Hi I'm Todd Watson, an Independent candidate running for United States Senate.

Our party platform has three key philosophies compared to a traditional campaign agenda. First, we believe that the party system in Washington is broken. Second, we believe in a foundational return to the spiritual heritage of our country. Third, we believe it is time government act selfless and not selfish with the future of this country.

We have great passion to be part of a larger movement under God of real change in this country. Enjoy the site and let’s MOVE! Learn why all individuals who interviewed Todd of the York County GOP leadership committee endorsed Todd Watson for US Senate.

This site is designed to give you the information you need quickly while yet thorough enough to move the dialogue of the debate to “How” from “What”. “Todd’s Stances” has quick positional stances (read the bold if you have no time). Second, we have three Philosophies with quick excerpts to learn more about our beliefs. Finally, we thoroughly blog on any given topic to give those passionate about a subject details they can depend on. The details in these blogs gives you a roadmap to solving problems and details on specific views. You will rarely find disclosure of this level of detail as well as belief structures. Campaigns want to be general to appeal to the most voters. We fundamentally believe in giving specific guidance to move the debate forward and show we are serious about solving problems–not being popular.

Thanks for your support!

The Watson Campaign Team

Rural Healthcare. It is important to a Conservative Like Me.

 

Pete Ricketts, Chuck Hassebrook, Dave Domina, Jim Jenkins and myself sat down with the Rural Healthcare Association to discuss, debate, and solve rural healthcare problems last Thursday.  Hospitals are being squeezed by the ACA and the cutting of Medicaid.

Three ideas I proposed to improve the medical system (we only had a 1 min on this topic)

Short Term – Price Transparency from Hospitals and “Skin in the game” for all patients.  Did you know that 10% of Medicare patients that are responsible for some sort of payment utilize the services 63% less?  Patients need to have personal buy in for every procedure.  Hospitals need to display cost and quality ratings for good consumer choice.

Medium Term – Improve coordination and communication to eliminate double procedures, coordinate wellness between providers, and eliminate waste.  The ACO model in healthcare will incent these activities.  In addition, tort reform will lower costs.

Long Term – We must change our culture and fitness level.  Kearney leads the state (child level) and has reduced obesity/weight issues by 22% in their population in schools since 2006.  Changing our culture will change our health.  We must learn to incorporate healthier choices and more fitness to improve our health.  This will reduce long term health cost.

I was happy to listen to the Nebraska Nurses (only candidate to attend and listen) in Omaha, Nebraska and the hospital administrators in Kearney, etc.  Unfortunately, the Nebraska Medical Association did not want to invite Independents to their forum.  I realize this decision does not reflect every Doctor but it does reflect the leadership of the organization.

Discrimination of Independents continue, but the rising acceptance of other organizations like Rural Health are applauded.  People are changing.  The support since the television debate has been outstanding.  The people’s voice is starting to rise.

I’ve been balanced in my criticism and praise.  I want the Independents and members of all parties with an “Independent Mind” to PAY MORE ATTENTION to the good organizations making progress in politics with free speech.

Support these organizations and let them know you appreciate their non-bias in dealing with people.  Eat beef, start a business, thank a nurse, congratulate a hospital administrator, support the League of Women Voters, visit Hastings, watch NET, etc.  These are the organizations/towns committed to fairness, free speech, and listening to all people.

As a last point, you will notice Jim, Dave and myself posing at the conference.  We all have different approaches to problems but we care about listening to the Nebraska people to construct better policy.  I’m happy to be the conservative in the group but I’m thankful we have developed a working camaraderie this year.  I will seek to be that bridge in Washington that will not compromise philosophical principles but will treat everyone with kindness and respect to move the debate forward.  I’m happy to be the only conservative (as well as Pete Ricketts) taking on all the debates this year.  Debate in instrumental on the floor in D.C. and we are ready for the challenge!  Take some time and watch the NET debate and decide for yourself.  Become confident in standing for what is right!

