Wednesday, November 18, 2009

POLITICS: Funding Health Care Reform: A Modest Proposal

How to pay for health care reform—it’s perhaps the biggest issue in the whole ongoing debate. There are some people who simply don’t feel comfortable with the idea of the government handling such a personal part of their lives. Others fear the government wouldn’t do a good job of administrating such a large undertaking. These are reasonable concerns in the debate, but they are not the concerns of the majority of people in this country. I’m ignoring for the moment the fringe alarmists—the teabaggers and their FOX News-fueled parrots who decry socialism and fascism and communism and any number of bat-shit crazy ideas their beloved pundits dribble out. They’re the extreme minority in this debate.

But among the vast majority of reasonable citizens in this country, whether they come from the political left, right, or center, the question of how we would actually pay for the kind of public health care reform that’s been debated for the past eight months is a COMPLETELY rational, necessary, and crucial question.

I truly believe that 90% of all Americans would love to have a single-payer system that provides every citizen with complete health care coverage. We feel we should educate every American child, don’t we? We feel our military should defend every American citizen, right? And we all agree that our local fire and police departments should serve and protect every individual in our locality equally, don’t we? So why would providing health care—a quality of life issue—be any different? Like I said, for 90% of Americans, I don’t think it is different.

So what about the 10% that doesn’t believe a single-payer system providing health care for every American citizen is a good idea? Who are they? Take a guess. Yep—the health insurance industry, the pharmaceutical industry, corporate hospitals, and Wall Street investment firms that are deep into these industries. (No, don’t confuse yourself with a Wall Street investment firm in deep. Your piddly mutual fund holdings and stocks in Cigna or United Health don’t make you a shareholder with a valued voice. You’ve got the power of a gnat among T-Rexes.) And let’s not forget the teabaggers and the other morons who have been convinced that a for-profit health insurance employer is better able to make decisions about your health than a non-profit federal agency would be. Of course, these are also the same people who are still waiting for tax cuts for the rich to trickle down to their meager wages.

We’ve heard President Obama use the phrase “everyone has to have skin in the game” when talking about how to pay for health care. I have a number of issues with the role Obama has played in this health care debate—primarily that he has let Congress set the agenda rather than offering a detailed program for reform from which the Congress can work—but I agree whole heartedly with this notion that everyone has to be involved in resetting our failed health care system. But Obama hasn’t done what he really needs to do: specify a way to pay for this that makes sure everyone has skin in the game. In fact, it’s one part of the debate he’s been a bit of a pussy about—to his and the health care cause’s detriment. The current Democratic leadership in the Senate is spineless in many ways, but they’ve had to grapple with the sticky details of how to pay for health care reform. And Speaker Pelosi and the House have recently put their ideas for payment on the line and actually voted on it.

Because Obama has been such a weak voice in this very central issue of how to pay for health care reform, I want to take his idea that everyone has to have some skin in the game and make an actual proposal. It’s modest and simple and very straightforward:

Every American adult who files a tax return pays $1,000 a year to contribute to a National Health Insurance program.

That’s it. And here’s why it would work: in 2007, there were 141 million tax returns filed. Multiply that by $1,000 and you get $141 billion dollars. Congressional Budget Office scoring for the current health care reform ideas are coming in at $100 billion or less a year. With every American adult tax filer paying $1,000 a year, that’s about $41 more than we need. And how would that translate to our paychecks? That’s $83.34 a month. About $42 every paycheck if you’re paid twice a month. Wouldn’t $83 a month be a lot better than the $300-$800 that many employees now pay for health care every month? Which would you rather pay?

Here’s how this idea would work: our obligation to National Health Insurance would be $1,000 a year. It would be paid either as a deduction from your check if you’re paying for it yourself or your employer would pay for it as part of your benefit package. Employers could choose to stay with the private insurance plans they offer their employees, and employees could choose to keep paying the hundreds of dollars a month they currently pay in those arrangements for private insurance. But the National Health Insurance premium would have to be paid regardless.

Of course, employers could decide to drop private insurance completely and just pay for their employees’ National Health Insurance obligation of $1,000 a year. Fair enough—the employees will still get guaranteed coverage via the National Insurance system, or they can take the hundreds of dollars a month they used to pay for private insurance and now get in salary from their employers to buy their own supplementary private insurance. And imagine what employers—especially small businesses, the engine of the U.S. economy—could do with an additional $10,000 every month they no longer pay for their employees private insurance?

So what happens if thousands and thousands of small businesses across the country drop their private insurance and opt to pay their employees’ annual $1,000 National Health Insurance obligation? It’s paid for whether they stick with private insurance or not. If upon review every year it appears that more money is needed because more and more people are relying on National Health Insurance, then the annual rate is raised—except unlike private insurers, who favor 15% and 20% premium increases annually, we’d be looking at more like 1% or 3% increases with a National Insurance plan. So which would you rather pay: $300 to $800 a month for private insurance or $83 to $90 a month for National Health Insurance? And if this National system really took off and the majority of people in the U.S. began using it, then the rate would be adjusted to pay for it—so even a whopping 50% increase in the annual obligation ($1,500) would run you $125 a month. What’s a 50% increase on $800 a month?

And let’s not forget the population numbers game here: for the next 25 years or so, we’ll have the baby boomers—the largest population sector of our society by a long shot—moving into Medicare and in need of extensive health care. The more money we have in a National Health Insurance system, the easier it will be for us non-baby boomers to survive the huge resource drain the aging boomers will inflict on our economy. If such a National Insurance plan costs us all $125 or even $200 a month for a decade or so, it’s still easier to handle than the hundreds or thousands it will cost through the private insurance system we now have. And as morose as it may sound, come 2025 or so, that huge baby boomer population will be dwindling, requiring less care and far less in premiums from the rest of us.

Obviously, those living in poverty who do not file tax returns would pay nothing—just like the health care system is now. But whether you make 30K a year or 300 million, EVERYONE would pay the same and have skin in the game. And I think that’s part of what’s missing in this whole debate from the health care reform proponents: everyone needs to pay so that everyone gets the benefits. This kind of elemental fairness appeals to Americans. Sure, some AIG executive will be able to afford a gold-plated private insurance plan that a line worker or a freelance writer like myself would never be able to afford, but at least we’d ALL be contributing similarly to a National Health Insurance plan.

Of course, as it looks now, we’re not going to get anything as simple and equitable as a National Health Insurance plan from the Congress and the insurance, pharmaceutical, and corporate hospital lobbyists that own our representatives. We’ll probably end up with some watered down giveaway to private insurance—kind of like the Medicare Part D deal former President Bush and his crew struck with the drug companies a few years ago.

Ultimately, what a modest proposal like this National Health Insurance paid for by most Americans would do is marginalize the private insurance industry. Private insurance is the only part of our current health care system that doesn’t actually contribute anything to the health or well-being of Americans. It only makes money from healthy Americans. And creates a lot of stress for those who have to deal with claims. But the thing private insurance does best is make contributions to politicians—on both sides of the aisle. The largest private insurance companies are currently spending over a million dollars of our monthly premiums every day for advertising and lobbying efforts against any kind of health care reform. So if this health reform bill currently being debated seems like a big, sloppy, confusing, watered-down mess, you can be assured of one thing: the insurance companies were working hard to do what they do best.

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