Health Care Overhaul
Recently the debate about healthcare has centered on the phrase “Health Care Overhaul”. Both sides of the issue clamor loudly for the advantages or disadvantages of such an “overhaul”. Often times in such a debate I find myself somewhere in the middle; and in this debate this is certainly the case.
That government should be limited by the express powers granted to it by the Constitution, to me, is a no brainer. But the flip side is that, as much as I might deplore it, government has grown greatly and is now a bigger part of our lives than the founders ever dreamed. One sure way for the government to get EVEN LARGER is to begin meddling in health care. This argument I definitely agree with.
However, it is unarguably a shame that in the United States, the self pronounced “City on a Hill” to the world, millions of people have little or no access to adequate health insurance. This is also unarguable.
So each side has a legitimate point, but as is often the case, are arguing for extreme positions. Doing nothing will not solve the problem posed in point 2, while a single payer system will only make the fears of point 1 even more concrete. Neither seems to be a plausible solution.
So let me put forth my compromise plan. I dreamed this up one day knowing little about some of the various detailed proposals that have been made (or the system in Massachusetts) but was pleasantly surprised a little while later that I was not the first to think of this! (OK, seldom am I the first to think of anything). So let me put down some details for you.
But before we begin, FIRST, we need to assess just what it is that we are trying to tackle. The original argument, and most convincing one, is the 47 million Americans who have little to no adequate health coverage. 47 million…that’s a LOT of people, roughly 15% of our population! 1 out of 7 Americans!
It doesn’t take long looking at the numbers to realize that this number, while convincing, is little more than an aggrandizing fib. Let’s break the numbers down:
47 million: the number of uninsured or underinsured.
80: the percentage of that number which are actually citizens or are naturalizing (i.e. are federal income tax payers)
15-20 million: the number of people who could afford health coverage but choose not to be covered. (Either they are wealthy enough to be self insured or feel they are healthy enough to not need coverage)
10-15 million: the number of people who already qualify for government provided health coverage
So, we do a little math and find out that the “47” million people that are always discussed, in fact, gets whittled down to 8-12 million citizens who truly cannot afford coverage. This comes out to be 3% or 1 in 30 Americans.
Suddenly it doesn’t look like such a big problem to tackle!
So, here is my simple solution:
Require some minimum coverage
If no coverage can be proven then perform means testing
1. If means are there, a direct tax is levied and the taxpayer is supplied with a government “pooled” plan
2. If means are not there, the citizen is NOT taxed and is supplied with a government “pooled” plan
So, there’s the outline. Here are the details.
First, everyone thinks it is fair to require drivers to carry some minimum level of liability insurance. This coverage is not necessarily to protect the driver, per se, but to protect all the OTHER drivers who may be injured by an individual’s actions, either physically or financially. Uninsured citizens who use medical services are necessarily harming other citizens by driving up the costs of health coverage for those who actually pay. They are also harming other citizens by adding instability to the system when they have no recourse but bankruptcy after accruing large medical bills. So requiring some minimum level of catastrophic health coverage is not so farfetched.
As for the government “plan”, this plan should be lean, mean, and revenue neutral (or close to it). The base price for this coverage should be par for the industry, at a minimum. It would probably work better if it was actually slightly higher (say 10-25%). The purpose of the plan is NOT universal coverage. It’s the opposite. It is a penalty if you do not go out and find coverage on your own. The premiums for this plan should be set at a level to encourage citizens to go out and get their own coverage!
But of course, not all Americans can afford adequate coverage. For this reason, some means testing is applied and the direct tax is either reduced (say by 50%) or eliminated, depending on the individual’s circumstances.
The plan should be mostly paid for through these direct taxes and partial taxes, keeping it as close to revenue neutral as possible. So here’s an example break-down.
The average cost of coverage is, say, $8,000 per year for a family of 4. This comes out to be $2,000 per person. (We’ll do the math based on individuals). So we’ll set the government premium at $2,500 (see the incentive here?).
Year 1 (using the low numbers of participants):
15 million are added to the roster and DO NOT qualify for reduced rates, all are taxed $2,500.
5 million are added to the roster and qualify for reduced rates, all are taxed $1,250.
5 million are added and do not have the means for any payments, all are exempt from the direct tax.
Total participants: 25 million
Total Revenue: $43.75 billion
Total Cost: $50 billion
NET: $6.25 billion or 0.3% of the Federal Budget
That net result is around $21 per American which, in theory, should mostly be made up for in reduced coverage costs (remember, 25 million people are now using their health coverage and are “spreading the cost around”).
