Who will be the
The most logical – and the most natural – process for the delivery of goods and services is, and since the beginning of human civilizations has always been, through market forces. Incentivizing people to earn the ability to obtain goods and services, and providing them with options to choose among alternative products, always leads to higher quality, lower prices, and dynamic innovation, all at the same time.
As our economy becomes ever larger and more complex it is apparent that it is continuing to develop a scope and scale far beyond the ability of Big Government central planners to efficiently and effectively address public policy issues. This is as true with healthcare as with any other sector of the economy.
Consider the manner in which the Federal Government burned through over a billion dollars of taxpayers’ money to roll out its error-plagued healthcare website. Proponents of the law have as late taken to bragging that the website actually works now – as if that’s something to be proud of. Imagine if Amazon or JetBlue had corporate communications personnel bragging that their websites work. Wouldn't they be embarrassed to have set the bar that low?
Yet when government is involved we seem resigned that the bar must be set that low. The healthcare law and its execution are still error-plagued. Big Government's cheer-leaders nothwithstanding, we have just learned that over 800,000 policyholders were provided with incorrect tax information from the website, and now the Federales have urged taxpayers not to file their returns. Yup, don’t file your return until the Feds can figure out the tax code and the health law. And this law was passed five years ago. Still working on it. Had enough "low-bar" Big Government yet?
Let's strive to make healthcare as market-based as possible. The logical starting point for healthcare is to allow people to choose for themselves among a host of competing insurers and products. The key issue is access and affordability. We need to ensure all Americans have access to healthcare – it is a crucial building block in helping individuals build their own, unique, personal American dream.
The government has two roles in the system: ensuring universal access through affordability; and maintaining and enforcing a regulatory framework. Getting everyone to participate, and arbiting disagreements between participants.
Affordability is not that complicated, it comes in two pillars. First, incentivize Americans to save (yes, save!) for medical expenses by encouraging all individuals to open tax deductible health savings accounts, from which all – but only – medical expenses of the taxpayers and his/her dependents can be paid. Monthly insurance premiums would be charged directly to the account. Accountholders would be provided with a debit card which can be used to pay for copays and other designated expenses such as, perhaps, gym memberships.
The second pillar of affordability is subsidies for low income individuals. In this egalitarian system we are proposing, low income people open an HSA just like everyone else, and they would have the same insurance options as everyone else. They receive their subsidy in the form of a direct deposit to their HSA. They buy their insurance like everyone else. For people with no income, their subsidy would cover the full cost of the average policy that someone in similar "Age and Wage" circumstances would generally face. From there the subsidy would slide down the scale to zero at some point in the general vicinity of the median income.
If you were reading between the lines and thinking ahead, yes, you are correct. Everyone regardless of age or wage participates in the same system. There is no more Medicaid or Medicare. Everyone buys quality, market insurance at efficient, market prices. The societal benefits to this change are enormous.
Massive federal and state entitlement bureaucracies would be eliminated. Even if they were well run, these bureaucracies still cost the taxpayers billions annually. But they are much worse than merely massive tax sink holes, they are fraught with waste and fraud which cost the taxpayer billions more. But in our plan, the bureaucracy is gone. And all the waste, fraud and crime that goes along with it? Gone.
Even the Veterans Affairs bureaucracy would be slashed – not veterans’ benefits, just the VA bureaucracy. Veterans who are eligible for healthcare would have their HSA’s funded by the VA so that they would be able to obtain, at no cost, the same commercial insurance as all other Americans. The VA would be much more effective and efficient in its most crucial roles if it would confine its healthcare mission to the core responsibility of the physical and emotional traumas of combat. This would eliminate all the scandals that have plagued the VA for decades.
Further, and this is a problem ignored far too often, government is currently participating financially in the system. They have skin in the game. They are the referee, and a player. Government is the pitcher, and the umpire. It call balls and (mostly) strikes on its own pitches. Who, that has their thumb on the scale, can resist the urge to press down? Guess who wins? Yes, the government and its influence peddlers; and who strikes out? Yes, everyone else. Such as doctors, and taxpayers. The phrase “bend the cost curve” is code for “screwing doctors”. Cutting reimbursements to doctors creates positive short term “cost saving” headlines, but will have detrimental long term consequences to the quality of healthcare. Government needs to be dedicated to its rightful place as an umpire alone, and not compromising its authority and impartiality by picking up a bat or glove and taking a position against some players.
