Thursday, July 16, 2009

Those Who Have the Most Money Should Contribute the Most to Health Care for All

There's something uniquely American and wrong about the approach that the nation is taking to the reform of health care: The United States already spends fifty to one hundred percent more per capita on health care than other countries that have health care for all. And now, the US plan to cover everyone will cost five hundred billion to a trillion more dollars, which will make it perhaps 150% more expensive than our nearest rival.

There are a lot of reasons for this, but the primary one is deference to medical entrepreneurs and corporate players. Some physicians order twice or three times as many CAT Scans because they own a CAT scan machine and have to find a way to pay for it. And that's something I haven't heard directly addressed. Some hospitals charge two or three times more for the same operations as others do, without providing better and sometimes providing worse medical outcomes. That reality, to, is one I haven't heard directly addressed.

While the Brazilian Government provides medicines for free, by focusing on bulk purchases or manufacture of brandless drugs, the US's health care plan will extend from six years to twelve the number of years that a drug remains under patent and cannot be purchased as generic, which will make the price as much as ten times more.

The massive bureaucracy associated with individual mandates to purchase insurance, and mandates for employers to purchase insurance will effectively double the bureaucracy that now exists at the IRS, as well as the paperwork for employers, for the purpose of collecting tax receipts that pay for national programs.

And so I'm concerned that the health care "reform" that's on the table will accept the most wasteful aspects that make US health care so expensive and spend more money on them. Instead, the US Congress should raise taxes on the wealthiest one percent of Americans to a level sufficient to pay for the whole program, which would be fair because those who are making the most money and have the ability to support health care would also pay the most.

I rarely agree with arguments made by members of business groups, but I do agree that there are some large and small businesses that are barely viable financially now, and adding a new tax to them, regardless of their ability to pay, could hurt jobs and the recovery. Instead, as Congressman Charles Rangel has proposed, those individuals who demonstrably ARE making the most money should shoulder the burden for this reform. That way, those who make the most money out of the health care system would also be those who pay the most to keep its inefficiencies as they are.

Certainly the Republicans will argue in the next election cycle that Democrats implemented new taxes for Americans, but this argument will be more easily countered now, as during the Clinton Administration, if Democrats can say that only the rich are paying more while the working class and middle class (the vast majority of taxpayers) are reaping the benefits.


GF Alexander said...

I agree completely. “Between 1979 and 2006, the inflation-adjusted after-tax income of the top 1% of households increased by 256%, compared to 21% for families in the middle income quintile. Meanwhile, the effective tax burden of that 1% has been falling for nearly 15 years.” (, 21 July 2009).

And while health care services are quickly eroding for the average person, profits of the 10 largest publicly traded health insurance companies rose 428 percent from 2000 to 2007! Understandably, when the CEO of United Health Group earns over $8M in salary plus another $1.6B in stock options! (Wall Street Journal, 2006.)

There’s a disparity in the treatment of different income earners when it comes to income and health care spending. It’s generally known that those who pay higher premiums for healthcare, mainly higher income earners, enjoy a better selection of health care services and benefits. According to the McKinsey Quarterly (March 2009), income earners averaging $210,100 annually have benefitted from rising incomes and growing employer-paid health care benefits, making their out-of-pocket health care spending relatively small and affordable as a portion of total spending. Those averaging between $41,500 and $84,800 have also seen increasing benefits and incomes, but at a much slower rate, making their out of pocket costs increasingly more expensive. For those earning an average of $14,800, they have seen little change in their income levels, and their employers are less likely to pay for health insurance; thus health care options are rare and difficult to afford.

Francis L. Holland Blog said...

Thanks! Let's hope the US Congress takes that into account as they're deciding whom to bill for Health Care Reform. The obvious and most simple solution is to bill those who have the most money and can't figure out what to do with it all: the rich!