Public Adjusters: A Battle Looms in Florida

March 5, 2010

By Russell D. Longcore

In the State of Florida over the last twenty years, Public Adjusters (PA) have been very successful in helping policyholders recover all the money they are entitled to collect.

Way too successful for the insurance companies’ liking.

So, a major battle is looming in the State of Florida over the business practices of Public Adjusters.

Three insurance associations are supporting legislation to restrict how Public Adjusters operate. The Florida Insurance Council, Property Casualty Insurers Association of America and the Florida Property Casualty Association issued statements which criticize Public Adjusters…who represent homeowners in the professional preparation of insurance claims…accusing them of “inflating” claims, driving up costs for all policyholders.

But think about it for a moment, friends. The insurance companies enter into agreements with the PA and the policyholder to settle a claim. That means that “a buyer and a seller” agree on a price. Nothing forces the insurance companies to agree to a price they believe is too high. The insurance companies simply hate the fact that a policyholder goes into the marketplace and hires a claims professional to represent himself in the preparation of his claim. That is akin to the IRS getting mad at people for having their taxes prepared by an accountant.

State Senator Mike Bennett, R-Bradenton, and Rep. Janet Long, D-Seminole filed new legislative bills in February. The bills (S2264 and H1181) seek to:

• Prevent Public Adjusters from soliciting customers either by phone or in person unless both parties had a prior knowledge of one another or were family members.

• Prevent PAs from sending mail to prospective clients in the first 30 days after a storm. Further, the bill seeks to force Pas to label their letters “ADVERTISEMENT” in 14-point font red letters.

• Prohibit PAs from informing a prospective client of their firm’s success record in obtaining claim settlements for policyholders.

• Cap fees for PA services at 10% for hurricane claims, and a 20% cap for all other property claims.¹

It is a criminal restraint of trade to suggest that a Public Adjuster cannot attempt to make contact with a prospective client for 30 days after a storm. After a major hurricane, communications systems are usually broken for a time. In most instances, the only way a PA can contact a prospective client in the dasy after a storm is through either a personal visit or mail delivery.

Insureds with damages have immediate needs for emergency board-up, mitigation of damages, Living Expenses and other policy benefits. The insureds will need this kind of help immediately, not 30 days after the storm.

There is no legislation that prevents a building contractor from soliciting business right after a storm. Same goes for a roofer, tree removal company, or a debris hauler. So, no restriction should be imposed on PAs either.

You don’t see a restriction on accountants in tax season. You don’t see restrictions on Personal Injury attorneys after accidents. Why pick on PAs?

Think about this also. Hurricanes happen in hot weather. Damages from water quickly become mold damages. Mold left untreated for 30 days could render a building entirely useless and could require demolition. Further, the insurance companies have written ironclad Mold Exclusions that you can be sure they would invoke.

The state legislators wish to deny policyholders the timely assistance in preparation of their insurance claims, under the guise of protecting the policyholders of the State of Florida. But this effort to too transparent not to be seen for what it is…a desperate insurance industry trying to maximize its own profits at the expense of the policyholders of the State of Florida.

A recent state study found that in the past six years, the Division of Insurance Fraud received 937 complaints about public adjuster-related fraud from insurers and policyholders. It investigated only 269 of the complaints and made 31 arrests from 2004 to 2009. Curiously, the study did not say how many complaints it had received from policyholders about their own insurance companies’ claims practices. Nor did the study show how many hundreds of thousands of claims had been filed from 2004 to 2009. But we do know that SIX major hurricanes struck Florida in that time period.

They were:

Charlie – Category 4
Frances – Category 3
Jeanne – Category 3
Dennis – Category 4
Katrina – Category 3
Wilma – Category 4

Let’s run some numbers to show how deceptive this report is and give some perspective.

Let’s say that the total number of property claims filed for all the listed hurricanes togetherover six years was 1,000,000 claims. You already know that this number is ridiculously small, since tens of millions of property owners suffered repeated losses in the hurricanes. But at 1 million claims, 937 complaints is less than 0.0937% of all the claims filed. That is less than one percent of a purposefully low estimate of claims. And in only 31 cases was there enough evidence for even an arrest, much less a conviction.

