After reading and listening to all of the volatile responses inthe media — both pros and cons — I have reached the conclusion thatthere will probably won't be health-care legislation in 2009, 2010,or any other year in the coming decade. Presidents since Rooseveltand Truman have tried to succeed with some sort of health-carelegislation, and all have failed. Therefore, I suspect that, by thetime this is published, Barack Obama will also have failed.

First, let me correct some errors in the first two sections ofthis series. The day after Senator Ted Kennedy's funeral, PBS'sBill Moyers ran a special Now program about health insurance thatwas very enlightening, as well as disturbing. Much of what was saidby the producers in the program was what this column concluded inthe first two sessions. However, it also noted some errors I hadmade. France does not have socialized medicine. It is a privatesystem with private insurance, but coverage is universal. In theU.K., only about 40 percent of the physicians are directly employedby the government. The rest are private, but they are paid by thegovernment for whatever treatment they provide to their patients.Furthermore, in the U.K. the government runs the pharmaceuticalcompanies, a fact I did not know.

For months, I received daily e-mails from “hot under thecollar,” politically motivated friends berating “Obamacare,”socialized medicine, death panels, and similar aspects of the“legislative bill” when, at that time, there was no bill. It wasall nonsense apparently stirred up by certain radio and cable mediacommentators.

Not one to shy from a debate, I (without taking sides) tried towrite a response that both explained why the current situation wasso expensive, and, ultimately, why enacting a realistic medicalinsurance plan would be nearly impossible. It was a textbook typeof response, but it compelled me to conclude that a bill would notpass this year. Any such bill would also seem unlikely to pass in asubsequent year. The current major problem is that medical care inthe U.S. is far too expensive. As many as 40 percent of our nationcannot afford or obtain health insurance. However, the problems arefar deeper than that.

Big Business and Lobbyists

America's health-care system is a corporate system. Physiciansare forced to operate not as individual professionals but as smallbusiness corporations, employing more administrative personnel thanmedical personnel. Major corporations are involved at every level,and that is what makes American health care different from that ofCanada, the U.K., or other nations with a universal health-careplan.

In looking at my own second-quarter 401K fund reports, I findthat my own financial future largely depends on the funds'investments in biotechnology, hospitals, health-care providers andservices, pharmaceuticals, health-care technology, health-careequipment manufacturers, and health insurers and brokers. All ofthose industries — hundreds of U.S. corporations employing millionsof people, including hospitals, MRI and CAT facilities, evenmedical office building owners — have a vested interest in keepingthings the same. No wonder their lobbyists are busy in Washington.President Obama has already given up his campaign promise to seek awholesale deal with the pharmaceutical industry.

As the Now program pointed out, health-care corporations own thehospitals and other facilities. They are building new ones all thetime, or adding to those already in operation. They may visit andwine and dine physicians and surgeons, encouraging them to putpatients in those hospitals and to use those expensive medicaldevices, such as MRI machines to boost both the physician's incomeand their own. If health care was rationalized — not rationed, butrather used with common sense — then those hospital rooms would beempty. The surgery suites would be less busy, expensive imagingequipment would sit unused, and stock prices for all thosebusinesses would dramatically fall. Our mutual funds and 401Kswould suffer as a result. Congress knows this; the lobbyists havetold them so.

I don't go to the doctor's office often, maybe once a year if Ican get away with just the annual physical. However, I have noticedtwo things at my primary care physician's (PCP) office. One is thatthere are constantly beautiful young women coming and going withsample cases and promotional literature for the physician. “Oh, goright on in,” the receptionist tells them. Meanwhile, I sit andwait.

The second thing I've noticed is that when the physician is“concerned” about some minor thing he has noticed, he schedules mefor some expensive procedure, such as a stress test or echocardiogram. Some other medical contractor (not my PCP) actuallycomes to the physician's office to perform the test, whichinvariably is “negative.” It's a system, and it is expensive. Isuppose that I am kept healthy as a result. A friend recently toldmy wife that her surgeon was recommending surgery of some sort. Mywife suggested that she ask the surgeon where he was going on hisvacation. He was going to a very expensive resort in Europe. Thefriend got a second opinion, learning that she did not need anysurgery. Patients are nothing but big wallets to be opened by thesystem.

Why the Plan Won't Work

Let's consider what the Democrats or Obama plan has suggested:First, insurers cannot reject applicants on the basis of sex, age,or pre-existing conditions. There would be no restrictions on beinginsured for all of the costs associated with a condition youalready have, such as terminal cancer, diabetes, or cloggedarteries.

Second, insurance cannot be cancelled except for non-payment ofthe premiums. If you lose your job and your employer had beenproviding group coverage, then you could continue that coverage,provided that you are able to pay for it. In addition, if you can'tafford the coverage, then the government may create an insurancecompany that will compete with the existing health insurers.

Congress is full of lawyers, most of whom have never worked inthe insurance industry (nor has our President). Apparently they areunaware — unless a lobbyist tells them so — that insurance simplydoes not work that way. What this plan does, in effect, is make arule that insurers can no longer underwrite their coverage. Ifyou're breathing, then you could obtain coverage.