Year 2: (worst case scenario—or best, depending on how you look at it)
5 million people remain on the roster and DO NOT qualify for reduced rates
5 million people remain on the roster and qualify for reduced rates
5 million people remain on the roster and are exempt from taxes
Total participants: 15 million
Total Revenue: $18.75 billion
Total Expenses: $30 billion
NET: $11.25 billion or 0.5% of the Federal Budget
Of course, you could play with the numbers, add multiple “tiers” of qualification, etc. But the point is this; compared to the price tags I’ve seen out there for other options, this plan seems to be incredibly cheap and easy to put in place! It deals with the problem of uninsured Americans while giving us as Citizens and incentive to take care of ourselves! Without this final point of encouragement, any sort of government supplied plan would almost certainly spiral into a single payer system. Checks must be in place to ensure that the government subsidized plan is NOT undercutting private business and encouraging people to rely on the government more than they already are!
That government should be limited by the express powers granted to it by the Constitution, to me, is a no brainer. But the flip side is that, as much as I might deplore it, government has grown greatly and is now a bigger part of our lives than the founders ever dreamed. One sure way for the government to get EVEN LARGER is to begin meddling in health care. This argument I definitely agree with.
However, it is unarguably a shame that in the United States, the self pronounced “City on a Hill” to the world, millions of people have little or no access to adequate health insurance. This is also unarguable.
So each side has a legitimate point, but as is often the case, are arguing for extreme positions. Doing nothing will not solve the problem posed in point 2, while a single payer system will only make the fears of point 1 even more concrete. Neither seems to be a plausible solution.
So let me put forth my compromise plan. I dreamed this up one day knowing little about some of the various detailed proposals that have been made (or the system in Massachusetts) but was pleasantly surprised a little while later that I was not the first to think of this! (OK, seldom am I the first to think of anything). So let me put down some details for you.
But before we begin, FIRST, we need to assess just what it is that we are trying to tackle. The original argument, and most convincing one, is the 47 million Americans who have little to no adequate health coverage. 47 million…that’s a LOT of people, roughly 15% of our population! 1 out of 7 Americans!
It doesn’t take long looking at the numbers to realize that this number, while convincing, is little more than an aggrandizing fib. Let’s break the numbers down:
47 million: the number of uninsured or underinsured.
80: the percentage of that number which are actually citizens or are naturalizing (i.e. are federal income tax payers)
15-20 million: the number of people who could afford health coverage but choose not to be covered. (Either they are wealthy enough to be self insured or feel they are healthy enough to not need coverage)
10-15 million: the number of people who already qualify for government provided health coverage
So, we do a little math and find out that the “47” million people that are always discussed, in fact, gets whittled down to 8-12 million citizens who truly cannot afford coverage. This comes out to be 3% or 1 in 30 Americans.
Suddenly it doesn’t look like such a big problem to tackle!
So, here is my simple solution:
Require some minimum coverage
If no coverage can be proven then perform means testing
1. If means are there, a direct tax is levied and the taxpayer is supplied with a government “pooled” plan
2. If means are not there, the citizen is NOT taxed and is supplied with a government “pooled” plan
So, there’s the outline. Here are the details.
First, everyone thinks it is fair to require drivers to carry some minimum level of liability insurance. This coverage is not necessarily to protect the driver, per se, but to protect all the OTHER drivers who may be injured by an individual’s actions, either physically or financially. Uninsured citizens who use medical services are necessarily harming other citizens by driving up the costs of health coverage for those who actually pay. They are also harming other citizens by adding instability to the system when they have no recourse but bankruptcy after accruing large medical bills. So requiring some minimum level of catastrophic health coverage is not so farfetched.
As for the government “plan”, this plan should be lean, mean, and revenue neutral (or close to it). The base price for this coverage should be par for the industry, at a minimum. It would probably work better if it was actually slightly higher (say 10-25%). The purpose of the plan is NOT universal coverage. It’s the opposite. It is a penalty if you do not go out and find coverage on your own. The premiums for this plan should be set at a level to encourage citizens to go out and get their own coverage!
But of course, not all Americans can afford adequate coverage. For this reason, some means testing is applied and the direct tax is either reduced (say by 50%) or eliminated, depending on the individual’s circumstances.
The plan should be mostly paid for through these direct taxes and partial taxes, keeping it as close to revenue neutral as possible. So here’s an example break-down.
The average cost of coverage is, say, $8,000 per year for a family of 4. This comes out to be $2,000 per person. (We’ll do the math based on individuals). So we’ll set the government premium at $2,500 (see the incentive here?).