And 31 arrests…not convictions…over six years is not enough illegal activity to cause legislators to pass additional laws restricting the business operations of ALL Public Adjusters.

Looks to me like the Public Adjusters, taken as a group, are paragons of virtue. They should be praised, not pilloried…lauded, not legislated…decorated, not demagogued.

I wonder if Senator Mike Bennett and Rep. Janet Long would open up their financial records and disclose how much money they have received in contributions from insurance industry-related donors. My guess is that these Florida solons are bought and paid for by the insurance lobby.

Write to your own Senate or House representative and vigorously protest the enactment of these bills into law. Florida policyholders would once again be taken advantage of by the insurance companies if this bill is passed.

¹To read the bill for yourself, go to: Public Adjuster Bill

© Copyright 2010, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

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Secession and The Berlin Wall

November 9, 2009

I’m writing this article on November 9, 2009, which is the 20th anniversary of the “fall” of the Berlin Wall. What actually happened on this date twenty years ago was that the East German government announced that East Germans and West Germans would be allowed to visit each other freely. Throngs of East Germans climbed onto and crossed the wall. Over the next few weeks, people on both sides of the wall used sledge hammers to knock holes in the wall and topple large sections. Later, demolition crews removed most of the rest of the wall. German reunification was completed on October 2, 1990.

This event was a mind-blowing visual and emotional event worldwide, as we saw TV images of euphoric crowds celebrating, dancing and weeping at the Berlin Wall. Few really believed that the Soviet Union would collapse after only 69 years of existence. The Soviets rivaled the USA in military might, and they were as imperialistic as the Americans, exporting Communism around the globe.

But their Union unraveled, beginning in 1989 with the “glasnost” political reforms of Soviet President Mikhail Gorbachev. In 1990, newly-elected Russian President Boris Yeltsin led the Russian Congress to formally declare Russia’s sovereignty over its own territory, and began passing laws to supersede Soviet law. Russia was the largest republic in both territory and population in the Soviet Bloc.

A national referendum was held on March 17, 1991, with the majority of the USSR’s population voting for preservation of the Union in nine out of fifteen republics. But it didn’t matter. After the attempted coup d’etat against Gorbachev in 1991, Yeltsin emerged as the strongman, and Latvia and Estonia declared their independence.

By December of 1991, The Soviet Union had dissolved.

I was in Berlin in December 2003, performing with the Atlanta Symphony Orchestra Chorus and the Berlin Philharmonic. The Hilton Hotel where we stayed was only a couple blocks away from Checkpoint Charlie, one of the most prominent and widely-known points of passage between East and West Berlin. We walked to Checkpoint Charlie and were surprised to find that, even fourteen years after the Fall, East German buildings still looked gaunt and forbidding.

This little bit of history should give secessionists all over America a boost in morale.

Consider these six points:

1. The largest of the republics regained its sanity and seceded. That should give the Texas Nationalist Movement additional hope and perspective in their quest for a New Texas nation.

2. The bigger they are, the harder they fall. Prior to collapse, the USSR had the second largest economy in the world after the USA. The Soviet economy was a centrally-planned economy based on state ownership of industry and management of every facet of commerce. Washington is repeating the same central planning errors the Soviets could not make work. If the second largest world power in human history can dissolve, so can Number One.

3. Most of the people in the Soviet Union voted to maintain the Union, even though it had been the source of oppression and death for 69 years. That shows you how much suffering people will endure willingly like sheep. That also shows you that the suffering masses desperately need moral leadership.

4. Small republics like Latvia, Estonia, Lithuania and the rest of the 15 republics eventually became sovereign nations once more. They have thrived since. Small American states will also thrive when they become nations once again.

5. The USSR dissolved because the republics rejected national laws that conflicted with local laws. The republics also refused to pay tax revenue to the Moscow government. This caused havoc in Moscow. In the US, 39 American states have enacted sovereignty resolutions that assert their 10th Amendment rights. The American states are on the right path. Now will they do the right thing? (see Cowardice In State Government

6. The greatest complication for the American Federal Government, far greater than any complication that befell the Soviet Union, is that the US Dollar is the world’s reserve currency…the Ruble wasn’t. The nations of the world are forsaking the dollar because of Washington’s criminal counterfeiting ways over the years. Just as creditors can force a corporation into bankruptcy, the nations of the world will force Washington into bankruptcy and eventually the USA will dissolve.

