Robert Reich: The Only Sure Way to Fund Universal Health Care

[marmar]

from TPM Cafe:



The Only Sure Way to Fund Universal Health Care
May 24, 2009, 11:38AM


During the presidential campaign, I thought Obama made only one big policy mistake. He criticized John McCain for proposing to tax all employer-provided health benefits. McCain’s overall health plan was regressive – he would have turned the savings into tax credits for purchasing health care – but he was right about where the revenues should come from. I worried that Obama would come to regret the position he took.

Half a year later, it appears that the President will need to tax employer provided health benefits in order to finance universal health care. Or at least the tax-free benefits now enjoyed by higher-income employees. Many in Congress and in the White House are convinced it’s the only good option. Max Baucus, chair of Senate Finance, expliticly put it on the table last week. Peter Orszag, the President’s budget director, has told Congress the option should remain on the table.

The White House is in a revenue bind. The President had intended to raise money for health care by limiting the income tax deductions that wealthy taxpayers can claim. This would have generated some $318 billion over ten years, about half of Obama’s proposed “health care reserve fund.” But the proposal ran into a buzz saw of opposition from congressional Democrats. Not only did Baucus balk but so did Charles Rangel, chairman of the House Ways and Means Committee.

With deficit vultures already circling, Obama has to come up with a far more reliable way to fund health care. That’s where employee health benefits come in. According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees would go a long way to funding universal health care. Employer-provided health insurance is the biggest tax break in the whole federal income tax system. ..........(more)

The complete piece is at: http://tpmcafe.talkingpointsmemo.com/talk/blogs/robert_reich/2009/05/the-only-sure-way-to-fund-univ.php

[MannyGoldstein]

1. More Bizarre Eschewing The Obvious

Every other industrialized country has better medical outcomes than we do. Every other industrialized country has cheaper health care than we do. Every other industrialized country has universal health care that is single-payer or similar.

If we go to universal single-payer health care, we will spend *less* for health care. We should not have to raise taxes on employer-sponsored health-care to pay more.

Obama and the do-nothing Congressional "Democrats" need to stop their crap-tacular capitulation to anyone who throws 'em a few shekels, and enact Medicare for all.

[ToolTex]

2. Exactly. Single payer is the only solution. A red herring from Robert Reich. n/t

[stray cat]

9. How much will single payer cost per person - facts only not fiction

from kids to elderly adults all pay the same and how will treatment be rationed because rationing is occurring now and will have to be part of any health care plan

[MannyGoldstein]

26. Unless We're Really Really Stupid, It Will Cost *Less*

We have the most expensive health care in the world, per person - by far. And the worst medical outcomes in the developed world.

So if we switch to the same type of health care system that every other developed country has - universal with single payer or similar - our costs should *drop* and our quality *increase*. Unless there's something special about the US that just makes us unable to do what *every* other developed country has done.

[L0oniX]

29. Remember, England started their health care system right after WW2...

when the country was at one of its lowest socioeconomic levels. Do you think we are at that level now? SPHC now.

[emsimon33]

30. Single payer is the only solution

Please watch Bill Moyers Journal from May 22 on health care reform:
http://www.pbs.org/moyers/journal/05222009/watch.html

"DR. SIDNEY WOLFE: The seats at the table, or the witnesses at the hearing are, in a sense, controlled by the health insurance industry. They don't want someone essentially saying, "We don't need a health insurance industry. We can do what most other countries in the world have done. Have the government collect the money and pay the bills and get rid of all these people who are wasting $400 billion a year on excessive administrative costs.

"So, we have got a fragmented health insurance industry. And it thrives on being fragmented. The drug countries make much more money with the fragmentation, because there's no price control. The insurance companies make much more money, 'cause they can push away people who aren't going to be profitable. The only people that suffer are the patients."
http://www.pbs.org/moyers/journal/05222009/watch.html

or read the transcript:
http://www.pbs.org/moyers/journal/05222009/transcript4.html

[emsimon33]

31. We would save at least $400 BILLION a year

Please watch Bill Moyers Journal from May 22 on health care reform:
http://www.pbs.org/moyers/journal/05222009/watch.html

"DR. SIDNEY WOLFE: The seats at the table, or the witnesses at the hearing are, in a sense, controlled by the health insurance industry. They don't want someone essentially saying, "We don't need a health insurance industry. We can do what most other countries in the world have done. Have the government collect the money and pay the bills and get rid of all these people who are wasting $400 billion a year on excessive administrative costs.

