Ann Barnhardt On Health Care and Health Insurance in America Now (Updated with Full Transcript)

More sense about health insurance in 15 minutes than you've heard from politicians of all parties in the last 15 years.

Barnhardt from the prologue: "I would like to restate for the record how disgusting it is that I am the person apparently who has to be the voice of logic and reason and obvious common sense for a nation of 310 million people....

"Who the hell am I? I am not well educated. I have an undergraduate degree in Animal Husbandry which I consider to be nothing more than a formality. My real education consists first and foremost of real life experience and the responsibilities and performance demanded therein, which is nothing rare, along with an Amazon.com Prime account.

My modest little economics library consists of volumes by Hayek, von Mises, Belloc, Milton Friedman, and Thomas Acquinas.

I'm no scholar. I'm no super genius. I'm above average but half the population is above average so that really isn't saying much.

There should be thousands if not millions of other people saying the things I'm saying. But there aren't. And that is what is so terrifying.

Part 2

"Let's eliminate all competition and go to a zero deductible system, which is the goal of Obama care. If you think that's going to reduce costs then Barack Obama isn't the only person currently smoking crack in this country. The only thing that will accomplish will be to collapse the Federal Government which will in turn collapse the entire economy and the nation. But maybe that's the plan."

See both videos and read more from this remarkable woman at Barnhardt.biz - Commodity Brokerage

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Full Transcript Courtest of Ann Barnhardt

Hello, my name is Ann Barnhardt and I am the person who says the things that everyone else is too terrified to say. 

I’m afraid that time is growing short and so I feel that I am morally obliged to inject logic and common sense into the national discussion on health insurance and the overall healthcare services market.

Before that, I would just like to re-state for the record how utterly disgusting it is that I am the person who has to be the voice of logic, reason and obvious common sense for a nation of 310 million people, and maybe even for the entirety of western Civilization which numbers into the billions of souls.  Who the hell am I? 

I am not well educated.  I have an undergraduate degree in ANIMAL HUSBANDRY which I consider to be nothing more than a formality.  My real education consists first and foremost of real-life experience and the responsibilities and performance demanded therein, along with an Amazon.com Prime membership. 

My modest little economics library includes Freidrich Hayek, Hilaire Belloc, Ludwig von Mises, Milton Friedman and Thomas Aquinas. I’m no scholar.  I’m no super-genius.  I’m above-average, but half of the population is above average, so that really isn’t saying much. There should be thousands if not millions of other people saying the things that I am saying, but there aren’t and that is what is so terrifying. 

Do you want to know what real fear is?  Real fear is not the threat that muslims might come to your house and cut your head off.  Real fear is climbing into bed at night with the full knowledge and understanding that if you don’t speak the simple truth, if you don’t state the obvious . . . NO ONE ELSE WILL.  In a nation of 310 million people.  In a civilization numbering in the billions.  In a world of 6.8 billion souls.  If you don’t say it, Ann, it will go unsaid.  That, ladies and gentlemen, is fear. And it’s not fun.

Enough about that.  Let’s start with the problem of health insurance and the resulting disorder and unnatural price inflation in the healthcare services market.  The primary reason that the cost of healthcare is going through the roof is because the paradigm of insurance itself has been completely corrupted and bastardized.  This corruption and abuse of the concept of insurance, which is nothing more than risk management and risk pooling, is itself what is artificially inflating healthcare costs.  A secondary cause of health care price inflation that bears a quick mention is indeed the out-of-control malpractice litigation culture, personified by that walking human compost heap, John Edwards.  The solution there is simple.  Cap malpractice awards and implement a “loser pays” rule to disincentivize frivilous litigation.  It’s not rocket surgery. 
 
The current conceptual disorder with regards to health insurance is completely untenable and unsustainable, and if not corrected very, very quickly will collapse and destroy the entire economy, at which point no one will get any healthcare at all, so you damn sure better listen up.
 
Health insurance is meant to be a protection against catastrophic costs and expenses.  The operative term here, people, is “catastrophic”.  It is meant to financially protect against such circumstances as being hurt in a terrible car accident or being diagnosed with a terrible disease.  Most people go through their entire lives without ever being badly hurt in an accident or being diagnosed with a terrible disease.  Again, the operative term is “most people”.  Yes, people do get cancer and other diseases and people are involved in accidents.  But most people live their entire lives without either of things happening and die in their natural old age of either a heart attack or a stroke.  Most people.  Do you hear me?  MOST PEOPLE. 
 
Now that we understand this, we can start talking about risk pooling, or insurance.  If MOST PEOPLE never have a catastrophic health care expense in their lifetime, what an insurance company can do is provide a mechanism for pooling that risk.  They can offer a policy whereby a pool of customers pay a SMALL premium in order to protect against the risk of catastrophe.  Since MOST PEOPLE do not experience a catastrophe, the premium revenues collected by the insurance company will be greater than the amount of money the insurance company has to pay out in claims.  That remainder is profit to the insurance company, which is the only incentive there can possibly be for them or anyone else to continue to offer the service of risk pooling. 
 