So the fall of the Berlin Wall was much more significant to your future than you ever realized. Don’t miss the valuable lessons here. Just because America doesn’t have a big concrete wall doesn’t mean that we don’t have barriers to liberty. Oppressive government must be summarily rejected, and free people have a duty to either alter or abolish it.

DumpDC. Six Letters That Can Change History.

Copyright © 2009, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


The Stockholm Syndrome For States

September 10, 2009

According to Wikipedia, the “Stockholm Syndrome” is a psychological response sometimes seen in abducted hostages, in which the hostage shows signs of loyalty to the hostage-taker, regardless of the danger or risk in which they have been placed. The syndrome is named after a 1973 bank robbery in which the bank robbers held bank employees hostage for six days. In this case, the victims became emotionally attached to their captors, and even defended them after they were freed from their six-day ordeal.

This time, the captor is the Federal Government in Washington, and the 50 states are its captives.

The powers-that-be in Washington are accelerating the destruction of the United States of America. And the state governments stand by idly.

President Obama is proving to be “the new Boss, same as the old Boss.”

• He has not removed troops from Iraq to end our military presence there. Most troops that were removed from Iraq were redeployed to Afghanistan. The war in Afghanistan has been escalated. From that war, the American military has expanded that war into Pakistan. The fighting in Pakistan has a very real possibility of destabilizing the Pakistan/India relationship, which has been a decades-long powder keg.

• The operation of the American Embassy in Iraq, the largest embassy in the history of the world, continues unimpeded. America’s not leaving, folks.

• The American military is presently building new US military bases in Colombia, South America.

• Washington is still working behind the scenes to cause unrest in Iran, and an air strike is still an option. Covert military ops have been happening inside Iran for years.

• Washington has established an African Command for the US military, further expanding American hegemony worldwide.

• Congress is spending money like there is an infinite supply of it. They now own General Motors. They’ve bailed out carmakers, investment banking companies, lenders and brokerages with hundreds of millions of dollars that they don’t have.

• The Cap and Trade legislation, which would be the largest tax increase in the history of the USA, is still alive.

• The Congress wants to pass health care legislation which will change health care in America, and not for the good.

• The Obama Administration is surrounding itself with advisors who are avowed Communists, Socialists, and Marxists.

• The Federal Reserve continues to operate unchecked, with no oversight by anyone whatsoever.

• The Transportation Safety Administration tightly regulates all air travel within the borders of the United States. Piss them off and you don’t fly.

• The manipulation of the American economy by Washington continues. Between Federal Reserve monetary policy and a Congress that never saw a bill it would not fund, unemployment rises. Foreclosures mushroom. Bank failures increase. Bankruptcy is at an all-time high.

I could go on and on, but I think I’ve made my point.

Most Americans SEEM to be unhappy with the way our nation is being run right now. Obama’s approval numbers have slid to a place that only about 50% of those polled approve of his work. And NO ONE trusts Congress.

The tyranny of Washington continues. Washington has long forgotten that the Federal government was invented by the States to serve THEM.

The tail has wagged the dog since Lincoln lived in the White House.

The “State of the Union” means more than a propagandist’s dream on a January evening in Congress. The state of our Union is desperately bad and getting worse.

How much longer will the states allow themselves to be victims of a kidnapping?

How much longer will the states accept the devastation of our way of life that is pouring out of Washington like feces from a sewer pipe?

How much longer will states tolerate being ruled by an unconstitutional military-backed junta that has stolen our nation?

How much longer will states allow their own citizens to be taxed to death by a government no longer accountable to those very citizens?

When will states awaken from their long slumber and once again realize that they are sovereign and independent, and that they have the power to shake off the heavy burden of Federal tyranny?