Posted in Healthcare | By

Swimmer’s Ear – A Real Life Example of the Failure of Two Party Healthcare

My middle son woke up in pain today and my wife took him to the Dr.  The Doctor diagnosed him with Swimmer’s ear.  My wife went to Walgreens and filled the prescription.  The cost of the prescription was $156.95 AFTER THE $50 the insurance covered (see photo on Facebook – watsonforsenate).  I went online and saw the prices of the drugs around the world.   Our bottle (see photo) is 7.5ML.  I logged on to pharmacychecker.com and I can pay $57. 76 for the same drug if I was in Canada (see below).

http://www.pharmacychecker.com/brand/price-comparison/ciprodex+ear+drops/0.3&2520.1+%25/

Bottom line is that “Big-Pharma” were given price protection capabilities for Special Interest Contributions—mainly by Republican representatives in America (75% of estimated donations go to Republicans).  The Republicans always argue R&D (Research and Development) costs are expensive –they are right.  However, I have a solution.  They don’t have to bill Americans for the entire bill.  My point is that every user of the drug around the industrialized world should pay for R&D — not just an American.  The drug lobby is cited by Wikipedia as one of the largest donors of any industry group.  They have donated to Ben Sasse as well in this campaign (opensecrets.com).

http://en.wikipedia.org/wiki/Pharmaceutical_lobby

The CBO estimates we could save $112 billion in Medicare if we reversed just one piece of legislation that gives our government negotiating power back for Medicare.  The Republicans took price negotiation away from the government and let “Big Pharma” set their own prices back in 2003.  Taking price negotiation away from the marketplace is not conservative but it is Republican.

Here is one article that highlights how price negotiating or other changes need to be re-instilled into Medicare.

http://content.healthaffairs.org/content/28/5/w832.full

As I cited in my February blog, the Republicans did not address drugs in their healthcare plan they proposed in February.  This is one of the most powerful lobbies of the Republican Party and I had a hunch they were going to protect their donors.  Shouldn’t any healthcare plan address drugs?

The link below is Ben’s healthcare plan he released in March.  Ben made a nice improvement by not taxing the worker (he didn’t bring it up but it appears not to be in there) as the previous Republican plan did but please notice one topic remains unaddressed…drugs.  This indicator is what scares me most with any Republican candidate.  Are they bought by Special Interest?  I’m seeing contributions still buy influence in this race.  To be fair, Ben attacks healthcare insurance companies (most Republicans historically do not do this but many seem to finally be conceding this ground).  This is a huge step forward to reintroduce competition into the insurance arena.

https://admin.sassefornebraska.com/sites/default/files/u63/The%20Anti-ObamaCare%20Recovery%20Plan.pdf

I want to be fair to Ben and give him a chance to address drug companies.  I Ask Ben, “Will you propose repealing price protection mechanisms in the Medicare and Prescription Drug, Improvement, and Modernization Act of 2003?”  Yes or no.

We can make Medicare more solvent, make less severe cuts to the program, and re-instill $110+ billion in savings for the American people.  This is just the savings in Medicare. Think what Americans would save if we had a competitive marketplace for drugs in all aspects of Healthcare—not just Medicare (like Swimmer’s ear).  Democrats will tax you with government but the Republicans will just make you pay more for your goods in the marketplace.  Pick your poision.  Making the market efficient and competitive is the best solution we have in a fallen world to help people lead better lives.

For what it is worth….maybe we can allow moms to bring their own Tylenol after birth to the room so we don’t pay $5 for one capsule?  I digress……

I’m not against drug companies.  Profit is a good thing.  However, I’m for free markets.  Price protection is not part of a free market.  Spreading out R&D to the users of a particular drug around the industrialized world as opposed to just America makes sense.  If a drug company will sell to Canada for $40 then American buyers should be paying $40 (or whatever the world free market rate is).  Americans deserve to get as good of a deal on the open market as any other country.  Let these drug companies make and seek a profit so they keep innovating.  However, let their profit come equally from users of the product by citizens around the industrialized world.

