Wednesday, September 16, 2009

The Illusion of the Government Co-op.

Seems that the liberals are up to their old tricks. I often have a saying, "A skunk by any other name will still stink just as badly." If the direct approach doesn't work, then wrap it up with a different label and claim it's sweet when it's still the same shrill. This idea of a co-op is just a back door method of enacting the single payer government program. What many Americans don't know is California has such a co-op insurance program . . . for worker's compensation. It's called the State Compensation Insurance Fund. It's also one the most corrupt, wasteful, and disdained agencies in the state. Just ask Tim at West Coast Rebel about it since he's a business owner, he's required by law to have it. Allow me to illustrate because what the liberals are proposing is exactly how this insurance system is ran.

The SCIF, or Woker's Comp as it's known here in the state, is a state backed insurance fund that's used to pay for health care if a person is hurt while on the job. It's paid by the employer to protect workers for work related accidents or injuries. They paid a percentage of their payroll which is suppose to be determined by certain risk factors according to the job within the industry and the payments are made on claims by workers when they get treated for work related injuries. The rates they pay I can't give details on since I'm still under confidentiality, but will say it ranges quite high in comparison to private insurance from other states. At least 3 and up to, and I kid you not, 12 times higher. What's worse, this state has the highest revenue in such a system of any state in the union. Yet, it has the worse benefit payouts. How and why is this?

The SCIF is regulated and run by our state legislature. They determine the rates, who gets what for what injuries, etc. However, you have to understand which people in our state gets elected to such positions. Yes, you got it: LAWYERS!!! So most of the benefits and the claim procedures go through a LOT of legal channels that takes so much money that when it's said and done, the recipient gets maybe 20 cents on the dollar of the cost of the care of their injuries. What's worse is that there's a lot of fraud perpetrated by the lawyers so a lot of people who fake injuries burden the system. What's worse, since the lawyers for the state get a share of the compromised sum that's finally determined by the end of proceedings, they have no real desire to investigate or prosecute these fraudsters. We have the worse record for prosecuting fake injuries. I worked for a company that had a man claimed he hurt his back on the second day on the job. He hired a PI to investigate since Worker's Comp wouldn't and found him mowing the lawn, working on his car, doing projects in his garage and so on. What the state did was settled and hit the company with a tripling of the rate. If they actually prosecuted and found the man guilty, which he would had, the lawyers would get nothing. BTW, the man left the state and opened his own business of the same type from the settlement.

So in the end, we have massive corruption where both sides benefit from fraud or at least not investigating and prosecuting fraud. The ones who really get hurt (you can't get unemployment from a work related injury) have to wait up to two years and then get maybe 1/5 of the costs. Many get permanently disable while waiting to get the care they need. Many employers fear hiring or expanding because of this massive costs and some of the costs of this "insurance" is more than their payroll to tell you how bad it can get. Here, if you want to really put the fear of God into an atheist employer, just say WORKER'S COMP. Many are leaving the state because of this extortion.

What's worse is that private insurance has basically been banned. Insurance have to meet the "benefit" before legal fees in order to legally compete. Well, those benefits are pretty high because the lawyers want to bleed out of the system the most they legally can. Not to mention the regulations that are involved are so massive and restrictive that most insurance companies don't bother. The biggest cost for the private insurer is the legal costs because they not only have to pay for their lawyers, but the state's as well. I wonder why we pay taxes or these premiums. When the extortion is done, the client is left with just as anemic payout and get irate at the company and dump them. To private insurers, it's just not worth it. Not to mention out of staters can't offer insurance to us because of interstate commerce laws that forbid it. In the end, 98% of employers end up opting for the public co-op.

If you think this isn't going to happen if the federal government get their co-op, then you're either stupid, naive, or just plain crazy. When you can print dollars to low ball or regulate the crap out of the public sector, or worse since this the federal government, punish if you don't meet up with the impossible demands, how does having such powers not going to corrupt the industry? This is why I refuse to study for the Actuary exams, because if bills like this are passed, risk assessment is going to become irrelevant because the government will just print money to cover it. They have no motive to make a profit, to rein in corruption, to provide any product or coverage, so what good would having risk assessments be? In the end, employers are going to get fed up with paying high costs while the government can low balled the insurance companies by giving them a great discount. People aren't going to be allowed to purchase their own (we're not allowed by state law under SCIF), those that are healthy will be punished for it since even now they're being blamed for the high costs while illegals that contribute to the most of the high costs are going to be covered for free.

No, we need to see this illusion and red herring for what it is: another attempt of the federal government to control our lives by controlling 1/6th of the economy through our health care industry. We need not to be fooled by this skunk with a different name. It still stinks and still needs to be shelved with real reform. After all, there's still no regulation on the lawyers, their lawsuits and how much they can rape doctors and hospitals while their victims will have wage and price controls on them. This will lead to great scarcity since there are very few places in California where you can get Worker's Comp care and no incentives for the best and brightest to spend 10 years in med school so they can make as much as a dishwasher and be raped for that by lawyers. This bill will make America just as sick and just as broke. Just say no because in California we have such and co-op and it proves that government healthcare is just an illusion.

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