The Popular Way To Pay for Health Care

[waiting for hope]

The Popular Way To Pay for Health Care
by: Chris Bowers
Mon Jul 13, 2009 at 13:24

The emerging Democratic plan to pay for health care reform is through a surtax on Americans making $350,000 a year or more:

Instead, Rangel said Democrats will seek to enact one large tax increase targeting wealthier workers to generate the revenue they need to finance their $1 trillion-plus healthcare reform bill.(...)

There would be different surtax rates, ranging from 1 percent to 3 percent, for workers with annual earnings of $350,000, $500,000 and $1 million, Rangel said. Surtaxes are calculated by adding the relevant percentage to workers' regular yearly tax bill.

Despite the overwhelming, galactic, historic and never before equaled popularity of the "tea party" protests this year, this Democratic plan to pay for health care reform through taxes on the wealthy is an extremely popular public policy route. This is because there really is no constituency for cuts to government spending. A recent poll conducted by Pew showed that spending cuts are a truly fringe position in American politics:

Pew Research Center for the People & the Press survey. June 18-21, 2009. Adults nationwide.
"If you were making up the budget for the federal government this year, would you increase spending for , decrease spending for , or keep spending the same for this?"

Area  Increase  Keep  Same Decrease  Unsure
Education   67%   23%   6%   4% 
Veterans   63%   29%   2%   6% 
Health Care   61%   24%   10%  6% 
Medicare   53%   37%   6%   4% 
Crime   45%   39%  10%   6% 
Unemployment  44%   36%  15%   6% 
Environment   43%   34%  16%   6% 
Energy   41%   35%  15%   6%  
Military   40%   37%  18%   5% 
Science   39%   40%  14%   7% 
Agriculture   35%   41%  12%   13% 
Anti-terrorism   35%   41%  17%   7%  
Intl Aid   26%   33%  34%   7%  

(my note: apologize for the crappy graph reproduction - please see link for better clarity)

Cutting spending is a fringe position, with less than 20% of the country supporting cuts in all major spending areas. While there are not many policy areas where there is a clear majority for raising spending (health care, education, and veteran's being the exceptions), in virtually every spending area there is at least twice as much support for raising government spending as there is for cutting it. This finding is supported by
a somewhat less recent Harris poll from 2007 (more in the extended entry):

When it comes to cutting government spending, there is little support for cutting any substantial programs. Given a list of twelve federal government programs and asked to pick two which should be cut ("if spending had to be cut") space programs top the list by a wide margin (51%). Significant minorities, all under 30 percent, pick welfare programs (28%), defense spending (28%), farm subsidies (24%), environmental programs (16%), homeland security (12%) and transportation (11%). Hardly anyone would cut Medicaid (4%), education (3%), Social Security (2%) or Medicare (1%).

Bottom line: supermajorities oppose spending cuts in all major areas. While some pundits would mock the American public at this point, arguing that they don't like taxes to pay or these services, there actually are two a couple of tax increases the public favors. According to the same Harris poll, increased consumption taxes on alcohol and tobacco is one such route:

The only two taxes on the list shown to those interviewed which would be acceptable to majorities of adults ("if taxes had to be raised") are taxes on cigarettes and beer and alcohol, with 73 percent and 72 percent of adults respectively saying these so called "taxes" should be increased;

~Snip~


More at Link

Thoughts?

[lindisfarne]

1. The rich aren't paying for health care reform through a surtax. They are paying for a portion of the

cost through a surtax based on the amount of income they have remaining after basic needs (food, shelter, clothing) have been met.

"The emerging Democratic plan to pay for health care reform is through a surtax on Americans making $350,000 a year or more."

[Rosa Luxemburg]

2. In the UK it seems to work well?

[waiting for hope]

3. I need to check -

I saw a PBS program on Health Care around the world and it has slipped my mind how the UK surplus' health care funds.

[Rosa Luxemburg]

5. it comes out of your salary I think the rich pay more

also the unemployed, seniors get free prescription otherwise you have to pay a small copay.