I’m still not for the Affordable Care Act.  Ask Dave Domina, “How will the government succeed at taking care of American citizens when we have our heroes (a drastically smaller subset) from our wars dying under the watch of government care right now at the VA (to be fair this problem in the VA started materializing under Bush and got worse under Obama).”  We can’t trust a government to take care of its citizens when it can’t even take care of its freedom fighters.

I believe the solution lies in the market that is not represented by either party.  Government run and Multi-National protected healthcare both fail in addressing care and cost.  We need a simultaneous battle against Government run and Multi-National controlled healthcare.  The free market offers large solutions for the healthcare industry.  Carve outs should be reserved for rural health care where competition is not as feasible.  A less competivie rural health care system should still be designed in a way to keep healthcare costs competitive.  Regardless of location, commoditized products (like drugs) should be similar in price regardless of where the product is consumed.

Unfortunately, it appears that the Affordable Care Act will not be overturned.  The Republican Party is moderating around the country as they take positions for the general election in November (including McConnell who wants to give Kentucky the option to keep their exchanges–don’t get me started).  Many states are not as conservative as Nebraska.  I see it highly unlikely these Republicans win their election wihtout moderating their stances in many of these races.  “Talk Tough Primaries” are so misleading to Americans.   The positions for primaries are seldom the positions they take for the general election.  It appears “the will” to overturn the Act is not there in the Republican Party as they moderate for power–not principle.

I’m committed to standing with Republicans (if they have the collective fortitude) to make sure the Affordable Care Act is defunded, minimized, or overturned.  However, I’m quite clear that pre-exisitng conditions (especially born with conditions) have to be covered as the marketplace has no real plausible solution for these situations.  At the same time, I would stand with Democrats if they went after these price protection mechanisms put in place by Republicans as a thank you for campaign donations.  We need both to be eliminated.  My view is overturning both the ACA and special interest healthcare is the best way to improve cost and quality of service for the majority of Americans.

I’m worried that the Republican nominee in Nebraska that has pledged to be a “team player” and will “absolutely” support Senator McConnell as the Republican leader will moderate (and he already has with Senator McConnell) so as not to stand out and move up the ranks in the party.  To be fair “Obamacare” is his main issue and I would guess he has to stay as strong as possible on an issue that defines his campaign.  However, I frankly wish Ben would go back to 2013 Ben who called out Senator McConnell “to show some real leadership” on the healthcare issue as opposed to 2014 Ben who has pledged his support of McConnell and has funded his campaign.  This flip flop of support to the old guard establishment is no way to go.  Ben was right in 2013–it is time to show some real leadership in the GOP.

Back to the Swimmer’s ear, we are fortunate to be able to afford the medicine for David.  This is not the case for many Americans.  As a person who tries to follow the Bible I know oppression of the poor is a big deal for a nation.

Isiah 10:1 strikes fear in me if I were to win this race.  Pray for any elected leader to do their best at observing this verse if elected.  This verse goes through my mind as I look at laws on the books that cause overpriced drugs (needs) for our citizens.

Woe to those who make unjust laws,
to those who issue oppressive decrees,

There are more verses on oppression.  People have rights to their opinions on what oppression and “cause of the poor” is.  I don’t want to come off as having the correct singular interpretation as one who knows God’s actual opinion on a multitude of issues.  However, as a personal interpretation I believe one of the modern day versions of oppression is hiking the prices of needs (medicine being one need) through protectionism of large companies in the marketplace.  There is a distinguishing line of promote (not provide) in the preamble of the Constituion and I believe our founder’s knew this to be the best course of action.  I believe it is my duty to promote the general welfare through competition of the marketplace.  Domesitc price protections hurt our citizens.  Eliminating domestic price protections “promotes the general welfare” and enables the best possible prices for our citizens with needs.  Handouts equate to “provide” and creates long term dependency that creates an unsustainable burden on each American.   We need to avoid this situation for the majority of Americans and seek to cover those that the market is unable to solve in a reasonable manner (Seniors and those with Pre-Existing conditions).

