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Paying for Health Care June 10, 2009

Posted by Kate Ryan in Democrats, Economy, Health Care, National Politics, Republicans.
Tags: , , , , , , , ,

health_costsSenate Democrats unveiled a health care reform proposal yesterday that would mandate all Americans buy coverage, provide help paying for lower-income citizens, prohibit insurance companies from denying care based on pre-existing medical conditions – or charging higher premiums because of them, and allow choice in selection of coverage.  What the plan does not include is a public option.

Connecticut Senator Chris Dodd, who has taken the lead role on reform in the absence of Senator Edward Kennnedy, said “This does not symbolize the end of the game or even the end of the first quarter,” Dodd said. “We still have a lot of work ahead of us and are looking forward to working with our colleagues on a bipartisan basis to resolve the remaining issues and move forward with a mark-up of this legislation next.”  Dodd further explained that the lack of a public option was a “gesture” to Republicans who oppose it.

Do the Dems remember why they were elected?  Over 60% of Americans want to see some sort of public health plan included in any reform proposal – and they don’t give a hoot what Senate Republicans think.  Let’s face it, the failure to include a public option is a gesture to the insurance companies who have purchased Senate Democrats in equal numbers.  There has been a united chorus of wailing and tooth-gnashing over the “creation of a massive new bureaucracy” and the lack of funds to pay for it.

Do they think we are ALL idiots?  The government already maintains several public health plans – the largest of which is Medicare (the others are the VA and Indian Health Services).  Currently, Medicare is he primary health insurer for persons over 65 and the disabled.  Most public option plans include a Medicare “buy-in” for younger Americans.  The argument against this is cost – current CBO estimates show that Medicare will run out of funds in 2017.

But is the argument realistic?  Medicare part A – that covers doctor’s visits and outpatient procedures – costs about $237 billion per year, 85% of which is covered by payroll taxes.  Part B, hospitalization and catastrophic care, is paid mostly through general tax revenue (73%) as is Part D, the prescription drug plan (77%).  The total cost of Medicare is about $499 billion per year, 40% (in total) covered by payroll taxes.  The current payroll tax rate is 1.45%.  This is not limited by income – as is Social Security – and is matched by employers.  Raising the Medicare payroll tax would go a long way toward covering the uninsured as well as guaranteeing Medicare solvency.

Medicare revenues would go up by about $250 billion for each 1.5% the tax is raised.  Doubling the tax (2.9% on workers and 2.9% on employers) would result in revenue of  almost $500 billion – enough to cover the entire current cost of Medicare.  Including premiums of $100 per month per family or $50 per month per individual would result in an approximate $25 billion to cover any yearly expansion.  But what would this mean to the average American making the average salary of $800 per week?

If you are working and uninsured, the increase would cost you an additional $12 per week.  Including his premium, the monthly cost for health care for a single worker would be $98.  For a worker with a family, assuming two adult wage earners, the monthly cost for insurance would be $196.   In 2007, the average cost of an individual employer-paid plan was about $308 per month; for families the cost was $824 per month.  Increasing the Medicare tax would save the individual and his employer 76% on a family plan.  Good for the individual and good for business.

The other part of the equation is controlling costs.  Enrolling younger and healthier people into Medicare will reduce the overall cost of services provided per person.  Negotiating drug prices and permitting pharmaceutical re-importation will reduce the cost of prescription drugs.  Focusing heavier reimbursements on preventative care and providing payment for health-improvement activities will reduce the need for more expensive procedures.  Allowing the fast-track approval of medical procedures performed in other countries can provide doctors options other than expensive surgery.  Merely digitizing medical records can save over $1 billion per year.

A public option can be a reality if the will exists to make it so.  It seems as though our government can find money to conduct two bullshit wars just because.  Unfortunately, Congress has been bought and paid for by the health insurance industry that sees the public option as a death-knell to its for-profit business model.  But the industry did this to themselves.  After years of double-digit increases, denial of payment and care, and bringing American workers to their knees – they deserve everything that’s coming.  Either change or go out of business.



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