"So, we have got a fragmented health insurance industry. And it thrives on being fragmented. The drug countries make much more money with the fragmentation, because there's no price control. The insurance companies make much more money, 'cause they can push away people who aren't going to be profitable. The only people that suffer are the patients."
http://www.pbs.org/moyers/journal/05222009/watch.html

or read the transcript:
http://www.pbs.org/moyers/journal/05222009/transcript4.html

[Marksbrother]

3. I agree with you, but getting people to do the right thing is

extremely hard to do, especially when you consider the greed factor that drives politicians into the arms of special interest
industries, rather than the special interests of society.

[underpants]

11. Welcome to DU

:hi:

Time flies like an arrow, fruit flies like a banana

[jody]

4. IMO Reich is correct, finding ways to fund Universal Health Care will be difficult and the final

package will probably not come close to people's expectations.

I agree with Obama that government polices for rationing health-care will be needed but that is an unpalatable topic as evidenced by zero posts to the thread re "President Obama's Grandmother and the Ethics of Health Care Reform" in DU's Health forum.

[CTyankee]

6. The problem, it seems to me, is that you are asking companies of businesses NOT in health care to

assume the tax burden for those that ARE. Why would any business take on MORE expense for health care when the REAL problem is that they can't compete in the world market because other countries provide health care for their citizens?

this just makes me crazy...

[jody]

8. Agree but in a not dissimilar way, why should healthy people 20-30 years old pay for health

insurance for unhealthy 60-70 year old people?

I understand that today youngsters 20-30 years old when given a choice accept minimum health care while unhealthy 60-70 year old people tend to choose maximum.

My assertion may not be completely accurate but I believe it's roughly correct.

[CTyankee]

12. Your response makes the case for universal care. Under this proposal, the risk is spread around

across the general population so the young and healthy do not necessarily pay for the old and in ill health. It becomes a shared burden by the populace.

The perverse effect is to have a public plan that only the sick and old opt for and the well off,young and healthy go to the private plans. The tax burden then is on all of us for the former and that may not be popular.

We absolutely MUST have a public plan. MOre and more people will depend upon it...

[jody]

14. Agree. I hope a majority of 435 congresspersons and 100 senators can find a solution that spreads

risk across all citizens and at the same time minimizes waste, fraud, and abuse that exists in programs like Medicare and Medicaid.

[CTyankee]

16. They won't as long as they are owned by the pharmaceutical companies.

That is the problem.

[jody]

19. Agree again. Corporatists finance candidates from both parties and trumpet bipartisan support for

new bills that move us closer toward a corporate state as a president signs those bills flanked by Democrat and Republican leaders from both House and Senate.

Whatever health care plan is implemented, political leaders and msm will proclaim "Hallelujah, Hallelujah, Obama has wrought a miracle" and those who read the fine print and discover corporatist snares and traps will be silenced as naysayers of the worst sort.

I hope for universal health care but, I'm not going to be surprised if We the People get the shaft and We the Corporations get the gold mine.

[zoff]

32. The mechanics of premium calculation should not figure

into whether or not SPHC is valid. The younger and healthier ones should not have to feel aggrieved. It is correct to assume that they MIGHT not need as much care, but there is no guarantee of that either. Who is to say that an extremely healthy 20 yr old will not contract cancer when they turn 40. If premiums are age-based and more importantly NON-DISCRIMINATORY, then in the course of 2 generations, everybody will have paid the same amount.

It's kinda like the homeowners in my condo association who refuse to pay the cost of roof repair of building A because they live in building B,C,D and E.

When we enter into a contract such as SPHC, we need to understand that we are looking out for the good of the WHOLE community.

[madville]

5. I don't get it

You fund universal healthcare with taxes on employer provided health coverage.

When a universal plan is created less employers will offer health coverage because their employees can join the universal plan.