My job is not to provide every need (promote vs. provide the general welfare) but it is to liberate this market to work for the benefit of all citizens (including our very poorest).  I believe this relates to banking, oil companies, food companies, etc.  Free the market, not protect the market, is my cause.  Increase the buyers and suppliers of a given market and remove protectionism of a small set of consumers/providers.  I believe this will cause a robust and efficient marketplace that produces the most ideal outcome for producers AND consumers.

I think of the single working mom with kids.  We are asking her to go to work roughly 11 hours extra (assume her wage is $10/hour) so her kid can get over Swimmer’s ear (we have employment taxes).  What if we can get that cost down to 6 hours instead of 17 hours so she can spend that eleven hours with her son/daughter instead?  If you have 2 children and spend an extra $100 each year for each child on medicines (this is a VERY conservative estimate)– you are asking that parent to work an extra 10 weeks over another mom in another country during the 18 years of life of her kids.  This shouldn’t happen.  We need parents investing in kids not working to pay for over priced medicines on the open market.

Providing for the poor and oppressing the poor are different things.  These drugs have real costs.  The best we can do is free the market to work for better prices for these goods.  Keeping profit motivations in place for companies to innovate new drugs is good.  Profit motivations have improved our standard of living to the greatest heights the world has ever seen.   Let’s just spread those dollars that pay for profit around the world and incent competition to keep innovation and cost efficiency high.  Protecting profit centers for campaign donations is just outright wrong.

Drug patents are at the core of our Constitution and must be protected to keep innovation in place and reward the skilled scientists who innovate.  However, we must debate how long those patents need to be in place.  Generics bring much needed price competition but innovators must be rewarded for improving our healthcare situation.  America needs to have that open debate.  We have to find the middle where profit centers are balanced with standard of living concerns for all citizens.

Let’s compete in the marketplace.  Let’s protect our poorest citizens by giving them a marketplace that promotes the best price options for the products they need.  Let’s destroy these anti-market mechanisms created by legislation.  Let’s quit subsidizing the healthcare of other industrialized nations at the cost of the American citizen.  Expanding market forces is my over-arching philosophy to healthcare.  Government run healthcare is not the answer and Republican Special Interest Protected Healthcare does not “Promote the General Welfare”.  The answer is in the middle.  Come join me!  Support Todd Watson, Independent for US Senate-Nebraska.  Maybe we can solve the next Swimmer’s ear problem for $100 cheaper the next go around.  – Todd

Posted in Healthcare | By

“Pro” Obamacare or “Anti” Obamacare – How About “Pro” New Private System?

I’m an entrepreneur and small business owner.  We solve problems.  Instead of Pro-Obamacare and Anti-Obamacare we need a new healthcare structure laced with new and progressive marketplace ideas.

I met with Dr. Haden who owns two healthcare businesses in Washington D.C. and Scottsdale, Arizona.  He is one of the pioneers in a new system called “Subscription Based Direct Primary Care”.   He is passionate about a direct relationship between patient and doctor and keeping external entities out of the way.  I enjoyed our discussion as he talks pioneering concepts across healthcare.

At Watson for Senate we are interested in offering solutions and solving problems.  Meeting these entrepreneurial doctors is the way to discover new ideas for a better industry.  “For” a bad system or “Against” a bad system does nothing to create a “Solid” system.  Avoid the yelling between these parties—join me in solving the healthcare problem through a neutral marketplace.  Government run healthcare will fail and special interest manipulated healthcare ideas from the industry oppress marketplace progress that will enable healthcare to be more affordable to all American citizens.

