Thinking About the Cost of Health Care

One of the most maddening things about life in these United States is the way we provide and charge for health care. The cost of medicines and medical procedures is enormous, how they are calculated is completely opaque, and the cost of even the most basic health insurance is beyond the reach of many lower-income Americans, particularly as Congressional Republicans move to gut the Affordable Care Act and Medicaid programs which helps make care halfway affordable.

I got to thinking about this topic once again during the run-up to and post-mortems of the passage of Der Furor's "One Big Beautiful Bill," which pays part of its tax giveaways to the wealthy and big business by imposing new limits on Medicaid in the name of "preventing fraud, waste, and abuse." Depending on how you crunch the numbers, as many as 11 million Americans could lose what little health insurance they already have (but not, of course, until after the midterms and the 2028 general election, at which time the GOP will be able to pin the blame on the Democrats who will be in office trying to clean up the mess).

Now, I'm not on Medicaid, but I am covered by Medicare and Tricare (for military retirees) and I have a good Medicare Advantage plan (Medicare Part C), so at least for the moment, I'm more or less protected from the current mess ... but I'm sure it's coming. Here's a personal example of how I'm thinking about it.

Last month I had surgery to replace my right knee. The total cost of the surgery*, including six in-home visits by a physical therapist, was $28,233.00. My total "co-pays" came to $250.00.

Not bad, eh? But riddle me this, Batman: who paid the remaining $27,983.00?

The answer, of course, is that you and I did, through the taxes we paid that fund Social Security and Medicare, plus the health insurance premiums we pay for our private coverage. 

Could I have afforded to pay $28,233.00 out of pocket for my knee surgery? Hardly. But I'm very fortunate to have good health insurance. Many other, less fortunate, Americans would have been ruined by such a bill ... and are, every day.

Another way in which I am fortunate is that, as a military retiree, I am able to get my prescription medications at no cost from military pharmacies. At the moment, I am taking five different, relatively common medications for various ailments. It's all but impossible to calculate how much I would have to pay for these "on the outside," as the cost depends upon type of insurance, the pharmacy used, whether coupons are available, whether the brand-name or generic version is dispensed, the phase of the moon, or whether the manufacturer offers some type of discount for certain patients. As best I can estimate (thank you, Google), the cash cost for a three-month supply of my five meds - were I to have to pay it myself - is about $800, or $3,200 per year. If I needed more exotic medications for other conditions, the cash cost could easily run into the tens of thousands of dollars. 

This, if I may comment, is obscene.

It doesn't have to be this way, but it's the way we've allowed it to develop. Medicine has become a commercial commodity in modern America, subject to economic pressures of profit and loss rather than the Hippocratic Oath. Instead of the admonition to "first, do no harm," it is now "first, make a profit."

My personal opinion is that a single-payer national insurance system, augmented by private insurance as desired, would be preferable to the mess we have now. I understand that there are arguments for and against such a system, but the most common one - I don't want faceless government bureaucrats making decisions about my health care, doesn't make a great deal of sense when you consider that under the current system, faceless insurance company bureaucrats actually are making decisions about your health care.

And so are the Republicans who voted for the "Big Beautiful Bill."

Have a good day. Stay healthy - you can't afford not to. More thoughts coming.

Bilbo

*Source: Historical summary of claims provided by my healthcare provider.

Greed, Inflation, and the Personalized Cost of Living

I will admit up front, as I often have in the past, that you could put everything I know about economics into your navel and still have room for a herd of elephants and a brass band. But the more I think about the subject, the more I have come to believe that much of it is a scam based on human behavioral psychology. A good specific example of this is the concept of inflation, which the International Monetary Fund defines this way:

"Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year."

Economists tell us that inflation is a feature, rather than a bug - a constant force to be managed by professionals who adjust interest rates, tinker with the money supply, apply or adjust tariffs, etc. I, however, expert economist that I am, think that there's a much more simple reason for inflation: greed.

I've thought about this a lot lately, most recently when I saw this amazing article by Irina Ivanova in Fortune magazine: Delta Moves Toward Eliminating Set Prices in Favor of AI That Determines How Much You Personally Will Pay for a Ticket. Yes, Dear Readers, if you fly on a Delta flight, the price you pay will be calculated by an AI algorithm that determines the maximum amount it expects you can afford. Or, to paraphrase an often-attributed quote: plucking the maximum number of feathers from the goose with the smallest amount of hissing. This is not inflation. This is raw, unashamed greed.

Much of what we automatically blame on "inflation" is nothing more than greed, couched in the lofty language of economic laws and forces like "supply and demand" or "charging what the market will bear." It's why you can't afford to buy a house, why your weekly food budget is gone by Wednesday, and why you can pay for decades and your student loan balance is still in five figures. It's greed, and we accept it because it's easy to shrug and blame "inflation" for which there is no justification*.

Greed. It's the only law of economics you need to know.

Have as good a day as those who make the economic law will let you afford. More thoughts coming.

Bilbo

* I can see the price of something going up if there's a rational explanation for it ... for instance, if a particular mineral needed to build a widget is now harder to mine because the easily accessible deposits are exhausted, the cost of extraction may be greater. I can get that. But if the underlying costs don't change, greed is the only rationale for raising prices.

Inconvenience Fees

Last weekend we had lunch with our granddaughter at a local Italian restaurant. When the bill arrived, I noticed that a convenience fee had been added to the total because I was paying with a credit card. This is a pretty common thing now, as restaurants try to recoup the amount they must pay to the services that process the credit card charges. It's annoying, but I figure that some portion of those fees the restaurants pay eventually comes back to me in the monthly cash-back benefits I enjoy.

