Healthcare, Nullum Gratuitum Prandium

Nullum gratuitum prandium (there is no free lunch).  Health care in America is going to cost somebody something.  The question now seems to be, how much will it cost and where are we going to find that “somebody” willing to pay.  Is it really that hard to figure out what’s wrong with our current healthcare system and come up with solutions that offer something better than what we now have?

You can call it Obamacare, or Trumpcare, or Medicare, just don’t call it, “I Don’t Care.”  Eventually, everybody cares.  If you live long enough, you, or someone close to you, will need something more than a Band-Aid.

Well, the first problem we have is where to find the money.  I have a few ideas that will help us along.  They may not be the total solution, but I think most of these ideas are better than giving the wealthy deep tax cuts while shifting the healthcare burden to the remaining 99.9% of us.  Cutting taxes and cutting coverage seem to be simple solutions developed by lazy minds.  Good solutions are only difficult if you go in trying to cut how much we spend on healthcare while looking to find ways that private industry can make a greater profit.   If you try to pair a massive tax cut for the wealthy with an improved healthcare delivery system, you are doomed.  Such goals are not just unattainable they are unrealistic.

In Greed We Trust

What would be achievable?  You could identify additional revenue sources while lowering existing costs for healthcare.  You can outline the structure for the delivery system.  The one very important rule here is that everyone must participate.  Healthcare coverage can’t be voluntary.

Why don’t we?

1. Eliminate the cap on Social Security where people earning over $127,000 (in 2017) stop paying into the system.  Then take the added revenue from this “new tax” and put 20% into the Social Security System and the remaining 80% into a Medicare for All Fund.
2. Mandate that all employers who don’t fully provide an approved healthcare insurance plan, who have 25 or more employees and/or contractors, be required to pay $1.00 per hour into a compulsory savings plan (CSP) up to a maximum of $40 per week.  Where contractors, part-time, or salaried employees can be shown to work fewer than 40 hours per week, the $1.00 per hour rate will apply.  The CSP is set up for individuals and would be held in interest-bearing accounts.
3. Employers who do provide an approved healthcare plan will pay a lesser amount for each employee than the amount identified in number two above.  This will go a long way to make insurance “portable” in the event that employee becomes unemployed.  These payments will also go into an employee identified CSP.
4. Begin taxing those workers currently exempt from paying Social Security, like some federal and state employees, railroad workers, and certain religious groups.  You would only tax these individuals when their salaries exceeded the current Social Security cap.  For these individuals 100% of the amount collected would go to the Medicare for All Fund.
5. Impose new taxes on liquor and tobacco that will go directly to the Medicare for All Fund.  Charge $0.01 per ml of distilled spirits ($0.75 for a 750ml bottle), charge $0.01 per oz.) for beer (12 cents a bottle), and similar rates for other forms of alcohol.  Tobacco could be billed at $0.05 per gram of tobacco in your product, which would be about $0.75 for a pack of 20 cigarettes.  If marijuana is ever approved and taxed, it too would be included here.
6. Raise the top marginal tax rate and raise the capital gains tax.  Reagan lowered the marginal income tax rate from 70% to 28% and the capital gains tax went down to 20%.  Raise both by two percentage points to help pay the cost of Medicare for All.
7. Reinstate the luxury tax implemented in 1991 by George H.W. Bush but eliminated in 1993, and put it to paying for healthcare.  Individuals who can afford big-ticket items like luxury cars, private aircraft, yachts, furs, and expensive jewelry can afford to help out the nation that provides them with the opportunity to make the big bucks.
8. Tax corporations and wealthy individuals who elect to make political donations to PACs and similar organizations, in excess of previously established contribution limits.  They should have a portion of that donation taxed and funneled into our national healthcare coffers. 

I’m sure I missed some other logical sources of revenue like charging politicians every time they are caught in a lie, but we don’t want to raise too much revenue.  Our current president could end up funding the entire plan.  The figures used in the enumerated points above are all arbitrary and completely negotiable but serve as examples of reasonable sources of revenue for healthcare.

Now, what can we do to make healthcare more affordable?  Let’s reduce the cost of that care.  Why not allow the Federal Government to act as a central purchasing contractor for all medications, medical equipment, and medical supplies.  The government would negotiate the rate that they will pay/reimburse for those items.  They would be allowed to negotiate the prices for drugs, medical supplies, and medical equipment in the global marketplace, not just the US.  Buy America first, but not exclusively at the expense of our healthcare.  This one act could make a dramatic impact on current costs.

Negotiate Prices

All US citizens under age 65 would be provided basic Medicare type services.  The existing Medicare structure could work where everyone is covered by the federal plan for basic healthcare.  Insurance carriers could operate at the state, regional or national levels as they choose and could offer enhanced plans for those willing to pay.  They could use the federal negotiated rates for drugs, equipment and supplies, or they could negotiate their own rates.

Insurance carriers would be required to offer their plans to all residents of the states or regions where they elect to operate.  National carriers would have to be open to all citizens.  The federal government would charge a fee to all insurance carriers offering health insurance and accordingly underwrite those carriers against catastrophic losses in the event of pre-existing conditions or unforeseen chronic illnesses or injuries.  Fees and thresholds would need to be negotiated regularly.

No healthcare would be free.  Some form of copayment would be required for all services.  Where an individual has a CSP (compulsory savings plan), copayments would be made from that fund.  There would be an opportunity, after an individual goes on regular Medicare at age 65, to cash out any funds remaining in their CSP, tax-free.  This compulsory savings plan would provide some incentive for people to avoid unnecessary trips to the doctor and to try to maintain a healthy lifestyle.  Stay healthy and you have money in the bank at age 65.  At $40 per week and nominal interest, a little used CSP could have over $100,000 in it at retirement.  They could then use some of this money to buy a good supplemental health insurance plan or just take that long-postponed vacation to Singapore.

I mentioned Singapore only because they currently have a healthcare plan that provides better national health care coverage than the U.S.  They do this for a lower per-capita cost and provide better care.  According to a year 2000 study conducted by the World Health Organization, Singapore ranks 6^th overall in the world for the quality of care.  Bloomberg ranked them as the most efficient in the world in 2014.  America ranked 50^th out of 55 countries in the Bloomberg review.  Life expectancy in Singapore is 82.65 while Americans can expect to make it to 78.94.  While these reports, like any complex analysis, may be subject to criticism, the takeaway here is that there are many better programs in many other countries.  We can and should do much better.

I don’t have access to the resources of our congress.  I don't have the Congressional Budget Office to work the numbers offered here to discern their viability, but then I wasn’t elected and paid to do that job either.  Come on congress.  Earn your keep.  You know you can come up with a good plan.  You certainly came up with a better healthcare plan for yourselves*.

*  One theory about the urgent need to repeal the ACA, put out by by Jeffery Frank of the New Yorker in his January 17, 2017 article , was that access to the Federal Employees Health Benefits Program (FEHBP) was eliminated by Article 1312 of the Affordable Care Act.  The FEHBP was the wonderful plan that the Post Office, Congress, and congressional staffers had enjoyed since 1959.  With the repeal of the ACA, these same government employees could go back to their original plan with all its benefits.  Is Congress so devious that they would better themselves at the expense of their constituents?

I'll have what Congress is having. (scene from When Harry Met Sally)