Paying for Healthcare

New taxes are not really appealing to Republicans, but the government must somehow figure out ways to cover the increasing costs of healthcare, both within the government’s budget and in the country. The number one contributor to healthcare costs in this country is obesity. People eat too much.

We already tax cigarettes and alcohol, two other major contributors to health problems, and perhaps we can do more in that area, but dealing with obesity has to be a new focus.

The idea is basic. Those who drive healthcare costs up, pay more for it. Insurance companies have recognized this for years.

What if we imposed a tax on the calorie content of foods as they pass from the distributor/wholesaler to the final retailer? At first the tax would be relatively low, but would be enough to make sugared sodas more expensive than diet soda. High calorie snacks and candy would increase in price as well. If people just begin to think twice about buying junk food, that will begin to help.

Each year the percentage tax increases in an amount announced in advance. This will allow food producers to figure out ways to reduce the calories in their products before the higher tax goes into effect. The result will be that, due to American genius, people will get the same things they’ve always gotten for around the same price, the tax will bring in about the same amount each year, and calorie intake by Americans will decrease. As a result, obesity should decrease. Perhaps, if people aren’t so overweight, they might just get a bit more exercise, but we all know we can never make people get off their butts if they don’t want to.

Rates of illnesses effected by high calorie intake, like diabetes, should improve. Healthcare needs should go down, improving overall costs of care. Add in higher taxes on tobacco and alcohol, perhaps eventually a similar graduated tax addressing the elimination of or increase in other healthcare drivers, and over time the US will become a healthier population, eating tasty, healthier food, that can still be “junk-like.”

It would be easy to put in place and administer. All products now must include calorie counts on the label. Vegetables have low calorie counts naturally, and so will remain comparatively inexpensive. Fruits and vegetables could be exempted entirely, fresh, frozen and canned, so long as there are no additives. Meat producers will work to create leaner beef, pork and poultry.

Make America Great Again, but help make them healthier to reduce the burden of obesity on our systems. The proceeds of the tax can help to cover the costs associated with Obamacare or whatever healthcare bill the government creates down the line.

Thoughts on Health Coverage

I recently read a great article by the Brookings Institute on the tweaks that could be made to the Affordable Care Act (ACA), aka Obamacare, to bring it within the realities of the needs of the country, to fix its basic functional issues and to put it into the realm of acceptability for Republicans. These perceived fixes center around removing or weakening the mandates and giving States more freedom to address the issues, especially with regard to the expansion of Medicaid in the ACA.

One of the issues that seemed to exist underneath the article and within the debate as I have heard it, relates to the costs of serious, long-term catastrophic illness or injury. People who will be treated for the rest of their lives. Some of these people have pre-existing conditions that insurance companies have un-wittingly taken on, forever, under the new ACA rules.

The government has many different healthcare provisions and departments. There are the obvious ones, Medicare, Medicaid, Social Security Disability, and the Veterans Administration, which includes actual care in government-owned hospitals. The government also provides health insurance to all federal workers, including Congress. At the State level, there is worker’s compensation insurance, and State-by-State licensing and regulation of health insurance companies, hospital and physician organizations, the administration of Medicaid, and the provision of other health-related services.

Would it make sense to roll everything into one federal plan? Take the States out of it entirely. One oversight body; the Department of Health and Human Services would make sense. Create one unified plan that applies to everyone.

To reduce the costs associated with health insurance, the government could agree to cover and care for any patient whose healthcare costs exceed some minimum, say $200,000, in a year or $500,000 in the person’s lifetime.

Anyone whose cost of care exceeds the thresholds would be treated by federal doctors and medical personnel in federal hospitals and other facilities to the extent available, or the federal government would pay for their care in private facilities as required.

Federal doctors, staff and hospitals, would be immune from any form of medical malpractice lawsuits, though they could be disciplined to the point of being stripped of their duties and right to practice if appropriate negligence is found. This would reduce the costs associated with carrying insurance. The patient is already in a long-term care scenario and is being cared for by the government for free, so compensatory damages would be covered.

The federal employees’ insurance plan could be offered to any American who wants to buy in. The government’s plan could rely heavily on treatment by government doctors at government facilities, so there would be a lot of room for other private carriers to provide more private care options. The government, however, with its already existing buying power, added to by new insureds, should negotiate long and hard with healthcare providers on costs of care, prescription drug companies on the costs of medications, and with anyone else involved in the healthcare industry. Private insurers could piggy back on the government’s deals, if they desired.

In the end, insurers need only cover costs up to a certain limit, reducing their exposure on all insureds, and only those patients they want to cover. The government plan would handle all others, and everyone would have to buy into something. The government’s insurance plan would cover those on Social Security Disability, Veterans, Medicaid and Medicare, for whom we already have a means of payment. My thoughts on a calorie tax in a prior post could help pay for these services. The poor, the disabled and the old, tend to be the people insurance companies do not want. Mix them into the huge federal workers’ health insurance program, and the costs should be easily absorbed.

One overall program covering as many people as possible, offering high quality catastrophic coverage, paid for by those receiving it, with private coverage for anyone who wants it and everyone the private carriers don’t want. Everyone is covered. Everyone wins.

No Tax Deduction for Donations that go Outside the US

The United States provides a tax deduction for qualified charitable giving. A decent percentage of this money, well into the tens of billions, is sent outside the country. I am certain these are very good causes, but the core question is:

Should the United States government subsidize monies spent to help out non-US residents when there is so much need here?

I propose that the US change its tax code so that qualified charitable giving must be made to entities who commit to focusing all of their efforts within the United States. Entities, like the Red Cross and the United Way, that do both, would have to create a separate group for their international funding efforts. It does not mean that people who care deeply about the starving people in east Africa should not support entities that help in those areas. It just means their donations to that entity will not come with a corresponding US federal tax deduction.   

Americans donated over $370 billion dollars to charities in 2015. That is up from just under $360 billion in 2014. Both were all-time records in inflation adjusted dollars, according to Charity Navigator. Perhaps someone is a better researcher than I, but I could not find a clear statistic that indicates how much of this money is sent outside of the United States. From anecdotal evidence, based on the largest charities and where they say they spend their money, the percentage is significant.

If the amount of money donated that leaves the US is about 25% of the total, that is over $90 billion dollars. Assuming those who give this money pay one-third of their income in taxes, that is over $30 billion dollars that the US is paying toward helping non-US residents, while US residents are struggling.

Consider the number of jobs that will be created and the number of people who are struggling in this country who will be helped if nearly all of the $370 billion donated to charities in this country stayed here to help US residents? $90 billion dollars could create 2.25 million new $40,000/year jobs in the US. Of course, some jobs exist in the US now to administer that money, but no matter how you slice it, an infusion of $90 billion would significantly help those benefited by charities in the US economy.

We can assume that giving will continue to increase, so the government will not reduce its deficit by the $30 billion, but it will be using that money to subsidize benefits to US residents, which creates a multiplied benefit to the US economy as they buy goods and services, pay for housing and move off of federal benefits.

President Trump told the world, and those living in difficult conditions, that he would change the way we took care of them. He promised to focus on building and protecting the US first. Significantly increasing the amount of charitable money that stays in the United States would go a long way toward rectifying the plight of many in the US. Both the Democrats and Republicans should support this move.