We need entrepreneurs in D.C. AND PROFESSIONALS IN HEALTHCARE to solve problems.  My time is best spent meeting with pioneers in healthcare like Dr. Haden to solve problems.  We will continue to be the “Pro Active” conservative candidate who explores problem solving ideas as opposed to always stating what we are against.   We will continue to listen to those in healthcare whose passion is solid medicine for the country.

Vote Todd Watson for United States Senate in Nebraska.  There is a big upside to putting a proven entrepreneur in Washington.  Solving tough problems with market based solutions IS WHAT WE DO!

Posted in Healthcare | By

The Republican Health Care Plan – Solid Reforms But A Tax Hike on Workers

http://www.forbes.com/sites/matthewherper/2014/01/28/the-proposed-republican-replacement-for-obamacare-is-a-big-tax-hike/

Let me start off this column by giving high praise to these 3 Republicans.  I have been very critical of the party due to a lack of a proactive plan.  Trying to repeal legislation 40 times without a plan of your own is downright absurd and is a central complaint of this campaign.  My conservative friends in the party are starting to get the message and get to work with proactive plans in all areas of government.  (You can thank numerous outside groups for continuing to put the pressure on the party to get to work).

A few Senators took a swing.  We applaud “the swing”.  Most Republicans lack the guts to propose a plan.  Let’s be constructive in our criticism as we need more Republicans taking proactive positions (this is refreshing).  Taking a stance creates debate and helps us find a solution.  It would be nice if the party came together and endorsed a plan as opposed to have about 7+ ideas with no consensus and no adopted majority.  However, this is the most credible plan to date and should be given strong consideration by the party.

I will give you my opinion on what I like and dislike with this proposal….

First, they have a plan for pre-existing conditions.  This is one of the biggest elements of a plan that gives access to more Americans.  Limiting the removal of people who are on active insurance plans and creating high risk pools to deal with those with pre-existing chronic conditions (especially ‘born with’ conditions) is smart.  Well done.  A+

Second, giving states control of the Medicaid budget is slick language.  I agree the state will administer Medicaid better.  They will likely create efficiencies in the system over the Federal level.  This part of the bill is smart.

However, this is more about passing the buck to the states with an unfunded mandate by giving a fixed budget per person needing assistance.  This does not solve our expenditure problem and will put the states in the current dilemma of how to pay Doctors appropriate amounts with a fixed federal budget that is not meeting growth rates of expenditures.  Lowering the federal liability by passing it on to the state is no way to ‘solve’ the problem.  I guess if you can’t pass it on to the kids in the platform you find a way to pass it on to the states.  This is dangerous to state and local governments.

I’m sure our current Governor will give another speech about an unfunded mandate and the unfairness to the state (he is right and should bark).  However, before he speaks too aggressively you should talk to our county commissioners and local leaders about the unfunded mandates they are being handed down by the state.  These perpetual unfunded mandates are unsustainable at ALL levels.  Let’s tackle the problems and quit passing the buck.  We must address benefits and costs (herein lies the solution).  C-

Third, small business tax credits for health care.  I personally think this is the place to solve the differences between big business and small business premiums.  Making healthcare cost to the employee a neutral item will help the best ideas in business (not benefit package) obtain the best talent.  However, we should not reduce all benefit differences to big companies—see point 7. B+

Fourth, medical malpractice reform.  I have taken some heat on this issue.  Opponents are sighting lower premiums and lower lawsuit claims (the last 5 years) as a needless area to attack in healthcare.  I stand 100% with Republicans on continuing to engage tort reform despite the “direct” evidence.  Our physicians have had to become experts in risk management as opposed to worrying about what is best for the patient.  We have numerous unnecessary procedures being performed to protect the practitioner from a lawsuit.  The lower claims are due in large part to our physicians becoming better risk managers.  Lowering the frequency of unnecessary procedures to prevent malpractice claims will create huge savings “indirectly”.  We must continue to pursue tort reform as a way to abolish needless healthcare activities.  A+