But the larger issue is that every business has now decided that convenience fees are a nice revenue stream, to the point that they've become inconvenience fees for those of us forced to pay them ... and if you thought the Consumer Finance Protection Bureau* was going to help out with them, well, forget it ... President Musk has decided that protecting consumers is a waste of money and has shut it down.  

You may recall that I established my own schedule of fees a few years ago, and last updated it in December of 2023. It looks like it's time to update it yet again, especially now that President Musk and PINO** Der Furor are likely to get rid of the Social Security and Medicare on which I largely depend for my continued existence ...  

Bilbo's Updated Fee Schedule

(effective March 10, 2025)

General Guidelines: All fees are payable in advance and on the spot either in cash, by certified check, or direct bank-to-bank transfer. No personal checks, credit cards, IOUs, foreign currency (except Euros), or cryptocurrency accepted. No refunds. An additional Nuisance Charge of $15 is also assessed for each request for further explanation of any of the listed charges.

Part 1: General Fees

General Annoyance Mitigation Surcharge (GAMS) - a one-time charge of $100 to partially compensate me for the waste of my valuable time. Note: this base fee is always applied in addition to any other applicable fees and surcharges.

Stupidity Exposure Mitigation Surcharge (SEMS) - a one-time charge of $250 per annoying robocall or home visit, intended to help cover the cost of aspirin and blood pressure medication. Note: this fee is applied in addition to any other applicable fees and surcharges.

Concentration Interruption Fee (CIF) - a flat fee of $25 for each unsolicited telephone call or visit by a door-to-door solicitor which interrupts what I am doing. This is derived from the "billable hour" fee concept used by lawyers, according to which an interruption may only actually involve a minute or two of work, but is charged the full hourly rate because it interrupts the flow of their attention and allegedly requires the rest of the full hour for them to get back on track. This fee is applied in addition to any other applicable fees and surcharges.

Bullshit Filtration Surcharge (BFS) - a flat fee of $75 for every political advertisement which airs during a television show or online presentation for which I am paying (through cable or other access fees). Considering the obscene amount of money spent by political campaigns, they can afford it.

Note 1: this surcharge is applied to each individual advertisement ... that is, if two political ads air back-to-back, each is subject to the BFS.  

 

Note 2: the BFS is applied in addition to the SEMS, GAMS, and CIF (see above), and is tripled for advertisements inserted in the middle of a video I was watching.

 

Note 3: the BFS also applies to advertisements for Medicare supplement insurance plans which proliferate each year in November and December. The BFS is doubled for the same ad repeated back-to-back. 

Wasted Appointment Time Recovery Assessment (WATRA) - a fee charged for time spent waiting to be seen after the scheduled starting time of an appointment. Calculated as 20% of the original appointment fee for each 5 minutes past the scheduled appointment time.

Self-Checkout Effort Recovery Fee (SCERF) - 25% of my total bill charged to any store each time I am required to use the self-checkout. If I'm doing the store's work for them, why shouldn't I get paid for it?

Part 2: Religion-Related Fees

Religious Proselytization Fee (RPF) - a flat fee of $75 to compensate for the annoyance of having to get rid of door-to-door religious missionaries. The CIF also applies, as do the following additional charges, as appropriate:

Eternal Damnation Invocation Surcharge (EDIS) - an additional charge of $100 applies if the proselytizer tells me that I will burn in hell if I don't allow myself to be "saved." 

Religious Contribution Solicitation Tax (RCST) - an additional charge of $500 applies if the proselytizer solicits cash donations. The charge is increased to $1000 if the proselytizer represents a megachurch whose leader lives in a mansion and has his/her own television station, fleet of luxury cars, and private jet. The BFS also applies.

Alternative Worship System Denial Fee (AWSDF) - an additional charge of $100 applies if the proselytizer insists on the sole dominance of his/her own faith and demeans or denies the worthiness of any other faith. 

Part 3: Political Fees

Political Party Representative Annoyance Compensation Fee (PPRACF) - a flat fee of $100 charged to any representative of a candidate for office, in addition to the CIF, SEMS, and GAMS. If the candidate himself or herself appears, the fee can be reduced to $50 at my discretion as an incentive for being willing to meet one-on-one with the common folk. The BFS may also be added if the individual invokes debunked conspiracy theories, proven falsehoods, election denial, or Der Furor by name. The following subsidiary charges may also apply:

Election Denial Tax (EDT) - a fee of $500 for refusal to accept the validity of any election the candidate refuses to concede losing. This fee is doubled if the candidate claims in advance that an upcoming election is rigged if he or she loses.

Conspiracy Theory Embrace Fee (CTEF) - a charge of $500 for each invocation of Q-Anon or any conspiracy theory as a substitute for fact-based argument. 

Der Furor Annoyance Abatement Fee (DFAAF) - a charge of $250 for each mention of the Orange Airhorn's name, regardless of context. 

Opponent Castigation Surcharge (OCS) - a charge of $150 for the first instance of blaming the candidate's opponent for something without evidence, or without offering a detailed plan to address the issue. The fee increases to $200 for the second and each subsequent instance.

Political Contribution Solicitation Tax (PCST) - similar to the RCST applied above under the Religious Proselytization Fee. A charge of $1,000 is applied for the gall of requesting campaign contributions from ordinary citizens who are having their own troubles making ends meet, usually as a result of the action (or inaction) of the politician in question. 

Inappropriate Millinery Choice Assessment (IMCA) - a charge of $500 for showing up at my door wearing a stupid red MAGA hat. An additional $50 will be charged for each other number or slogan embroidered on the hat.

This is a partial list, subject to change and update without notice. All charges are cumulative. Get off my lawn.

Have a good, uninterrupted day. More thoughts coming.

Bilbo

* Don't bother clicking on the link ... it's a 404: Page Not Found. President Musk works fast.

** President in Name Only.