Wednesday, August 12, 2009

Obama Care-A Real World Example

On the eve of President Obama’s town hall meeting in Belgrade, I would like to site an example of government run care-in the form of Worker's Compensation Insurance.

In Montana, we have the ability to “choose” our Worker’s Compensation Insurance Provider. When you are a big business, it works out great. Even if a few people get hurt at work and need to rely on the worker’s comp insurance, it’s not that big of a deal because the cost of those workers who are hurt is spread over a much larger number of employees. At the end of the year, the amount of premiums paid in is compared to what the amount of claims paid out and the magic number, or Modification Rate, is determined for your policy. This modification rate follows your company throughout the life of your policy. When the rate is low, so are the premiums. When the rate is high, your policy is canceled and your company must find new coverage, because no one is “supposed” to do business without worker’s compensation insurance.

I own a business in an industry with high numbers of injuries: specialty construction. On top of that, my company is small: 7-12 employees, depending upon the time of year. So if one of my employees is injured, those costs are spread over a much smaller number of people and premiums. If I have a large claim, which any medical claim would naturally be, I am disqualified from my low rate plan and must find a new insurer. When the Modification Rate is high, I must go to the “Insurer of Last Resort”, the Montana State Fund.

And this is what will happen with a public option in Obama Care. If you happen to have any risk factors, your Modification Rate will be higher than those that don’t have those factors. Are you of child bearing age-Mod Rate goes up. Do you have cancer or diabetes in your family-another check mark. Are you over the age where the cost of your health care cannot possibly be “recovered” through future premiums-another check mark.

Some say these are scare tactics; I say this is reality because I live it in the form of Montana State Fund. To deny this is the way it will work is to be an ostrich. Sure, we have a choice, as long as there are no risk factors…which will never happen this side of heaven.


  1. Hello People, I was on a holiday for a month just passing by read this interesting post its great to see that every thing here is getting more lively...thanks a lot for these keep them coming....

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  2. The public option is clearly an option of last resort - and to put the nation on that sort of plan would essentially turn us into a nation of people victimized by government bumbling.

    I've been to the VA. They've had over 100 years to get it right and it's a butcher shop.

    I pay for my own healthcare.

    And I don't want Washington involved.