The reason that the system of health insurance in the U.S. is broken today is because the concept of insurance itself has been bastardized and corrupted such that the expectation of coverage is no longer merely to protect against catastrophic expenses, but to cover absolutely everything.  Simple office visits, sore throat, chest cold, minor cuts requiring stitches, heck even setting a broken bone or arthroscopically working on a torn ligament in a knee.  Yes, that’s right.  You’re hearing me correctly.  We should be paying for all of those types of medical services out of our pockets.  They are not catastrophic, they are unpleasant and inconvenient.  All of us, as a culture, need to man up and understand the difference between the two.  Popping your ACL is not a catastrophe.  Being greased by a drunk driver is a catastrophe.  Being diagnosed with leukemia is a catastrophe.  If we as a culture continue in this decadent refusal to acknowledge the difference between mere inconvenience and catastrophe, we will be FORCED to understand what real catastrophe is after our economy collapses, and no one is able to get any healthcare at all.  Do you understand?
 
You are not entitled to an insurance policy which covers every little thing.  In fact, if it is mandated that insurance cover every little thing, including preventative care, then the entire concept of risk pooling collapses in flames.  The more the insurance company has to cover, the higher the odds that any given individual is going to have a claim.  This would be like demanding auto insurance coverage that would pay out for a car wash if an insect hit your windshield – and not just a $7.00 car wash at the gas station, but a $300 full detail job.  If that were the case, the cost of car insurance would become prohibitively expensive.  But guys, my example of auto insurance paying out for a $300 detail job after having an insect hit your windshield is not an unreasonable analogue to today’s health insurance market.  We have health insurance today that covers acupuncture and cosmetic surgery.  If you force insurance to cover PREVENTATIVE care and purely cosmetic or non-medical procedures, then what you are doing is GUARANTEEING that every single participant in the risk pool can potentially have a claim.  If every person in the pool is guaranteed or even mandated to have a claim, then it is no longer a risk pool.  My God, how can it be that no one understands this?
 
The problem isn’t that insurance isn’t providing enough coverage, the problem is that insurance is now providing too much coverage.  If you really want the paradigm of health insurance to survive, and you want healthcare costs to go down, we need to be moving in the opposite direction.  We need to be setting minimum deductible levels tied to income, and I’m thinking something on the order of 10% of gross income.  If you make $50,000 per year, your deductible would be $5000.  And quit your whining.  That’s $417 per month if and only if you were to max out your deductible.  If you spend NOTHING on health care services in a year, that $5000 is still in your pocket.  You don’t have to spend that money.  Now compare that to what you’re paying for insurance today.  Are you paying more than $417 per month for insurance that you may not use at all?  Heck, what are you paying for cable or satellite service per month?  That money is gone, but you couldn’t live with a deductible equivalent to $417 per month of which you may not have to spend a single cent?  Really?  Really?
 
Raising deductibles would accomplish two very important things.  First, it would lower the cost of the health insurance itself because as deductibles increase, the number of payable claims would proportionately decrease.  Fewer payable claims would mean less risk to the insurance companies, who would therefore be compelled and forced by free market competition to drop their premiums commensurate with the reduced risk profile of the pool.
 
The second, and more important thing that raising deductibles would accomplish would be to force the re-engagement of the health care end consumer, which is us, with the market.  The primary reason that the cost of healthcare is irrationally increasing is because the end consumer has been removed from the market.  The people consuming healthcare today neither know nor care what any of the goods or services they are consuming cost, or the level at which they are being priced – and those are two different things.  The consumer consumes, and then shrugs their shoulders and says to themselves, “Meh.  The insurance will cover it.”  And you wonder why prices are inflating instead of deflating?  There is no competition in the marketplace.  If there is no competition, prices are going to go up, not down.  If the end consumer has zero incentive to compare prices or even inquire as to what the price structure is for the various goods and services they are consuming, by what magical mechanism are prices going to go down?  You tell me.
 
The perfect example of this that we can all relate to is Lasik vision correction.  Even if we have never had Lasik ourselves, we have heard and seen the commercials for it on radio and TV.   When Lasik was first introduced 15 years ago, it cost upwards of $5000 dollars per eye, using first generation technology.  Today, I found several advertisements online for Lasik priced at $299 per eye using technology vastly superior to that which was used 15 years ago.  Why is this?  Why has the price structure for this medical procedure dropped in excess of 90% in 15 years while the technology was simultaneously becoming more sophisticated?  It is very simple.  Most people have to pay for Lasik out of their own pocket – their insurance does not cover it.  Therefore, people are incentivized to shop around and seek out the best combination of low cost and most modern technology, and Lasik providers have been forced by this FREE MARKET COMPETITION to offer the lowest price.  Now understand that if Lasik was widely covered by insuance not only would it still cost $5000 per eye, it would, in all likelihood cost closer to $10,000 per eye today because it would track the cost inflation curve of all other surgical procedures covered by insurance.  If Lasik was covered by insurance, people wouldn’t even ask what it cost and the Lasik providers certainly wouldn’t advertise the cost.  Now imagine what would happen if people were again forced to fully pay for their own routine and elective healthcare.  Imagine what would happen if the power of free market competition was turned loose on office visits, emergency room visits, MRIs, childbirth and prescription medicines.  These services and commodities have become so unnaturally inflated by the improper use of insurance that I think a 90% reduction in the price of some of these services would not be unreasonable.    
 