More people join the universal plan, tax revenues on employer provided insurance plummet and the plan fails.

It's like saying you are going to give everyone a free car by taxing the purchase of new cars. Who is going to buy the new car and pay the tax when they are promised a free one already.

[lib2DaBone]

7. I like that..... "A revenue Bind"... rofl.....

Is that like when I go to the doctor and I say: "Doc.. it hurts when I bend my wrist like this?"

The doctor says: "Well then.. don't bend your wrist like that. That will be $100 for the office visit". <drum roll>

Here's a big tip for all polticians in Washington, DC. QUIT SPENDING! QUIT STEALING.

Unless you got money for gas.. GET IN.. SIT DOWN, Buckle your Seat Belt and STFU.

[AllentownJake]

10. If they raise taxes on the middle class by taxing their employer based health care

You will have a Republican Senate, House, and Presidency in January of 2013.

Baucus and Rangel are too busy worried about their campaign contributors than their constituents.

[CTyankee]

13. ...and they must be replaced by people who are more honest and unaffiliated with the big companies.

nt

[Phoebe Loosinhouse]

25. I agree. Mostly because this exact issue was raised in the election and specifically rejected

and ridiculed by Obama. I am sure there are clips out there that would be devastating along the lines of "I voted for it before I voted against it" "Read my lips, no new taxes", etc. It really doesn't matter if the actual plan has merit like Reich appears to be saying, and now that I have read alittle more, I am not prepared to dismiss it as offhandedly as I once was. But I am not Obama and I did not run a race filled with specific stances that are now changing by the day.

The change in stance becomes the issue. Once or twice, understandable. More than that, quicksand.

http://www.nytimes.com/2009/05/24/weekinreview/24stolberg.html
Nuance Is Fine Until It’s a Flip-Flop
By SHERYL GAY STOLBERG
Published: May 23, 2009

[Thothmes]

15. May be an unpopular view

but my opinion is that the only way to support national level single payer health care is to tax the American people for it. Unless I am mistaken, that is how the Europeans, Canadians, Japanese and a whole raft of other countries pay for their national health care programs. The various schemes that I have heard of as far as funding the program are a dodge to avoid telling the citizens that they will be taxed for their health care. I do not see a problem with establishing a progressive tax structure to support the program. Obviously, there are those that will not be able to pay any level of tax because of their income circumstance. There are others, think George Soros, Bill Gates, Ted Turner that will pay more. Taxing the wealth, taxing soda pop, taxing this or that will not pay the freight. We tax to support the Social Security Program, why not establish a reasonable tax structure to support National single payer health care.

[Tansy_Gold]

21. If I'm not mistaken, it could be done THROUGH social security

Social Security/FICA right now is funded through/by two programs, OASDI (Old age, survivors' and disability insurance) and Medicare. I don't know the figures, but what would happen if the Medicare portion were raised by 1% on income (employed, self-employed), 1% to employers, with no cap on income? Or 2%? What percentage now goes to insurance companies?

The sticking point, of course, is the insurance companies, who serve as little more than paper pushers and funnels to skim the premiums off and put that money in the hands of the already idle rich. If everyone is covered by SS/MC, the insurance companies will basically starve to death.

TG

[Thothmes]

22. Agree, collecting the funds to support the single payer

plan could be very easily incorporated into the current medicare tax program. But that program is not progressive, everyone pays the same amount. I would envision a sliding tax scale based on gross income. JMO.

[alarimer]

17. Most people already pay premiums for their health care.

You want to add taxes on top of that? NO FUCKING WAY!

[Thothmes]

23. But if you are going to get rid of the insurance companies

someone has to collect, at least a portion of the premiums once paid to them ,as taxes to pay for a single payer plan.

[bemildred]

24. So it your taxes are less than your premiums were, it's a good deal?

:thumbsup:

[ConcernedCanuk]

18. IN case y'all didn't notice, there's a country north of you that has universal health care

.
.
.

Maybe someone should let the brainiacs in your gubment take a look at our system

REALLY

It ain't no national security secret

We got it!

It works!