[waiting for hope]

9. Thanks!

[imdjh]

4. I was thinking about this today. Our present system turns people into criminals.

Sure, we have Medicaid for some folks, and some programs for kids. The anti-single payer folks like to note that "no one is turned away" from an ER if they need medical care. Here's the problem with that. Even if you are a bum, who clearly has no potential to pay your bill, you are pushed into signing papers saying that you will pay the bill.

Now when I went to school, signing a piece of paper agreeing to pay something that you have no ability to repay or rational intention to repay is fraud. So our present system, requires people to commit fraud to get care that is graciously provided by society as long as it's an emergency.

By the way, I have been admitted to two hospitals after refusing to sign the financial responsibility form. I refuse to sign it because no where in the form does it acknowledge that the hospital and my insurance company have a contract which governs how and when the hospital will be paid. The forms ALL say that if my insurance company doesn't pay, then I will. I am not capable of paying a major hospital bill, so I will not sign the paper.

[Rosa Luxemburg]

7. The key thing is that health care should be free at the point of use

I think it should be taxed from your salary according to how much you earn. Seniors should be free.

[imdjh]

12. I disagree.

I have been a supporter of single payer for a very long time, Medicare for all actually, and I have never said that care should be "free" at POS. Medicare recipients routinely pay co-pays and I have no problem with that. I can even allow for a bit of deterrence, ie a higher co-pay if your visit is deemed unnecessary though I haven't completely thought that one out.

I also disagre with a universal exemption for seniors. I am surrounded by seniors who are better off than younger people.

[Rosa Luxemburg]

16. No seniors deserve free health care after say 65 years old

health care must be free at the point of use. One should be able to just go to the doctor and be seen. NO COPAYS! There should be a great incentive by the government for preventative medicine so that you should not get past the primary stage of healthcare. So many people get farmed off by PCPs to secondaries when they could have dealt with it themselves. I was pleased with the service in WA where the local doctor did almost everything including delivering babies! I am a believer in the family doctor and midwives. Only when you have a very serious condition do you visit places like Johns Hopkins and the Mayo.

[Oregone]

17. Even with Medicare/Medicaid, the elderly pay a massive portion of their income on health care

Frankly thats just wrong. They system is failing them and essentially waiting for them to die or go bankrupt (whatever happens first)

[Rosa Luxemburg]

18. Seniors have served our country well and should be compensated for it

The disabled should have more benefits.

[Oregone]

6. Currently, the poor privately pay 366% to 500% more of their income than the rich on health care

They pay 22% to 35% of their income compare to the upper quintile who pays 6% to 7%.

If health reform doesn't fix this it will not make health care affordable and accessible for all. Over 60% of Americans pay over 10% of their income privately on healthcare

[Rosa Luxemburg]

8. The American public will have to 'weaned' off the present system.

[Oregone]

10. Weaning implies prolonged suffering and a chance of relapse

I prefer cold turkey. Get the private insurers out of primary care, or AT LEAST, remove private/employer funding for basic health plans. A tax funded comprehenisive redistributive subsidy is needed, such that this incredible burden is relieved for 60% of Americans. And I don't mean a subsidy that covers 50% of the cost of a basic plan, but rather, all of it. As long as it is funded via taxes, its a win-win for everyone.

[Rosa Luxemburg]

13. how to get the personnel involved in collection via salary

I guess it would create jobs hiring extra people in the tax department? I loved my time in the UK when they took it out of my salary and I didn't have to worry. No showing insurance cards at the ER. I will never forgive them for the way they treated my husband at the ER. He was a cancer patient and the clinic gave him a drug to prevent the side effects of radiation but he had a severe allergic reaction and went into shock. All the receptionist was worried about was the insurance card and didn't believe there was anything wrong with my husband. I wanted to shove the insurance card dwon her throat!!! When he finally got to be seen by the doctor he said that we were right to get my husband to the clinic ASAP or else he would have died of anaphylactic shock.

[imdjh]

11. Do the math with me on that one.

Let's say that I make $16,000 per year at $8/hr

16000
- 6000 per year rent @ $500/mo. of this $300 is my portion of property tax paid through rent.
10000
-3600 for groceries, no tax
6400

Let's say that I pay 7% sales tax on the entire $6400 remaining. $448 tax

$300 plus $448 = $748/yr in tax.