Now, let’s go in the other direction and make this situation as bad as we possibly can.  Let’s go to a single-payer healthcare system that has a deductible at or near ZERO.  Yeah, let’s eliminate even the competition that currently exists between the health insurance companies, who do haggle to some extent with healthcare service providers.  Let’s eliminate all of that and go to a zero competition, zero deductible system, which is the goal of ObamaCare.  If you think that is going to reduce costs, then apparently Barack Obama isn’t the only person currently smoking crack in this country.  The only thing that will accomplish is to utterly collapse the Federal Government, which will then, by default, collapse the entire economy and the nation.  But then, maybe that’s the plan.  Maybe none of this has anything to do with healthcare at all.  Maybe it is all just a scheme to collapse and overthrow the United States and set up a new Global government of some sort.  Ya think?     
                
Now let me lay out a very simple example of how this might work, and this is admittedly incredibly simplistic and is not meant to be an exhaustive plan.  All I’m trying to do is lay out a very rough template and get you to start thinking about what a path forward might be.  Let’s go back to our example of a $50,000 per year income with a $5000 annual deductible.  What an insurance company might do is offer medical escrow accounts.  If I post my full deductible amount in my escrow account, the insurance company could then offer me a reduced monthly premium because A.) they know that I’m good for my full deductible amount AND B.) because they have the use of my money, which would essentially be an interest payment dynamic.  They could then issue a charge card that I could then use to pay for all of my medical expenses, replenishing my escrow account balance as needed.  This would allow me to easily track all of my medical expenses and would incentivize me to both comparison shop, which drives down prices in and of itself, and NOT over-consume, because I would be spending my own money out of my own escrow account.  If I have to pay for everything myself, in this case up to 10% of my gross income, maybe I’ll think twice about going to the doctor and demanding a 28 day course of antibiotics when all I have is a simple chest cold.  Or, maybe I’ll think twice about snowboarding off the trail or on super-difficult terrain, because if I pop my ACL, I’m going to have to shell out a lot of money to pay for the surgery to fix it.  Yeah.  Funny how that works, huh?
 
Additionally, a person could choose to deposit more money in their medical escrow account than the 10% of gross income required as a deductible.  This excess could conceivably then be used to either voluntarily raise my deductible further, thus reducing my monthly premium even more, OR the overage could be tapped not unlike a home equity line of credit – after all, it’s your money.  OR, this type of account could be used by the relatively young, like me, to save up for the golden years when simple common sense dictates that medical expenses will be more frequent and premiums will be higher than they are in a person’s youth.  So while older people would have reduced incomes after retirement and increased healthcare expenses on average, that reality would be offset by the fact that they would have had more earning years, including all of their peak earning years, to save and build their own healthcare escrow account.  Planning ahead.  Saving for old age.  Personal financial responsibility.  What a concept. 
 
Now you might be asking yourself, what about people who are indigent and can’t afford any insurance at all?  Do we leave them out in the cold?  Absolutely not.  We do what people have done with regards to the poor since time immemorial.  We cover them through voluntary charitable giving, be it religious or secular.  Caring for the sick and the poor is one of the main worldly functions of the Church.  That 10% tithe that God asks for – a lot of that is supposed to go for caring for the sick and the poor.  Here’s the funny thing.  If the free market is allowed to work, and insurance is used properly by those who are not poor in a society, competition will increase thus driving down costs, thus reducing the cost to care for the poor.  In a proper, healthy, free economy, people have larger disposable incomes and thus will be able to be more generous in their tithing and/or secular charitable giving.  So, in review, we would have increased revenues streaming into charities charged with serving the poor (and this is a proven historical empirical fact, by the way) AND the cost of caring for the poor would fall at the same time.  Oh, and let’s not forget that in such a circumstance wherein the economy was healthy and competition controlled costs, people would have more free capital and more incentive to engage in entrepreneurial activities, thus creating jobs, and thus reducing unemployment and medical indigency itself.  I think that could be accurately characterized as a WIN-WIN-WIN situation. 
 
So, in review, the answer to our healthcare problem is less health insurance, not more, and everyone is either too stupid, too chicken or too evil to speak this obvious, obvious truth.  My name is Ann Barnhardt and I don’t want your money, your vote, your praise or anything else, which is why I’m willing to stand here and tell you the truth, and why you would be very wise to listen.
 
God bless you. 

Posted by Vanderleun at June 13, 2011 4:15 PM