Fifth, transparency of costs.  We have been harping on this feature for the length of this campaign.  The transparency in this proposal is better but not strong enough.  We should require publishing of all price information.  Digging for this info in the background and excluding certain providers from publishing is not strong enough.  We need full disclosure of all prices in easy to find formats.  Good Doctors should not be afraid of competing with lower priced Doctors.  I value my Doctor and would pay more for his advice than a low priced Doctor (you get what you pay for).  He gives better service and I trust him (an invaluable commodity).  I will pay more for his opinion.  Do not be afraid of price competition Doctors.  This is America, we will pay for a better service.  B-

Sixth, calling out individual responsibility to our health.  A+

The Seventh point is more slick language.  I commend the Republicans for not passing the buck to pay for the plan (if this holds true by independent analysts).  However, they are moving the price tag to the workers and giving the tax breaks back to the device makers and drug companies that were repealed in the last plan (how many times have you heard me talk about paying off the companies that pay for the campaigns).  Voters will pay the tax with Democrats or pay the special interest indirect tax with the Republicans.  It is in black and white for you to see for yourself in this proposal.  Why in the world are the Republicans attacking the worker (at a cost of $1,345 a year)? Why are we going to further hurt workers by now taxing 35% of their health care premiums?

This is the Republican Party.  Take care of those that fund your campaigns (device makers and drug companies—by the way trace this money in this Nebraska Senate campaign from Washington—it is there).  You will pay for the campaign if they are elected.  The device makers and drug companies will be paid back through your payment of excessive healthcare costs.   Keep following that ‘money lead’ in the race if you (and the media) want—just know where it takes your pocketbook after the election.

As a side point–do not burden the worker with more taxes—they are taxed (or fleeced by special interest in laws) enough.  Let’s make sure the private sector worker earns more than the public sector worker (same job class) for 80% of the jobs in government (benefits and pensions included in that scenario).  Next, let’s make sure the public sector earns more than those supported by the welfare state. 

We need to structure the government system to incent private work over public work for 80% of the jobs.  We do need 20% of the government jobs to pay more to attract the best and brightest to be military leaders, intelligence experts, and other mission critical functions.  Finally, incenting any work position over non work position (welfare benefits) makes common sense.  Let’s reduce benefits and payrolls paid by taxpayers through ordinary market forces and encourage Americans to seek jobs in the private sector. 

Moving on, I agree there are discrepancies between Fortune 500 and small business premiums but some of that benefit difference is earned and should remain in the system.  I talked to a few Duncan Aviation employees here in Lincoln and they are incentivized to work hard on their fitness through an employer sponsored plan with an employer paid trainer.  These employees have achieved great health through the program and Duncan should be rewarded for that investment in the health of their employees (some argue they already are benefiting with a healthier more productive labor force).

Creating this tax hike on the worker and removing the tax burdens of the device makers and drug companies to pay for this plan is wrong.  Calling the plan “reducing discrepancies in the tax code” is marketing language at its worst.  More taxes on workers is unwise.  Again, let’s be conservative but not Republican.  Smart conservatives know you don’t pay for more initiatives by taxing those working hard even more.  Taking care of special interest through beneficial laws—horrendous.  D

Finally, you will notice they will not deal with abusive drug prices by our drug companies.  We need to remove Republican special interest legislation that causes our drugs to be double in price than the rest of the industrialized world pays on the open market (see my previous post).  This continues to be an unaddressed area that would lower drug cost in our system.  However, this is an untouchable interest to the GOP party that must be protected to continue the $2.1 billion of lobbying money to the party and their candidates.  You the consumer will pay for their campaigns through higher drug costs.  I cannot look those who need drugs in the eye and force them to pay more for what they need to take care of the companies that fund a campaign and party.  I will not compromise what is right for our citizens for the campaign money.  F

In conclusion, this is a good starting place.  The bill has some powerful measures that are good and some powerful measures that are bad.  This is better than no plan at all and I want to make sure I applaud those brave enough to take a position—thank you for sticking your neck out there!  However, to make this plan better and to embrace “promoting” the general welfare, the Republicans must go against their special interest to improve the cost scenario in the equation.  We cannot afford to continue to take care of special interest at the cost of the American people.  Our country is at an inflection point of need and we cannot play favorites that hurt the common good.  We need independent solutions that care for the common good and promote true free market capitalism for all our healthcare providers.

