I Dream of Jeannie

As a young, red-blooded American male, “I Dream of Jeannie” was one of my favorite sitcoms of the 1960’S. It had everything a young man wanted in a TV show: Astronauts, beautiful girls in suggestive costumes, outrageous situational comedy – everything but exposed navels.

As stupid of a show as it was (yes, I can now realize how vapid that show was) it did once throw in some heavy duty philosophy that has stuck with me to this day. I cannot find the clip on line, so forgive me if I paraphrase: Tony Nelson asked Jeannie why she didn’t use her magical powers to end bad things like war, world hunger, etc. The normally bubbly Jeannie got all serious and responded by saying something like “because sometimes when you bring water to a desert you drain an ocean”.

Okay – Jean-Paul Sartre she wasn’t, but it was a very deep statement to the 7 year old me. As I said, to this day, I use that statement as an illustration how sometimes very good intentions have an opposite effect to what we were hoping for.

The reason why I bring this up is that we have seen this very principle happen in the health insurance industry, and I am fearful that we will soon see it happen again.

The first time a good intention turned around and bite us in the ass was when Obamacare was beginning to be enacted. The heakth insurance industry realized that the end was near for their financially lucrative group health policy business. However, instead of repenting and mending their ways, they instead cut domestic staff, outsourced other operations overseas, and skyrocketed premiums by as much as 40%. I guess that when the end of the world is near, some of us will go to church and some of us will go to Plato’s Retreat. The Health Insurance industry figured that they will squeeze every drop they could out of the lemon and make hay while the sun was still shining. While many people are ignorant of the fact, this last minute gouging by the health insurance industry has contributed mightily to our current economic woes. The health insurance industry has acted like an alcoholic at last call – instead of quietly finishing their drink and going home, they order 3 shots and down them in rapid succession.

While I was initially thrilled by the new ruling that health insurance carriers must pay out at least 80% of premiums collected on medical care, I am troubled by the lack of reaction from the health insurance industry. Either they have been humbled by the new ruling and will now start behaving more like responsible businesses OR they have something up their sleeves……my money is on the second scenario.

It now occurs to me that this recent ruling may lead to unbridled inflation in the cost of health care coupled with runaway spending. The reason is simple. If they can only keep 20% of your health insurance premium, the only way for them to make more money is to enable you to spend more money on health care. In simple terms, your health insurance carrier can keep $200 a month if your monthly premium is $1,000.00 or $400 if your premium is $2,000.00. It now behooves them to encourage spending even more money on medical benefits. It’s simple actuarial economics – something that they are quite adept at.

So what may be in store for us? How about more unnecessary testing, more overpriced prescription drugs, and more inflated fees?

Health insurance carriers once pretended to help control the cost of health care. I think that those days are now gone.

I can only hope that there will be some guidelines associated with the new ruling that will put a cap on what health insurance carriers spend on medical benefits – perhaps tying fees to a percentage of Medicare or 2010 levels. In other words, if they paid $1,000 for an MRI in 2010 they should not be allowed to pay $6,000 for the same procedure in 2011. Any increase to fees must be based on what they paid for the procedures in 2010 plus an adjustment for inflation. While I realize that this will put even more government control on health care – something that many of us are not in favor of – but it will keep our health insurance carriers from going on a spending binge when they hear ‘last call’.




Once again, you heard it here first.



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