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A Voice In The Wilderness

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It was with great sadness that I noted the passing of Robert Myers at age 97. As a young actuary in 1934, he was asked by President Roosevelt to design a social security system for the U.S. that would provide retirement benefits for its senior citizens. It was Bob Myers who picked 65 as the appropriate retirement date for that period. Age 70, the retirement date set in Germany, seemed too high and age 60 was deemed to be too low. After its enactment he served as chief actuary from 1947 to 1970. In 1970 he quit the post in protest over the way politicians were forever expanding the program into unsound financial waters.

In the 1980s, when his prediction of severe problems began to come true, a blue ribbon committee (including Bob Beck of Prudential) was appointed to put the system back on a sound actuarial basis. Bob Myers was retained as an advisor to the committee. The recommended changes were adopted and the program had a more realistic future for the next 50 years or so. But politicians can’t resist tampering with the system and again the future is starting to look murky and more will need to be done to assure its future soundness.

NALU (now NAIFA) retained Bob as a consultant for many years to advise us on Social Security matters and to be sure testimony we provided to Congress over the years was relevant and accurate. He was a fine gentleman, genial and accommodating, and a good friend. He and his wife attended several NALU Christmas parties and enjoyed watching the young people have a good time.

It is too bad he will no longer be around to add his wisdom to current debates on our social programs, including health care. My guess is that he would be appalled at some of the goings on taking place today.

The person who coined the phrase, “There are lies, white lies and damn lies,” was making a distinction between the various degrees to which a lie can be taken. The character of a lie is also important, for it often comes disguised as the truth. As Benjamin Franklin wrote in Poor Richard’s Almanac, “Half a truth is often a great lie.” Many others have noted the same thing and yet it continues to be a favorite political strategy.

As I write this, the long and painful ordeal of trying to reform our health care system is over–at least for the moment. It is, I believe, not to the credit of the administration that many of the more notorious of the forgoing degree of lies were spread around to achieve the narrow margin of victory in the Congress. The victory will likely be forever tainted by the chicanery and budget gimmicks that were used.

I was particularly offended by the rantings about the insurance industry, blaming it for most of the ills that beset our health care system. A damn lie occurs when the truth is known but is ignored. Ignorance of the truth can sometimes be excused, but deliberate distortions of the truth are deceptive and unbecoming to people in a leadership position.

A truth that seems to have gotten lost in the past year is that health care costs are what drive premiums–not the other way around as many would have the public believe. From what I know of the new law, there is not much, if anything, in it that will drive down costs, the basic problem. For example, it has been estimated that 17% of premiums paid in private plans are caused by the cost shift from government plans such as Medicare and Medicaid. The government plans only pay 45% to 65% of billed charges for care and services. The customers of private plans pay the difference. I have yet to hear any of the proponents of the new law admit that government is part of the problem.

The state governments have also added to the cost of insurance by mandating coverage for a wide variety of conditions. The reason there is such a clamor for the ability to purchase insurance across state lines stems from this issue. People living in New York have to buy expensive insurance because the state requires extensive and expensive coverages. In another state, Nebraska for example, a more basic and less expensive policy may be purchased by its citizens. This is not an insurance industry problem–it is a government problem.

And the voices are also silent on a major cost factor that should be unnecessary. I refer to direct and indirect costs associated with litigation. No country in the world has to support the horde of lawyers our system nurtures.

There has been much ado about bringing down costs, but little, if any, real action is contained in this new law. No wonder many, including me, believe that the real long term objective is for the government to take over the entire system. Given the problems other countries, particularly Western Europe, are having paying for their programs, it is hard to understand why we would want to move in that direction.

There is another problem that also seems to contradict claims by the law’s proponents and is particularly important today. Hardly anything is more important than creating new jobs. Caterpillar Company recently announced that the new law will add $100 million to its health care cost for its U.S. employees. If that proves to be true, then one has to wonder how many U.S. jobs will be exported to their overseas operations not so burdened. It is important for our companies to be competitive in world markets in order to preserve and create jobs.

I don’t know how all this will work out in the long run, but I am thankful that we had, for so many years, a person like Bob Myers who was not afraid to stand up to the expansionists. A true voice in the wilderness.


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