Year 1 (using the low numbers of participants):
15 million are added to the roster and DO NOT qualify for reduced rates, all are taxed $2,500.
5 million are added to the roster and qualify for reduced rates, all are taxed $1,250.
5 million are added and do not have the means for any payments, all are exempt from the direct tax.
Total participants: 25 million
Total Revenue: $43.75 billion
Total Cost: $50 billion
NET: $6.25 billion or 0.3% of the Federal Budget
That net result is around $21 per American which, in theory, should mostly be made up for in reduced coverage costs (remember, 25 million people are now using their health coverage and are “spreading the cost around”).
Year 2: (worst case scenario—or best, depending on how you look at it)
5 million people remain on the roster and DO NOT qualify for reduced rates
5 million people remain on the roster and qualify for reduced rates
5 million people remain on the roster and are exempt from taxes
Total participants: 15 million
Total Revenue: $18.75 billion
Total Expenses: $30 billion
NET: $11.25 billion or 0.5% of the Federal Budget
Of course, you could play with the numbers, add multiple “tiers” of qualification, etc. But the point is this; compared to the price tags I’ve seen out there for other options, this plan seems to be incredibly cheap and easy to put in place! It deals with the problem of uninsured Americans while giving us as Citizens and incentive to take care of ourselves! Without this final point of encouragement, any sort of government supplied plan would almost certainly spiral into a single payer system. Checks must be in place to ensure that the government subsidized plan is NOT undercutting private business and encouraging people to rely on the government more than they already are!
posted by Cogito at 11:31 AM
2 Comments:
Luke,
I appreciate the thoughtfulness you put into each of your posts. However, I am firmly in the camp that decries anymore government intervention into health care. Even the slightest of compromises made in the health care debate will move us further down an already slippery slope. A "means" test is Marxism by definition, and is contrary to the founding principles of our country.
I agree that number of uninsured Americans thrown around by proponents of a health care overhaul is exaggerated for their benefit. But why should the government be concerned if one person or 100 million people lack health insurance? There is no "right" to health care, nor does the government have the enumerated authority to take my money in order to provide it.
Generally speaking, aren't health care providers considered to be private enterprises? What vested interest can the government claim that would require all citizens have health insurance? If a hospital goes bankrupt, it is not the goverment that is on the hook but rather the private investors. Besides, the quality of health care available only goes down when one group of people has to subsidize another.
(On a side note, why is there even a law that emergency services cannot be refused to people without insurance? If a starving man walks into a restaurant, that restaurant is not required to give him food.)
I can see where I might be labeled as uncompassionate or a hardliner, but we have nearly reached a point in our country where the majority of citizens rely on the goverment to meet their needs rather than learning self-reliance. If someone wants health insurance, then they need to do what it takes to afford it. I realize that there are a few individuals that are unable to work, but isn't that what charities are for?
The church is the true "City on a Hill" (see Matthew 5:14), so when our politicians claim that title then the American people expect government to fulfill the role of the church. However, charity can not (and should not) be forced upon citizens in the form of taxes.
Brad,
First, a "means" test is not Marxist. Marxists would provide everyone the exact same health coverage...a single payer system. I reject this completely. While we are trying to provide everyone health care, I'm approaching this in a completely different way.
First, you are correct, there is no "right" to healthcare. But the government can easily require everyone maintain some level of health coverage under the General Welfare clause of the Constitution. And my plan completely satisfies the "general" nature of the spending. Here's why:
The objective of this plan is not necessarily to help the few who do not have insurance, although that is a definite plus. It's mainly to protect the many who DO have health insurance.
According to some figures, uninsured or underinsured people using health care services cost those of us who pay for insurance about $300 or so per year in increased premiums. That's as much as $1,200 per family! Doing nothing leaves this "penalty tax" in place.
Meanwhile my plan would cost about 1/10th that per person, effectively lowering this "penalty tax". On top of this, it helps solve the problem of the chronically uninsured.
Your argument about restaurants is not a very good one. I think you would agree that restaurant operators and health care providers hold themselves to entirely different sets of ethical standards.
Regardless of whether it is the law or not, most doctor's would agree that denying someone emergency services based on means would be ethically wrong. Doctor's decide the ethical standards by which they hold each other and can decide whether someone is fit to practice if these standards are broken. If there is a law that says they must provide services, and this law gets repealed, I still don't think much would change.
And finally, the City on the Hill analogy of course has Biblical sources (the Puritans were the first to use it after all). But it is a philosphy that is thoroughly engrained in American society--not just used by politicians. See American exceptionalism. (and don't look at Wikipedia! What garbage!) It's not the state replacing the church in any way.
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