Everyone participates in the system we propose – veterans and civilians, regardless of age or wage. Yes, all 320,000,000 Americans. If you want a subsidy, you must file a tax return. This incentivizes people to get out of the shadows and participate in the visible economy.
And how do we pay for this? This is a question that no one wants to face. But we need to face the fact that healthcare is expensive. Think about the terms “civil war” or “freezer burn” – they are classic oxymorons. So is “Free Healthcare” - There is simply no such thing, it’s not logically possible. One way or another we pay, and pay we do. Healthcare is extremely expensive – it represents over one-sixth of our entire economy. That means Americans spend about $3 Trillion per year on healthcare. Even if we think we are getting “free healthcare” from our employers, we are not – our employer reduces our salary. It all comes out of the same pool of money that they set aside for employee compensation.
Unfortunately, the tendency to hide and bury healthcare costs – such as in Medicaid, Medicare, or employer programs – adds to the inefficiency of our system. If people don’t know how much something costs, and can they make rational choices about how much to consume? Bringing healthcare costs out of the shadows, and into the light, will make the system more efficient. The truth is ugly but we need to face it. Can we handle the truth?
Presently Medicare is funded through payroll taxes, levied on both employees and employers at a combined rate of 2.9%. Most people know they pay a Medicare tax, however, far fewer people realize that employers are also paying that tax, that's actually tax on hiring and paying wages! Our plan phases out these economically perverse payroll taxes. We should seek to eliminate payroll taxes to the fullest extent possible as they represent a disincentive for individuals to seek and maintain employment, and a disincentive for employers to hire and retain workers. Eliminating this tax cuts payment and administration costs to employers, and increases employee take-home pay. It will stimulate employment and job creation.
Healthcare subsidies should be paid for by a sales tax on healthcare expenditures, including premiums and out-of-pocket costs. The bad news is that the rate will be hefty, but there are at least two pieces of good news: first, people will finally grasp just how much of our total healthcare costs are going to subsidies, and second, Medicare and Medicaid would no longer exist and funding for age and wage healthcare programs would come from this tax rather than income taxes, so federal and state income rates could be substantially reduced over time. Thus we would be again reducing disincentives to hiring and employment, and thus spurring economic activity.
It’s a very simple program. Everyone participates without obtrusive mandates of questionable constitutional validity. Upper income people will participate because even if they don’t buy insurance and pay cash to a top-tier doctor, the doctor will still be required to collect the tax and fund the subsidy system; middle-income people will want to participate so they can tax-deduct their HSA contributions, a benefit that would significantly offset the healthcare subsidy funding tax; and lower income people will participate in order to collect the subsidy. Individual HSA contribution limits would be quite high – ideally we would want individuals to accumulate substantial balances in their HSA in case of future difficulties.
The mechanics are simple. Individuals report their HSA account number to the IRS. The IRS collects the Healthcare Subsidy Tax and accumulates funds in a segregated account. Each month the IRS transfers a calculated amount based up on the individual’s prior year income. So, beginning on July 1 of say, 2015, the IRS would initiate a monthly transfer to the taxpayer’s HSA. Because the subsidy transfer is based on prior year actuals rather than current year estimates, the IRS has no recourse for its errors, it has no “claw back” powers, and there is no “honor system” such as the one that relentlessly haunts Obamacare enrollees.
This is a good, market-based system. It is simple, and cut out most of the bureaucracy that add so much to the final cost of healthcre in America. It keeps the government out of the physician/patient relationship. It allows supply and demand to determine price and quality. It gives employees and employers the freedom and ability to make advantageous choices, rather than mandating behaviour. It's a good system. It's as good as it gets.
QUESTION - Who made the following statement?
"The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents - #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back -- $30,000 for every man, woman and child. That's irresponsible. It's unpatriotic."
ANSWER - That would be Senator Barack H. Obama, speaking of President George W. Bush, In Iowa on July 3, 2008. Yes, a sitting US Senator had the insolence to question the patriotism of a sitting US President.
Yet, Obama is adding to our debt burden at twice the rate Bush did. If, as Obama insinuated, a President's patriotism can be denigrated by the extent to which they have added to the debt, then Barack H. Obama is only half the patriot that George W. Bush is.
Yet, on February 18, 2015 in New York City, when Rudy Giuliani called Obama's patriotism into question, he was excoriated by Obama's liberal media. There's that double standard again - Obama can call out other Presidents' patriotism, but his own patriotism cannot be questioned, not even by the same measure he calls out others.
So, who's unpatriotic now?
"My own mouth condemns me, and not Rudy Giuliani; and my own lips testify against me."
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