costs are low. Insurance is affordable only when the likelihood of using it is low. An added benefit is that employees own their own health insurance. Hence it is completely portable. If they are laid off or decide to work elsewhere, they can take their insurance with them. In every way, privatized HSAs are working to contain costs. Given the new requirement that 85 percent of costs must be paid by insurance, HSAs will probably not survive the federal bureaucracy.

You can compare the current legislation to having grocery store insurance that pays for the first dollar you spend. Everyone in our risk pool will order filet mignon. First the costs will skyrocket. And then the meat will be rotten.

It isn’t just that some portions of the bill are poorly implemented but the broad scope of the legislation could be fixed. It is fundamentally wrong. And it will have implications that will impoverish rather than empower individuals. The result is not good intentions with unintended consequences, but in fact ill intentions with disastrous consequences.

Only a utopian centralized planner could believe we will be able to anticipate or correct the consequences going forward. The unknown unknowns are liable to produce even more dire meltdowns. Government intervention, monopoly and regulation cause the rigidity that in turn provokes economic forces immune to market adjustments. Bubbles, shortages, deficits, defaults and moral hazard will result.

Once the government competes with the private sector, there is no competition. It is like the referee starting to play on the field. The government has banned private companies from competing with them on mortgages, Social Security and the U.S. Postal Service, and we all know how well those organizations are run.

Quality health care will suffer a similar fate. There is no systemic regulator for expenses, and consequently costs will go up and benefits will dwindle. As a result, the subsidy of the truly needy will be completely swamped by a tsunami of middle-class entitlements.

The current legislation has left undone the incentives to provide quality lowest cost health care. And it is put in place incentives that work toward impoverishing the quality and economics of our current health care system. For these reasons and many more, the current legislation is the worst legislation passed by Congress in the last 75 years.

Cool Drool! Thanks for thinking of me and the kids, Senator.

David John Marotta is the president of Marotta Wealth Management INC. of Charlottesville, providing fee-only financial planning and wealth management at Questions to be answered in the column should be sent to questions@emarotta.comor
Marotta Wealth Management INC.,
One Village Green Circle, Suite 100,
Charlottesville, VA 22903-4619

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