Will it take hyperinflation to wake up the states? How high will the unemployment rate have to be? How high will the taxes have to get? How many unfunded Federal mandates will have to be imposed? Will a new law about firearm confiscation or regulation of ammunition be enough? What if Washington decides to once again make it illegal for citizens to own gold, and begins to confiscate gold?

Will the states continue to be the indentured servants of the Washington plantation until the day that the plantation collapses? Then, what will the states do? Will they become sovereign once again and assert their freedom, or simply look for another “Massa?”

The Boy Scouts of America have a two-word slogan: “Be Prepared.” Every ten-year-old scout in America knows that he should prepare for both good and bad. The sovereign states of the united States of America would do well to adopt the Boy Scout slogan and start preparing for an uncertain future.

My prediction is that the majority of the American states are so inured to the Federal shackles that they will stay with Washington no matter what. The states have developed a love for their own captors…the Stockholm Syndrome lives.

© Copyright 2009 by Russell D. Longcore.


Atlanta: A City Under Siege?

August 2, 2009

The Atlanta metro area suffered a siege led by a guy named Sherman back in the mid-‘60s. That’s 1860s. This time the “siege” is a massive new crime wave. Back then, the criminals all wore blue uniforms. Today, you’re more likely to see criminals in oversized T-shirts, pants down below their butt crack, and baseball caps on askew.

Every day’s news is filled with stories of car-jackings, daring daylight burglaries of homes, bank robberies and drive-by shootings. And Atlanta-after-dark is even more exciting. Murders are becoming so common that they are not the lead story on the evening news. Oh, no. The news directors think that gangs of thugs smashing through the front door of a blue jeans boutique and carrying out the inventory is more horrific than the loss of life. That probably has to do with the fact that there is security camera footage of the robbery, which can be shown on TV. Whereas, even footage of a murder would not be shown on TV. A visual medium will always default to a visual story.

It’s gotten to the point that it’s not safe to go to a gas station or through a fast-food drive-thru any more, as criminals are car-jacking people as they wait for their gas or food.

This past week, the CBS TV affiliate here in Atlanta has led its 6:00 newscast each night with the headline story, “Atlanta: A City Under Siege.” They stuck their microphones and cameras in the faces of Mayor Shirley Franklin and Police Chief Richard Pennington and demanded to know what THEY were going to do about this crime wave.

One of the big concerns voiced by the politicians is that Atlanta was going to become known as an unsafe city, which would affect the convention business negatively.

Really. That seemed to be their big worry.

The mayor and police chief have stated “No Comment” about this issue. The city of Atlanta is facing monstrous deficits and are cutting services and laying off workers at a dizzying pace. That includes police and fire personnel. The city has closed police and fire stations city-wide. Then, a couple weeks ago, the city council voted to increase property taxes by about 40% to generate some revenue. Even with the added revenue, Atlanta will not double its police force. And doubling the force would not make Atlantans more safe.

I’ve watched the media coverage of this crime wave pretty carefully. In nearly every incident, the criminals strike at unarmed targets. Rarely is there a story about a crime victim who is armed and either thwarts the crime, or shoots the perpetrator.

The TV stations seem to expect the city fathers to flood the streets with police officers, which is their stated solution to “protect us.”

One of the TV stations compared New York’s police presence with Atlanta’s force. Generally, there are 300 cops in New York for every 100,000 persons. Atlanta has about 150 per 100,000. This was supposed to bolster their assertion that more cops on the streets would make Atlanta safe.

But, as most thinking people know, police don’t protect the citizenry. They sometimes investigate crimes that have already occurred. The rest of the police seem to prey on the citizens in an effort to write tickets and raise money for the city.

The TV stations are not really serious about the safety of the metro area. But they are serious about the perception of a police presence that is supposed to make us believe we are more safe. The reason I can say this is that the TV talking heads NEVER recommend to viewers that they buy a gun and become proficient in its use. On the contrary. They want to see less firearms, not more.

However, forget the gun laws for a moment and just switch over to common sense and basic human action. If you are a person who has the intent to either steal from or assault another person, whom are you most likely to pick…an armed person or an unarmed person? Except in rare cases, the perpetrator will choose an unarmed person.