Furthermore, we must stop passing the buck to the states. How are they going to afford additional Medicaid expenditures?

Finally, I’m amazed that the GOP is going to tax the worker to pay for the plan.

This plan can be made better but at least this is a concrete step to start the discussion.

If elected as your Senator I will expeditiously go to work with Republicans to continue to work on a plan that is more palatable and refined to sell to the American people.  We (conservatives) need a solid plan in place to present to the American people before we attempt to repeal Obamacare.   If I have my say we will be sure not to tax the hard working American on their health plans and we will address the favoritism paid off to special interest at the expense of the pocketbook of the average American worker and consumer of necessary drugs.   In the meantime, we will continue to explore the unfunded mandate piece of this equation to the states to better address the potential liability we are passing onto our local citizens (I need more information at this stage—it is early in the plan proposal process).

Vote Watson for U.S. Senate in Nebraska in 2014.  Fresh Ideas, Better Solutions, No Special Interest.

Posted in Healthcare, Uncategorized | By

Lowering Healthcare Costs Part II: The Medical Loss Ratio – Incenting Higher Rates

http://en.wikipedia.org/wiki/Loss_ratio

When you look at the Medical Loss Ratio policy you really have to question how our current policy leaders think. This provision in Healthcare is one of the most troublesome to me but most popular (due to the false joy of rebate checks).  The ratio is simple—it requires health insurance companies to pay 80% to 85% of their premiums on health related procedures. They have to pay overhead, commissions, and make their profit on 15% to 20% of the premium.  What they don’t spend has to be refunded to customers.  Sounds good on the cover.  We want health insurance companies paying for medical procedures not fat bonuses for executives.  Rebate checks in the mail the first year—beautiful.

Not so fast my friends (my apologies to Lee Corso)!  Let’s look at the backdrop of the problem before the Affordable Care Act and then we will shift our focus to the Medical Loss Ratio to discover why these rebate checks are fooling the American public that they are getting a better deal.

The backdrop to the Medical Loss Ratio law should be understood.  Historically, we have so little competition in our markets.  These insurance companies have to go through plenty of hurdles and red tape just to be able to offer insurance in a certain state (this costs money and is passed on in your premiums).  Health providers work their lobbies hard to set minimum offering levels at the state level for insurance companies to operate under.  It takes a slew of administrators and actuaries to work through the legislation and new requirements.  Big companies can afford these professionals—small companies are at a disadvantage.

Second, setting up networks and negotiating rates takes time.  Large health insurance companies have the networks and resources to overcome the large upfront costs and regulations to exist.  Smaller and new insurance companies have a distinct disadvantage and thus you historically see very few new providers in any given state.  This system needs fixing (primarily through reducing red tape regulation) to invite more competition.  Competition is the key to lower prices.

The Second Problem:  Under this backdrop of few companies with large payouts–the new medical loss ratio is created.  The medical loss ratio may be the most dangerous and short sided law that is going to and has already started created doom in health insurance rates.  Most everyone has woken up to the fact that the Affordable Care Act is not affordable with the medical loss ratio being part of the problem.  The problem is only going to get worse.

New and small insurance providers can’t take the risk to enter the market on 15% to 20% margin (especially when sales people have to be paid out of that 15% to 20% to sell the new plan).  This game is set up for the big companies to continue to thrive.  This monopoly of providers is dangerous to medical providers as well as subscribers.  This rule poises the market for massive premium and provider service rate increases.

