HR 676
I'm hearing some rumblings in my little blog world about supporting HR 676. Let me just say that I think universal health care is inevitable, and is needed. However, having said that, the transition is going to be very, very painful.
Total health care costs in the United States are running at $2 trillion per year. HR 676 proposes that this sum be paid for in the following manner:
(1) by vastly reducing paperwork; (2) by requiring a rational bulk procurement of medications; (3) from existing sources of Government revenues for health care; (4) by increasing personal income taxes on the top five percent income earners; (5) by instituting a modest payroll tax; and (6) by instituting a small tax on stock and bond transactions.
Ok, point (1) is a good one. Administrative costs may account for $500 billion so we could easily save $200 billion a year there. That would be great, but let's keep in mind that those costs would be largely saved by reducing the workforce in health care administration.
Point (2) is also a good one. Drug prices are outpacing even skyrocketing medical costs, and need to be reigned in. How much can actually be saved with this approach? That is anyone's guess, but let's be generous and say another $200 billion.
Point (3) is logical enough. The Government currently spends nearly $700 billion on health care (or $2,360 per person).
So the first three points are all logical and painless (unless you work for a hospital administrative unit or a pharmaceutical company). The next three involve some pain. We have to figure that despite the savings in drugs and administration, we are going to be facing at least another $1 trillion per year that is currently unfunded. So where will it come from?
Point (4) talks about raising taxes on the top 5% of wage earners. Since there are currently 146 million working men and women in the U.S., the top 5% represents about 7.3 million people who make on average about $260,000. If these 7.3 million people had their taxes raised by 10% (which is a lot) that would generate nearly $200 billion.
Ok, only $800 billion to go, and we are there.
Point (5) talks about a "modest payroll tax" being added. Now, I'm going to ignore point (6) for now because for one, it is a stupid idea which probably will backfire, and for two, it probably isn't going to raise that much money. Clearly, the bulk of the added resources will have to come from this "modest paroll tax." And what will this modest payroll tax be? Well, $800 billion divided by 146,000,000 (yeah, that top 5% who is already paying an additional $26,000 a year will have to pay it too) is.......
$5,479.45
I have been very kind in my calculations. I can't imagine that the top 5% is going to pay an additional $30,000 per year without a fight, and a lot of people are not going to be able to pay that amount, so the burden will have to be shifted up. Also, although the first two points will help to control the growth in health care costs, they are still going to grow. Also, don't forget that all those people who lose their jobs in the administrative industry are not going to be employed.
One final thought... what about all the people (like my sister, for example whose family pays nearly $1,000/month for insurance) who earn their living through investments such as real estate? I guess they get to shift the burden of their insurance on to the American worker? That is a HUGE whole in this plan.
Like I said, I think universal health care is a must, but HR 676 falls well short of providing it in any kind of sane or equitable manner.
Total health care costs in the United States are running at $2 trillion per year. HR 676 proposes that this sum be paid for in the following manner:
(1) by vastly reducing paperwork; (2) by requiring a rational bulk procurement of medications; (3) from existing sources of Government revenues for health care; (4) by increasing personal income taxes on the top five percent income earners; (5) by instituting a modest payroll tax; and (6) by instituting a small tax on stock and bond transactions.
Ok, point (1) is a good one. Administrative costs may account for $500 billion so we could easily save $200 billion a year there. That would be great, but let's keep in mind that those costs would be largely saved by reducing the workforce in health care administration.
Point (2) is also a good one. Drug prices are outpacing even skyrocketing medical costs, and need to be reigned in. How much can actually be saved with this approach? That is anyone's guess, but let's be generous and say another $200 billion.
Point (3) is logical enough. The Government currently spends nearly $700 billion on health care (or $2,360 per person).
So the first three points are all logical and painless (unless you work for a hospital administrative unit or a pharmaceutical company). The next three involve some pain. We have to figure that despite the savings in drugs and administration, we are going to be facing at least another $1 trillion per year that is currently unfunded. So where will it come from?
Point (4) talks about raising taxes on the top 5% of wage earners. Since there are currently 146 million working men and women in the U.S., the top 5% represents about 7.3 million people who make on average about $260,000. If these 7.3 million people had their taxes raised by 10% (which is a lot) that would generate nearly $200 billion.
Ok, only $800 billion to go, and we are there.
Point (5) talks about a "modest payroll tax" being added. Now, I'm going to ignore point (6) for now because for one, it is a stupid idea which probably will backfire, and for two, it probably isn't going to raise that much money. Clearly, the bulk of the added resources will have to come from this "modest paroll tax." And what will this modest payroll tax be? Well, $800 billion divided by 146,000,000 (yeah, that top 5% who is already paying an additional $26,000 a year will have to pay it too) is.......
$5,479.45
I have been very kind in my calculations. I can't imagine that the top 5% is going to pay an additional $30,000 per year without a fight, and a lot of people are not going to be able to pay that amount, so the burden will have to be shifted up. Also, although the first two points will help to control the growth in health care costs, they are still going to grow. Also, don't forget that all those people who lose their jobs in the administrative industry are not going to be employed.
One final thought... what about all the people (like my sister, for example whose family pays nearly $1,000/month for insurance) who earn their living through investments such as real estate? I guess they get to shift the burden of their insurance on to the American worker? That is a HUGE whole in this plan.
Like I said, I think universal health care is a must, but HR 676 falls well short of providing it in any kind of sane or equitable manner.
Labels: health care, HR 676
posted by Praguetwin at
4:07 PM
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7 comments