The greatest public service that the TV stations could do for the safety of the entire Atlanta metro area, some 5 million souls…is to vigorously promote gun ownership and responsible use of firearms. Criminals watch TV too. It would not take too long to change the perception of criminals that people are easy targets.

Advertising is advertising. If you see my message to buy a product often enough, it will change your perception about it. Coca-Cola knows this. McDonalds knows this. Likewise about firearms for protection.

What I would like to see is as many public service spots about firearms use for protection as we saw for the Congress-forced switchover to digital TV. After a while, honest citizens would change and so would criminals.

More guns in the hands of honest citizens would cause the crime surge to plummet.


Let Me Be King For Just One Year

July 16, 2009

Let’s face it, my friends. The Federal Government in its present form is irretrievably broken. No tinkering, no new President, no new laws will fix the Federal Government of the United States of America. If the USA wants to avoid mass state secessions, a radical change must be embraced.

We need to go in a new direction. Actually, to be more accurate, in an old direction.

Absolute Monarchy.

Think about it. A king is one guy. He only has about 18 hours each day to do kingly stuff. So, he can’t meddle in very much simply because he doesn’t have the time. Everyone in America would be a lot freer with a King on the throne.

So, I nominate myself, Russell D. Longcore, as the new King of the United States of America.

I don’t want to be King forever. I’ll take the job on a one year basis. I want complete, unchallengeable, absolute power for one year. Then, at the end of that year, the states can have an election to see if I get my job for another year. And on it will go until I don’t want to be King any more, or get voted out of office, or get assassinated by an unemployed lobbyist.

You don’t even have to call me “your Majesty” or anything like that. “Mr. Longcore” or “King Russell” will do nicely.

As the first Candidate for US King, here is what I pledge to do in my year. I have written this list in no particular order of importance, only as the ideas came into my mind:

• Set the salary of the King at $100 million per year. That’s still less than some corporate executives make.

• End the personal income tax: On my first day as King, income taxes are gone.

• Dissolve Congress: Who needs Congress when I’m King? Rex Lex and all that.

• Tell all the States that they are on their own for operations, including the coining of money and taking care of the roads.

• Dissolve All Cabinet-Level Departments except State, Treasury, Defense & Interior: Then, I’ll shrink those remaining Departments to about one-tenth their size, maybe less. I promise they won’t have much to do.

• Dissolve the Army: I’ll close the Pentagon and sell the building or raze it. We’ll go back to using state militias just in case Canada invades us. I’ll close West Point, too.

• Shrink the Air Force, Navy and Marine Corps to about 50,000 members each: If we’re only protecting our own borders, we don’t need all that hardware and manpower.

• Mothball 50% of all military ships and aircraft just for a start.

• Order the dismantling of 90% of our nuclear missile inventory.

• Close 75% of domestic military bases and give the properties back to each state.

• Close all foreign military bases, apologize to each nation, give back the property to the various nations, bring all troops home.

• NASA is gone. If you want to go into space, pay for it yourself.

• Lift all bans on domestic oil exploration.

• Lift all bans on nuclear power plant construction.

• Shrink Supreme Court to three Justices who serve at my pleasure. Who needs nine old duffers arguing amongst themselves? Besides, they have no power to enforce any judicial decision. The power is all mine.

• Give back all Federal property to the states. Let them decide what to do with it.

• Cancel all treaties with other nations. Negotiate new treaties if I think we need them…and if I have time. A King’s gotta sleep, you know.

• Dissolve the Federal Reserve.

• Cancel all Federal gun laws and regulations. Once again, it’s up to the states.

• Get rid of all intelligence agencies except CIA. Rename it the King’s Intelligence Agency. Then figure out what kinds of “intel” we really need if we’re minding our own business. The KIA may become just me and about six other guys, plus a couple secretaries in case we need to write something down or need coffee and a bagel.

• Place Federal money on the gold and silver standard. Only issue gold and silver coins and paper money equal to our national precious metal holdings. Allow the price of gold and silver to be determined by the free market. No Federal price control.

• No subsidies for anything. No price supports for anything.