Insurance underwriting requires careful analysis of theinsurance applicant. If a company agrees to write women aged 18 to35 at the same premium rate as men 18 to 35, then the men are goingto have to pay a much higher price than the women, because it isnot the men who are going to be having the babies. Well, perhapsthere is some justice in that as it is the men who help make thebabies!

Group insurance, to a large extent, is not “underwritten” on thesame basis as private insurance. New employees rarely need to fillout applications for coverage in an employer's group plan. Underthe Fair Employment Act or EEOC, an employer cannot inquire aboutan applicant's health, only whether the applicant would bephysically able to do the job. The Americans with Disability Act(ADA) requires employers to make “reasonable accommodations” fordisabled employees.

But employers aren't stupid. When an applicant interviews for ajob, do we realistically think that the human resources directorisn't going to ponder the impact that the applicant might have onthe employer's group health insurance premiums? If the applicantweighs 350 pounds and arrives huffing and puffing and smelling ofcigarette smoke, then how will that applicant's chances foremployment stack up against that of a healthy-looking individual?There is a “waiting period” in the group insurance for“pre-existing conditions” under the current system. That wouldapparently be eliminated in the plans being discussed inCongress.

Elimination of Caps

A third aspect of the plans being discussed in Congress is theelimination of “caps” on health insurance. It's also possible thatschedules of the coverage amounts for certain procedures would belimited. Again, anyone in the insurance industry is going toseriously question Congress' judgment if that passes. That would bethe same as selling automobile liability insurance without anylimits of liability, regardless of the risk. Are you a bad driverwith a history of multiple accidents, traffic tickets, and drunkdriving? No problem! You can have millions of dollars in limits ofliability. What is that going to do to the cost of insurance?

As discussed back in October, costs get out-of-hand when acatastrophe occurs, such as an infant born with birth defects whowill require highly expensive care for many years. If anythinguseful is to come out of Congress this session, then it should besome form of catastrophic care fund, perhaps paid into by insurancecompanies similar to how they now contribute to state insolvencyfunds. If surgery goes bad and Uncle Max ends up a quadriplegic,then a fund would be a better solution than a system of malpracticelitigation.

Rather than placing caps on coverage, the insurance industryneeds to create and market reasonably priced levels of excessmedical insurance for catastrophic situations. I have a closefriend who is battling leukemia. Her chemotherapy, radiation,stem-cell implants from a donor, rehabilitation, and nursing careare not cheap. She's not a young person (but not old either) and isthus not on Medicare. What will happen when she reaches thetreatment “cap”? Is it any wonder that medical and hospital billsare the major reason for personal bankruptcies? The system is sick,but removing the caps or schedules placed by insurance is not arealistic answer.

If Congress wants to create its own competing insurance plan,then market it to the uninsurable, or market excess coverage wheresuch insurance is needed. It could replace Medicaid under a“mandatory insurance” law, which, as stated in last month's column,doesn't really help much, as there are not enough PCPs. Those withlimited coverage still go to the emergency room.

Health Insurance and the Duck

There is far more to health insurance than medical andhospitalization insurance. What about prescription coverage, dentalinsurance, coverage for optical service, disability insurance(which is what that AFLAC duck is quacking about), and all therelated medical items from Botox to massage that is outside therealm of health insurance? What about coverage for alternativemedicine and herbal medications that millions of Americans believeis better than expensive, doctor-prescribed pharmaceuticals? IsCongress considering the 60 percent factor — that is, 60 percent ofhealth problems are psychosomatic, and 60 percent of the cure isalso mental attitude? This is where alternative medicine oftenproves beneficial, be it acupuncture, chiropractic, or aromatherapy. Now we've even been told that early cancer screening maybe a waste, as inaccurate testing leads to the biopsies and othertests that prove that there was no real problem at all. Further, noone in Congress has mentioned injuries and illnesses that areoccupational in origin. Universal care would include bothoccupational and non-occupational diseases and injuries. That's notgoing to happen. The states still control most of the workers'compensation rules and benefits, other than for employees subjectto various federal compensation legislation.

Add to that dilemma the issue of federal versus stateregulation. Currently, except for employee benefit insurance thatis subject to ERISA, health insurance is state-regulated andsubject to litigation in state courts. If Congress passes federalhealth insurance legislation, then will it also pass federalregulation of the health insurance industry? As adjusters, thatmight be a very important issue for us to consider. Is the U.S. a“one-size-fits-all” nation like the U.K.?

I hope I'm wrong and Congress will actually come up with someplan that suits everyone, saves us big bucks, and doesn't ruin ourstock portfolios. But I'm doubtful. This is not a right-wing orleft-wing, liberal or conservative, Republican or Democratic issue.Rather, it is truly a national issue. The U.S. Constitution,Article One, Section 8, says “The Congress shall have power to layand collect taxes, duties, imposts and excises, to pay the debtsand provide for the common defense and general welfare of theUnited States….” Congress has a tough job ahead. I doubt it has thewill to do it, but our general welfare is at stake.