No one likes deductibles and premiums going up, but the Blue Cross Blue Shield model is flat out wrong.

Before I get to the stunt BCBS is pulling, let me say that I have defended insurance companies in the past just to be fair; therefore, check out “Why This Health Care Video Is Wrong“- as much of the hype presented in the video debate is doesn’t hold water.

Now, back to BCBS. We (policyholders at work) new changes would be coming September 1, so no big deal. We make adjustments to what we want to include, discontinue or change in our plan once per year and then the changes a happen later.

What happens is the plan will change, but benefits are on a calendar year – January 1 through December 31 – as stated by the specialist for our company’s policy. BTW, the company is a huge customer of BCBS, so many people are affected. The difference this time in deductibles is that BDBC is only honoring the deductibles for nine months – not the whole year.

Here’s how the deductible works for 2010 and 2011, and their practice is outrageous.

The deductible for 2010 for me is $1,000 per person in my plan and will change to $2,000 for the next year. However, I was told by the Blue Cross Blue Shield specialist that BCBS is no longer using the $1,000 deductible and an extra $1,000 is required for the remainder of the year. Okay, I’m not real happy with this, so I asked if the extra $1,000 goes towards the 2011 policy and now we are on a fiscal year. Here’s the kicker…

Effective January 1, all new deductibles go into effect; therefore, a new $2,000 deductible starts again.

Having described the events, here’s what can happen to me.

In August, I had knee surgery which cost me an out of pocket amount of $1,000 cumulative. However, I may still need a follow up surgery that could happen by the end of the year, costing me another $1,000 when it shouldn’t. As a result my, $1,000 surgery would be $2,000 and if I wait until January, then the surgery would cost $3,000. In addition, right now my therapy is no longer under the fully paid deductible and I am out money for the rehab as well, when I shouldn’t be. Worst case, I could be out as much as $4,000 in just a few months depending on what transpires this fall and early next year.

Even if you do not have BCBS, check your company. If so, check it out. They will be hearing more from me and the State may too.

While driving to work yesterday and enjoying the nice spring morning, I was channel surfing the radio and landed on NPR. The topic on the radio had commentaries about health care reform.

One of the key comments made had to do with limiting excess profits. The idea is for companies to make enough profits to pay claims, doctors, etc., but eliminate excess profits.

What a sinking feeling.

No, I’m not talking about reducing my health care cost, which would be nice (but not likely even after reform). In reality, we will pay in some shape, form or fashion for this reform – both monetarily and our in our freedoms – of choice and time for example. Instead, what I’m referring to are things like mutual funds, exchange traded funds, retirement accounts, insurance policies, etc.

That’s right, these excess profits go to shareholders, such as you and me, not just the demonized Wall Street suits we only hear about. Why invest our money if we won’t get a return on our money?

How do insurance companies pay for life insurance for example? The companies use money to make profits to pay the policies. Have you ever looked at a prospectus to see where the money goes and which companies are invested in?

Yes, Obama has made it clear he does not like profits (for everyone else in my opinion). However, he made $5.5 million last year. Obama has mentioned, there is a time for profit, but it is not now. That’s just plain wrong – there is always a time to profit. As well, he has labeled bankers as fat cats, yet has not reduced earmarks for pork projects.

Barney Frank made comments about eliminating profits going to shareholders as well.

The ironic thing about socialism and capitalism is that the Socialist are Capitalist themselves.

The elites, who put their pants on one leg at a time just like the average Joe, are really capitalizing by taking from everyone else. Therefore, capitalism works, socialism doesn’t. And why should one man or a small group of people determine what everyone else makes – or limit individual potential?

To finish, I saw a bumper sticker that read “I’ll keep my guns, money and freedom…You keep the change”. When all of the new changes that have been occurring over the last year and in the years to come, I hope we are not simply left with pocket change.

Cutting through the smoke and mirrors and political talking points, ultimately the health care reform bill will hurt small business and investment which leads to growth. Imagine that!

To summarize, Obamacare will not only affect small businesses with 50 or more employees, it will hurt business right down to a few employees.

First the medium size businesses, 50-199 employees, will have higher taxes. Higher taxes will lead to either eliminating jobs or increasing prices to offset the additional costs.

Everyone pays for taxes, not the business.

And to think health care is free?

Businesses with fewer than 50 employees may drop coverage.

Next, the tax credit for small business doesn’t really do much. For business with few than 25 employees, say down to 10, with low income, many of these employees will qualify for state health care, thus making this part of the bill useless to small business.

Small business will have increased regulation, as if more is needed, thus creating higher costs for small business. These higher costs may be in hiring someone to keep up with the paper work or additional accounting and office cost. Maybe this is the job creation Obama talks about – in addition to federal jobs. (See 600,000 new jobs – get one.)

Finally on just the short list of reason Obama’s radical health care bill is not good has to do with Medicare and investment taxes. Medicare will increase PLUS a new tax on non-payroll investment money, passive income. With Medicare payroll not being indexed for inflation, more taxes.

With small business being at the heart of America as Obama stated, sounds like we need a new heart surgeon to get business going, not simply a JP signing a DOA statement – aka OBAMACARE.

I recently gave presentations to junior high school students as well as did business plans for a competition. One of the unique contestants was a professor of statistics at a local university. To both the students and the professor, I simply said, “Math is in everything.”

To give you an idea of what I meant, consider the following items.

Music has ¼ notes and ½ notes.

Macaroni and cheese takes a ¼ cup of milk.

Brownies, I eat more than ½ of the batch when no one else is looking.

Orange is a percentage of the colors red, green and blue.

Money has ½ dollars and borrowing has ½ of a percent.

Compounded interest has the Rule of 72.

When I talk about compounded interest, I use the example of “would you rather have a penny today doubled everyday for thirty days, or $1,000,000? I usually get a about a 50/50 response. The answer is – take the penny. (I show and explain the penny in my book, Barking With The Big Dogs.)

The Rule of 72 is simple math, and a good way to estimate (especially since elementary schools would rather teach estimating first).

Here’s how I explained it to an eleven year old once.

72 divided by 3 equals what number? He answered 24.

For example, let’s say you have $1,000 earning 3% interest. It would take 24 years for you to double your money. The look on his face was disappointing. He said that’s not worth it. That’s an interesting point. (This also happens to be the example used in the stimulus package post that I wrote about last year.)

Take 72 and divide it by the interest rate you are earning. 72 / 3 = 24. Pretty simple. 9% would double your money in 8 years. 72 / 9 = 8. Remember, this is an estimate. Albert Einstein said this was the greatest mathematical discovery of all time.

Make sure you learn math, because it is in everything.

And if you are not looking, the government – not just business, banks and oil companies – might just take ½ of your brownie as well in the form of taxes and hidden taxes – such as VAT (value added tax). With all of the entitlements, bailouts, government paid trips, health care (not the one the politicians receive), etc. how can taxes not go up in some shape, form or fashion?