• Cancel all Federal debt. The Federal Government is bankrupt. If debtors want to get paid, tell them to take it up with the guys I just fired. We pay our bills out of income, not borrowing from the world.

• We will trade with everybody around the world who wants to trade with us, and stop meddling in their affairs.

• By the way, Federal income will come from tariffs and a 10% national sales tax. If God can get by on 10% so can the King.

• Dissolve the FDIC. If you put your money in a bank, you assume all the risk for what happens to it. Don’t pick bad banks. End of discussion.

• Dissolve the DEA. End the “War on Drugs.” Make all recreational drugs legal.

• Give Hawaii back to Hawaiians if they want it.

• Enforce our border with Mexico with shoot-to-kill-on-sight orders.

• Completely stop immigration for one year while we figure out how to do it.

• End all Federal holidays. If you want a holiday, take one on your own.

• Anything else that comes up, I’ll figure it out later.

***********

OK, Americans. Here I am, ready to be your benevolent Monarch. Just tell me what day you want me to move in at the White House.

I’m going to need a throne, though. Are there any really big chairs in the White House? If not, I have leather chair with an ottoman here at home that I can bring with me. A throne could be really expensive.

Is Paula Deen available to be the White House chef? I’m just sayin’…


Honduras Coup d’etat: Was It Right Or Wrong?

July 5, 2009

On Sunday, June 28, 2009, Honduran President Manual Zelaya was awakened from his bed by the sound of gunshots and the yelling of his guards. About 20 minutes later, Army soldiers took Zelaya from the palace to a waiting plane. He was flown against his will to San Jose, Costa Rica, where he now lives in exile.

Honduran officials made the decision to remove this President from office after Zelaya’s efforts to change the Honduran constitution. Zelaya was planning for a nationwide referendum, asking voters to vote to rewrite the constitution to allow him to serve more than one term as president.

The Supreme Court of Honduras recently ruled that the referendum was unconstitutional. Specifically, the Honduran constitution forbids referendums to make constitutional changes within six months of elections. But the court ruling did not deter Zelaya. The Army refused to distribute ballots, which is their customary responsibility before elections.

After the forced exile, the Parliament formally removed Zelaya from the presidency and named congressional leader Roberto Micheletti as acting President until the end of Zelaya’s term in January 2010. Micheletti is a member of the Liberal Party, the same party as Zelaya. Micheletti was an opponent of Zelaya’s plan for the referendum.

Zelaya was a devotee of Venezuelan President Hugo Chavez, and maintained a close relationship with the Marxist ruler. The reasons given by the Honduran Supreme Court, the military and the Parliament for the ouster was that Zelaya had violated the constitution, and that the remaining government took the necessary legal steps to remove Zelaya from office. The government officials also feared that Chavez would have too much influence in the Honduran government through his relationship with Zelaya.

The overthrow did not come as a surprise to American officials. The Obama administration had been working behind the scenes for weeks to try to prevent the removal of the president. Predictably, Obama and Chavez condemned the removal and exile of the president, and are calling for his return to the presidency.

Now, was the coup d’etat right or wrong?

From my vantage point, the removal of this president was not a coup d’etat. According to Wikipedia, a coup d’etat is “is the sudden, unconstitutional deposition of a legitimate government, by a small group of the State Establishment — usually the military — to replace the deposed government with another, either civil or military. A coup d’état succeeds when the usurpers establish their legitimacy if the attacked government fail to thwart them, by allowing their (strategic, tactical, political) consolidation and then receiving the deposed government’s surrender; or the acquiescence of the populace and the non-participant military forces.”

In Honduras, the president violated the constitution. The Supreme Court ruled that his actions violated the constitution. The Parliament agreed, and authorized the military to forcibly remove the president and relocate him to another country. These actions were all done out in the open. American diplomats and officials from the Organization of American States worked with government leaders to prevent the removal.

The legitimate government was not overthrown. It was the legitimate government that removed a lawbreaker from office.

In my opinion, the Honduran branches of government acted within their constitutional authority to bring the Executive branch back into constitutional compliance.