If you are in the business of making money and you can only make $1 dollar on $5 dollars charged–what incentive do you have to control costs?  You don’t.  Would you rather charge $5 and make $1 or charge $10 and make $2?  Providers want $10 to be charged so they can make $2.

I was talking with my good friend who is a Chiropractor here in Lincoln.  He told me how the insurance company has already asked him to raise his price.  They believe his rates are too low.  They told him they would like to show their company is offering a bigger benefit in savings to their consumers by having their insurance show a bigger discrepancy in the price to payout.  This is partially true but it should be noted they want a bigger rate as well to increase their premiums to increase profits.  These insurance companies have no stake in the game to keep prices lower (especially when everyone is forced to buy it).   We have insurance companies putting the pressure on to make prices rise (when prices are already astronomically high) so they can make more money.  We need more insurance companies in the market who are free to operate to work at putting together packages that keep the price down while yet insuring a healthy profit (not an evil word).  Better yet, we need consumers making this choice on the smaller items without insurance and leaving insurance for the bigger items only (part of what is happening with astronomical deductibles).  In fact, we should empower individuals to negotiate their own cash price and allow that negotiated price to be applied to their deductibles.

For those who like examples, I can speak to buying a brace for my back.  The parts provider specifically asked if I was paying cash or using insurance.  The price is triple under insurance then cash as the game is set up for them to flourish under insurance.  This higher rate stimulation hurts our system.  We have put this incentive into play with the medical loss ratio and it hurts consumers.

Controlling costs is the biggest problem with today’s insurance companies (topic for another time).     The marketplace and healthcare policy has to be setup to the point where cost control is an important element to profitability for insurance companies.    Limited options in hospitals and insurance companies is a problem to achieving this goal.  We need to debate how to make markets work where emergency and hospital services are limited.  There is wisdom outside of this paper on the debate but that is for another place and time.  However, these debates should be listened too.

I believe capitalism works in lowering prices.  We need more competition in healthcare.  We need more insurance companies competing for your dollar to keep costs down.  We need to create a streamlined marketplace in insurance to encourage more entities to enter the market.   Excessive regulation hurts competition in the marketplace and the medical loss ratio incents poor price negotiating behavior by the industry.  These two punches are hurting the market and the Affordable Care Act is the knock-out blow.

The Affordable Care Act needs to be repealed.  Democrats need to understand this country does not want to be socialist and needs to start changing their ideological approach.  However, the Republicans better get off their duff and get serious about working the capitalistic system.  We discussed the problem of Republicans taking drug company money (3 to 1 to the Democrats) to the destruction of the Medicare system—(see first blog on Lowering Healthcare costs where our country pays double than any other developed country for the same drug).  Taking negotiation rights of buyers of drugs (the government in the case of Medicare) is about as socialist as you get and that was a Republican controlled Congressional bill.  They better get out of the special interest pockets and fight for a system that doesn’t play favorites.   Our people cannot afford either of these two non-free market systems anymore.  Capitalism works but don’t look at historical Republicans to find them working that system.   Being paid off with lobby money to work for an industry should not be part of capitalism either.

The system needs an overhaul.  We need to bring back a marketplace to the system and discuss the appropriate way to solve the health care crisis for those with preexisting conditions (probably through the old Medicaid system).

Let’s craft commonsense solutions that work!

This blog is not meant to solve the whole healthcare system in one paper.   However, it is one backward policy we thought we would highlight to show we are serious in attacking the healthcare problem.

Tort reform and published prices will have to be discussed another day.  However, this is just one more example of how Todd Watson for U.S. Senate in Nebraska is serious about attacking the problem of healthcare costs.  Proposals and solutions not tag lines.  We are here to discuss, debate, lead, and solve problems.  We are not here to pitch popular emotional taglines without details to be elected.

Please change your voting behavior as well.  Think Independent.  Be a problem solver!  We need your support to attack problems not be a part of the problem.  All the best Nebraska!

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