[Tansy_Gold]

20. Amen! n/t

[L0oniX]

28. We need a Tommy Douglas here.

[Phred42]

27. As soon as there is a Govt provided publically available plan

most employers will drop their health coverage and tell their employees to do it themselves. There will be a tsunami of Corporates bailing out of private health Insurance

[Tansy_Gold]

33. Exactly. and then we can say good-bye to the health insurance

parasites.

[Tansy_Gold]

34. And apparently some of the parasites are afraid of just that

http://www.truthout.org/052509Y?n

Truthout Original

Blue Cross Millionaires Are Scared to Compete With a Public Plan
Monday 25 May 2009

by: Dean Baker, t r u t h o u t | Perspective

The boys running the show at Blue Cross in North Carolina are running scared. They're worried that President Obama is going to treat them like autoworkers and make them actually compete in the market. The Blue Cross boys think that they belong in the same league as the Wall Street bankers and should just be allowed to collect their multi-million-dollar salaries without being forced to worry about things like competition.

The basic story is that Blue Cross of North Carolina decided to jump the gun on President Obama and Congress and start running television ads telling people how awful a public health care plan would be. According to the ads, people enrolled in the public health care plan wouldn't have a choice of doctors, would face long waiting periods for appointments and procedures and would not even be able to get a clerk to answer questions on billing.

That sounds pretty awful, but if it were true, you have to wonder why Blue Cross of North Carolina is so worried. After all, President Obama is not proposing that anyone would be forced to join a public plan. He just proposed that people have the option to buy into a public plan. Is Blue Cross of North Carolina really that terrified that it will be unable to compete with a public plan that doesn't let patients choose their doctor, subjects them to long waits and doesn't answer questions about billing?

Of course, if the ads being planned by Blue Cross of North Carolina were accurate, then it would not be concerned about a public plan. The reason that Blue Cross of North Carolina is running the ads is that it knows the ads are not true. There is no reason to think that a public plan will offer less choice, require longer waits or provide poorer service than a private plan, like Blue Cross of North Carolina. And there are reasons for believing that a public plan might cost considerably less.

Specifically, the administrative expenses of a public plan like Medicare are far lower than the expenses for Blue Cross of North Carolina. According to its Annual Report, Blue Cross of North Carolina spent almost 15 percent of its premiums on administrative expenses in 2008. That came to more than $1.8 billion. This money would have been enough to cover the costs of insuring almost 600,000 kids through the State Children's Health Insurance Program (SCHIP). Just five years earlier, Blue Cross of North Carolina spent more than 22 percent of premiums on administrative expenses.

By comparison, Medicare spends only about 2 percent of its revenue on administrative expenses. Unlike Blue Cross of North Carolina, Medicare doesn't earn profits and doesn't pay high salaries to its top executives. According to the Raleigh News and Observer, Robert J. Greczyn Jr., the chief executive of Blue Cross of North Carolina, earned $3.2 million in 2007. That's enough to pay for a year's worth of SCHIP for 1,000 kids. Other top executives also drew salaries well in excess of $1 million, a pay range that exceeds the top levels in the public sector by an order of magnitude.

Given the high salaries that Blue Cross of North Carolina pays its top executives and the other administrative expenses that it bears as a result of being a private sector plan with high overhead, it is not surprising that it would be afraid of a public plan. A public plan would likely charge much lower prices, thereby pulling away a large share of Blue Cross of North Carolina's business. Insofar as it was able to hold on to its patients, Blue Cross of North Carolina would probably be forced to lower its prices - slashing its profit margins - in order to be able to compete. This is not a happy picture for any business: fewer customers and lower profit margins.

The answer, of course, is tough love. We just have to tell Blue Cross of North Carolina than it will have to learn to compete. If it can't beat out a public plan in market competition, then the public and the economy would be better served if it went into another line of business.

Bankers may have enough political power that they can milk the government without limits. However, this may not prove to be true for the health insurers. If President Obama continues to push for a public plan, the good folks running Blue Cross of North Carolina and the other insurers may actually have to work for their paychecks.

[WillYourVoteBCounted]

35. If funding was an issue, then why do we fund the Iraq/Afghanistan wars?

those are illegal wars anyway, yet we are going broke to fund them.

Who benefits?