No coup d’etat. Simply the orderly function of a government under its own laws. Honduran leaders showed the world that the rule of law can exist, even in a part of the world where bloody overthrows are commonplace.

What an amazing example to the citizens of the United States!

The United States has had presidents now for over 50 years that have violated the US Constitution hundreds of times. The last two presidents have made it into a parlor game. Hardly a day goes by that a new act of constitutional defiance is not perpetrated by our current president.

If the Legislative and Judicial branches of the US government had one-tenth of the courage and moral conviction of the Honduran government, they would do what the Hondurans did.

It is an embarrassment that a small, poor nation like Honduras proves the rule of law, while the American president…supposedly a Constitutional authority and former constitutional law teacher…ignores our own constitution in a naked power grab. Then, in the face of our constitution and his understanding of the Honduran constitution, he calls for the return of the deposed Zelaya to office.

The Obama position is breath-taking, isn’t it? I’d like to call it hypocrisy, but it really is not. Obama is simply rejecting the rule of law in his own country, and expressing the desire that another country reject their rule of law. Seeing this example of political discipline is likely uncomfortable for him to watch.

Has Barack Obama no shame?


National Universal Health Care: Could It Work In The USA?

June 30, 2009

The United States is the only nation in the industrialized world without a universal health care system. The oldest universal health care system is in Germany, which had its inception in 1883 under Chancellor Otto von Bismarck.

Let’s lay an important ground rule before we begin. Traditional insurance policies cover unexpected but predictable occurrences. For example, an auto policy covers an unexpected collision. But that policy does not cover maintenance costs which are a normal part of owning a vehicle. Health insurance has become maintenance insurance over the years, paying for everything from regular checkups and tooth cleaning to heart transplants. And, with some group insurance copays at $5 to $20, the concept of deductibles is becoming archaic.

So, in considering a single-payer cradle-to-grave government healthcare system, the old concepts of insurance and risk must be put aside. Single-payer healthcare is NOT INSURANCE in the strictest sense. It is a massive Social Security-type program, into which tax revenues flow and from which health care payments flow out to health care providers.

This article does not advocate a single-payer government-run healthcare system. But it does look at what a single-payer system might look like, and reasons why it will not work.

In December 2008 The McKinsey Global Institute issued an exhaustive 122-page report on health care costs in America, entitled “Accounting for the costs of US healthcare: A new look at why Americans spend more.” The best estimate of American healthcare costs is about $2.1 trillion annually.

Here is a summary list of its findings:

1. Administration costs in the US are much higher than in most countries around the world. This partly due to the privatization of some health care, resulting in profits for shareholders.
2. Pharmaceutical costs: Direct-To-Consumer Advertising encourages use of newer, more expensive drugs, a practice only allowed in the USA. Also, pharmaceutical lobbyists were successful in getting Congress to ban collective bargaining for Medicare Part D, resulting in the highest drug prices in the world. Also, the patent system for new drugs allows drug manufacturers to patent and charge more for non-novel medications.
3. The absence of a universal system that prevents risk-pooling, and the selective underwriting done by insurers. This leaves millions uninsured, and the uninsured avoid treatment until problems are more critical and more expensive.
4. Huge fees of specialist physicians for their procedural skills, rather than primary care that emphasizes preventive health care, early diagnosis and disease management.
5. Defensive medicine: Excess costs and duplication of health procedures in order to protect medical providers from malpractice lawsuits. Lawsuits and jury awards themselves don’t cause a large amount of monetary damage, but the tort system creates a culture in which physicians are paranoid and make health care decisions with lawsuits in mind, rather than patient interests first.
6. ICU Care: The costs of care at the end of life are wildly inflated, many times eclipsing the health care costs incurred in an entire lifetime. This is partly due to heroic efforts of lifesaving, pain management, and poor records.
7. Electronic Medical Records (EMR) systems would be of great benefit in managing living wills, advanced care directives and previous treatment records. Without EMRs, doctors regularly order redundant tests and procedures because medical information management is so inefficient.

The McKinsey report doesn’t recommend a universal healthcare single-payer system. It simply tries to provide accurate information to those who will be making policy regarding healthcare in the USA.

