The Dave Ramsey "Math" rant about Obamacare.

[yeswecanandwedid]

This started to show up on my facebook over the last few days.

While watching it I smelled the B.S. but didn't have time to research it. It looks like another person confirmed my hunch that Dave was leaving some numbers out of his math equation.

http://chuckingrocks.com/?p=560

What are your thoughts?

[b757pilot]

1. WTF Dave!

Dave would be much better served if he stayed out of politics and if he was not a religious nut. Does he not see the irony that the heaven that his invisible sky daddy apparently made is a socialist dictatorship.

[fasttense]

2. Dave is so stupid it hurts.

I use to listen to him but then I got smart.
He acts as if he isn't just repeating the same old RepubliCON talking points.

First, he doesn't seem to mind the redistribution of paying taxes from the wealthy to the middle class and poor. The wealthy use to pay up to 90% of their income in taxes. Today the top 20% pay less than 30%. Corporations use to pay 30% of all taxes in the US, today it's about 8%. Tariffs use to be the main source of revenue for the federal government. Today a regressive income tax is the major source of revenue.

When Ronnie Raygun and Greenspan doubled the Baby Boomers payroll taxes, they also cut the uber rich taxes.

And he thinks it's better to play the stock market then to keep your retirement money in Social Security really is the ultimate in willful blindness. What was that huge crash we just had? How well did everyone's retirement funds do? How much money did you make when it crashed? NOt much, you lost money? Your retirement fund has put your city at risk of default because it lost so much of its value in the crash? Ramsey your stupidity hurts.

How about Obamacare. He says he is going to have to pay more because more people will have health care. But because Obamacare limits how much administrative costs an insurance company can claim to pay out, there will be more money available to pay for actual health care and there will be subsidies. Maybe instead of paying GE a subsidy, the federal government could pay a few people's health care?

Ramsey has NO Problem with CEOs of health insurance companies making billions in salaries and bonuses he just doesn't want that same money going to cover health insurance for people. He says it's all a scam. But funny how socialized medicine has not hurt any of the countries that currently give it to their citizens. Single payer health care has hurt no countries yet for some unknown reason, merely attempting to regulate out of control health insurance is going to ruin America.

Ramsey is not about Math. He is all about hiding his RepubliCON talking points in among financial counseling lies.

[grantcart]

3. What a pompous ass

1) It takes him two minutes to get to the point.

2) When he says he 'gets' the moral question, he doesn't. Before October 1st if you didn't have insurance and didn't have money you couldn't get access to health care, nowhere in the world is that considered a viable moral position, outside the US.

3) He completely misunderstands the economics involved.

Ramsey teaches personal finance with a system that includes having different envelopes for each expense, etc. It is a junior high school approach (which is not meant to mean that it isn't effective.)

He doesn't understand macro economics at all.

Currently the person who doesn't have insurance is still covered by emergency treatment at the emergency room and those costs are absorbed by people who have insurance. So when he says that including people who have pre existing conditions is a burden for the health care system, he is wrong.

By getting everyone covered you are doing three big macro steps:

1) Dramatically increasing the revenue base. This is the key to all insurance, the bigger the base the lower the costs.

2) You are moving people from the most expensive care (emergency room) to the cheapest care (preventative and regular care). The US spent a few hundred million to get rid of Small Pox, that and getting rid of other infectious diseases saves us hundreds of billions. The number one health threat of the future is Type 2 diabetes. You can spend a few hundred dollars to help prevent it or bring it under control or you can spend hundreds of thousands of dollars treating the result (25% of all blindness in the US is the result of type 2 diabetes).

3) There are lots of other cost savings benefits in the ACA including evolving the system away from pay per service.

Going to the "math" you need to understand Medical Loss Ratio, which clearly he does not. Single payer systems around the world typically have MLR (the cost of the insurance, or the amount that does not go to the health care provider) between 10 - 15%. The US system had lots of plans at 36%. ACA has a ceiling at 20%.

The other problem with his 'math' and understanding of insurance is that costs are affected by the size of pool you are in. The larger the pool the more the savings, and it can be substantial.

What the ACA does, in effect is take all of the people who are not insured and combine them into a single pool.

The other obvious thing he didn't address (in the first 3 1/2 minutes as I couldn't bear any more) is that the pre ACA system was a game where ins companies tried to pick winners and losers. That meant that there was a large number of people who both did have the money and didn't have significant insurable risks that were excluded simply because of age and demographics. This makes no macro sense and also fails on the moral side as well.

[JustAnotherGen]

8. Thank you grantcart

For explaining this!

[Snake Plissken]

4. People jumping to conclusion before the system even had a chance to take effect

clearly have an agenda, it's far from perfect, too much is given away to the insurance companies. I was hoping for a single payer system, but it's better than what is currently in place. How can anyone declare it a success or a failure until it's gone into effect and had a chance to prove itself one way or another.

These scare tactics are so 2004.

[hatrack]

5. BlahblahBLAH money blahblah Jeezus BlahBLAHBLAHblah MONEY Blah JEEZUS blahblah

I think that covers Dave Ramsey.

[Veilex]

6. Got about half-way through the video before I had to stop it....

He leaves out the addition of healthy people who couldn't afford healthcare previously, in the equation, who are dramatically less likly to get sick or injured. "Math" only works if you account for all the details.

[yeswecanandwedid]

7. You hit the nail on the head my friend! nt

nt

[cheapdate]

9. Thank you for this.

[jacksonvilledem]

10. Shocked Dave Ramsey Fan

I have given away dozens of Dave Ramsey's first book "Financial Peace" to people who I felt could use solid, basic financial advice. It was a potential life changer for people unable to grapple with painful financial issues in their lives. The advice to tithe to your church woven through the book was not appropriate for me, but certainly did not impact my love of the book. Now I buy used copies on the book sites and still give it away. I have not bought anything subsequent that he has written, or listened to his radio show.

I recently rented a car on a business trip, and it had satellite radio (which I loved), and heard Dave's "math" segment. I was dumbfounded.

I am a successful real estate developer and have sat on the foundation board of a major hospital system. Dave's segment was such a complete politically motivated and lopsided "analysis" of the ACA that I couldn't believe it. He ignored any benefits - both long and short term, overstated costs and detriments, and completely ignored the empathy to the poor aspect of the entire concept.

I will continue to give his first book away, but it will now come with a disclaimer that the Dave Ramsey on the radio is not the same core person that wrote the original book. I will also point out my belief that his tithe to the church advice is in direct conflict to his current lack of empathy for the poor - not that tithing is in any way bad. I can only speculate what happened, as I have not followed him outside the context of his classic first book. I can guess about what role his obvious success and associations has done to his core values - but guessing on such things is a fool's game, so I won't.