By Ronald S. Bella
I spent the early part of my career as a financial controller and CFO in manufacturing, cable/broadcast television and state government. I spent the second half representing software development corporations by consulting with client organizations implementing accounting systems. Often the competition came from internal forces that believed in developing their own software. One common piece of advice I gave these clients was a policy I had in my own organizations: “Never build your own payroll system.” The reason: You have no chance to be a hero. The very least expected is perfection.
I give this same advice to the Congress. Do not build your own health-care system. The very least everyone will expect is perfection. Let those who are expert in the industry and who have experience doing this handle the health care and market the health-care insurance.
This can be accomplished with a simple repeal of the Affordable Care Act followed by:
- Repeal all laws that tell insurers what they must cover;
- Repeal all laws that tell insurers who they must cover;
- Erase all boundaries that inhibit competition within and among the 50 states;
- Pass tort reform to protect doctors from malicious lawsuits, requiring the loser to pay all court costs and attorney fees of both the plaintiff and the defendant; and
- Increase penalties for the crime of insurance fraud.
In addition, allow our state and local governments to work independently or with charities to take care of those who then cannot afford insurance or who are not insurable. Let them deal with the estimated 20 million rather than asking the federal government to deal with 320 million.
Republicans refused to cast a single vote in favor of the Obamacare monstrosity. It should thus be very easy for Republicans who opposed this law so vehemently to repeal it. Republicans have already passed multiple bills to repeal the law. It is apparent that these bills were prepared merely for political consumption and submitted with the knowledge Obama would veto them.
Our problem now is that the Affordable Care Act is now an entitlement. Congressional representatives become frightened once they have created a dependency. They fear taking it away.
Medicare, an entitlement, passed in 1965.
“Nearly 50 years ago, at the time of Medicare’s enactment, it was projected that the federal government would spend $9 billion on Part A hospital services in 1990. Actual spending in that year totaled $67 billion – an increase of 644 percent compared with initial estimates.
“Likewise, government officials originally projected that Medicare Part B physician services would require ‘federal appropriations of about $500 million a year from general tax revenues.’ Last year, the federal outlay for that program was $163.8 billion – overshooting the original estimate by more than 4,400 percent.”
– former Sen. Jim DeMint, R-S.C., writing in the Wall Street Journal, Oct. 17, 2013
Social Security was to involve a small 1 percent contribution on the first $3,000 of taxable wage from both employer and employee ($60). Today the payroll tax is 6.2 percent of the first $127,200 of wages ($15,773). You may not see the employer contribution, but it is a part of the cost of employing you and would be in your pocket were it not contributed to your account by them.
Look long and hard at the Affordable Care Act. Like Medicare, like Social Security, the Congressional Budget Office wildly underestimated what the impact would be of the Affordable Care Act. Premium estimates, deductibles, health-care costs, participation estimates, hospital, clinic, physician participation were all poorly estimated. Many have insurance they are unable to take advantage of because of high deductibles. Many reside in counties with no insurer. Many continue to prefer the penalty than to participate in the ACA. Yet we hang on the CBO estimates with baited breath.
There is this predisposition on the part of so many, especially in the media, that unless the Congress solves a problem through legislation, it remains unsolved. The reality is that government seldom creates a solution, only more problems. This is the nature of government. The surest result when Congress creates something that is free to you is increased cost and increased taxes that directly take money out of our pockets or that hurt us indirectly through a strangled economy.
Congress should never build its own health-care system any more than I would want to build my own payroll system.
Ronald S. Bella, CMA, MBA is retired from a career as a consultant, controller and CFO.