Here is what a universal healthcare system might look like. This takes the best characteristics from healthcare systems around the world.

1. Funding through individual taxation for wage earners and self employed persons. Low income persons subsidized. Should tax be based upon age? Should the tax be calculated as a percentage of income, like in the IRS Tax Tables and FICA payments?

2. Medicare, Medicaid, the VA healthcare system and all other Federal healthcare systems would be rolled into the universal system. That would include the healthcare benefits for Federal workers and members of Congress.

3. No individual underwriting. All living persons of US citizenship are covered. Non-citizens with taxable earnings could be taxed and covered.

4. No deductibles. Copay for any doctor visit of $5-$20.

5. Prevention-based health care at the General Practitioner level. Compensation based upon health of the patients. Healthier patients, doctor makes more money.

6. Medical school 100% paid by government in exchange for 10 years service as a Federal employee. This would include additional training in medical specialties. Compensation levels could be set lower since there would be no school debt.

7. FedGov sets minimum standards for care. Insured persons are free to choose their own doctors. Patients can choose specialists without first seeing Primary Care Physician.

8. No insurance company precertifications necessary.

9. System includes mental health, nursing home and hospice care.

10. FedGov sets prices for pharmaceuticals, medical procedures and medical supplies. FedGov sets wages for all medical employees, including administrators, nurses, med techs and doctors.

11. Tort reform. If health care was universal from cradle to grave, torts would be limited since the patient would automatically be eligible for additional medical care required by malpractice, an unintended consequence of treatment or a medical complication. Doctors would still be liable for negligence, but awards would not need to compensate the individual plaintiff/patient for anticipated medical care into the future.

12. Electronic Medical Records, a database of all medical records for each patient, accessible by all medical providers. Would eliminate all duplication. Living wills and advance care directives would be part of every patient file. This has the potential to drastically reduce end-of life invasive care and duplication of procedures.

13. Individual health insurance policies would still be available for those that wanted a higher level of care, and would be excess insurance, like a Personal Umbrella policy.

14. Private medical providers, including doctors and hospitals, would still exist, offering custom care for those willing to pay extra for it.

I know this is a cursory look at universal healthcare. I know I’ve left out important features and benefits. But I’m trying to wrap my mind…and yours…around a concept that I fear is in our immediate future.

The big insurance companies have completely screwed up the health insurance marketplace in the United States. So, if they get left at the dock when this new ship sails, I won’t shed any tears. They get what they deserve.

Now, here is why I don’t think that the system outlined above will work.

1. The Federal Government is broke. They are already running trillion dollar annual deficits. In order to stave off governmental collapse, the Federal Reserve is printing paper money as fast as it can. Eventually, inflation will sink the ship of state. To absorb the healthcare system into the Federal Government which represents about one-seventh of the economy, is a bridge too far.

2. Funding this new healthcare system would require increasing taxes significantly. Insurance premiums would be turned into tax payments. There is presently an IRS business deduction for insurance premiums for corporations. The business lobbyists won’t want to give up this deduction and will fight it.

3. Pharmaceutical companies lobby Congress. They will fight any system that controls drug prices and threatens their profits.

4. Trial Lawyers have a powerful lobby in Congress. They will fight medical malpractice tort reform.

5. Medical providers, the American Medical Association and other medicine-related groups have powerful Congressional lobbyists. They will fight reforms, just like they do now.

6. Insurance companies will be forced out of business if the Federal Government takes over the healthcare system. Insurance companies hold trillions of dollars in US bonds and other municipal securities. They will threaten Congress with the collapse of the bond market if Congress passed a new system that leaves them out. All the insurance companies would have to do to crash the bond market and cause the collapse of the Federal Government is to sell off a small percentage of their bond holdings all at once.

In conclusion, I recommend looking at any Obama Administration proposal for universal healthcare in light of the competing groups in the medical field. Each group must be bought off for their cooperation, and in turn each one will buy off Congress to get what they want. Some things never change.

The single payer healthcare system that emerges from Capitol Hill, the system that will affect the healthcare of each American, should adopt as its logo the duckbilled platypus.

That’s the animal that looks like it was designed by a committee.