748/16000 comes out to a bit less than 5% paid in taxes.

[Oregone]

14. I clarified. They pay more privately for health insurance

By quintile, this is the percent of income of private healthcare spending (non-elederly):

1st: 22%
2nd: 17%
3rd: 14%
4th: 10%
5th: 6%


By quintile, this is the percent of income of private healthcare spending (elederly):

1st: 35%
2nd: 22%
3rd: 19%
4th: 13%
5th: 7%

The lower quintile has between $8244 to $5400 in income after health care expenses (This is after a large portion, 66% to 81% is already publicly funded).

Sorry, what I meant to say is private spending on this is burdensome on the poor. The solution is to pay this ALL with a subsidy, based on taxes to eliminate this burden (along side controlling costs, because this method would break the back of the nation in 20 years if costs continue increasing at this rate).

[imdjh]

15. cool

[comtec]

20. Your numbers are way off, you ignored FICA

Lets say you live in some bizarro reality, and you pay no federal or state tax up front (which y uowill, because 16k is high enough to get taxed up front. this does not include city, or county income tax, etc... all in all that 16k's taxes START at 20%, but lets ignore that for now)

you M U S T pay Social Security, that is a flat 8% that you and your employer pay:

$16,000
- 8% = 1280
--------
14,270
- $6,000 Rent @ 500/month (where are you from? that's cheap!)
--------
$8,270
- $3,600 Food
--------
$4,670 --> assuming it's all spent in a state with 7% tax that is $326.90

that is a total Tax paid of:
$1,280 Soc Sec
+ $300
+ $327
-------
$1,907 = 11.9%

Now if you would simply ELIMINATE the top end CEILING for Social Security, you would have all the tax you need for universal health care, retirement payments, etc.

You would probably even have money left over to pay off the National Debt.

Oh and for comparison, Kaiser's BOTTOM END medical is 100/month... that is 1,200 a year for an aspirin and a ruptured pimple

that would leave you only 3470 for THE ENTIRE YEAR to pay for your car (700/Yr if you're a good driver) insurance, your car fuel (lets say double your insurance, you're a very good driver = 1400 <2100>) and clothes (200 you're REALLLLY cheap and thrifty)
That is 2300 dollar, that does NOT include, phone, internet, electrics for your home, etc.
Those (now im being stupid cheap) will be at MINIMUM $500, probably are goign to be 2-3x that.

So now you have 2800 in required expenses.
That leaves you $670 dollars for luxuries FOR THE ENTIRE YEAR

Let me say that again for the fucking idiot libertarians in the audience...

YOU ONLY HAVE $670 DOLLARS FOR THE ENTIRE FUCKING YEAR TO RELAX WITH AND THAT IS PAYING FOR BOTTOM END CRAP MEDICAL!

This whole "oh you can pay sales tax" bullshit is just that!

I've been poor in American my ENTIRE adult life.
so don't tell me my numbers are off.
if anything they're TOO FUCKING LOW!!!

The stark reality is that someone who is making 8/hr IS destitute!
because MANDATORY costs are much much higher, the amount of money they have for anything else is very close to ZERO!
Any children in that family are going to hoover any money that might be left over.

UNIVERSAL IS THE ONLY WAY TO GO, and you MUST tax the rich!

"It is the responsibility of the powerful is to protect the weak" - code of Hamurabi, oldest known written law.

[imdjh]

21. You missed the change and let's talk about poverty snobbery.

The post I was responding to was changed for clarification.

A recurring thing whenever we hash out numbers on these topics features a poster backhandedly bragging about how expensive it is to be poor where he chooses to live.

$6,000 Rent @ 500/month (where are you from? that's cheap!)

I live in Florida, one of some 49 or possibly 50 states where one can find basic housing for about $500 a month for himself in a shared dwelling, and one of many states where one can find a nonshared home of some sort for $500 per month. Living in expensive places which make you poor or keep you poor, is a trade-off many people (including myself in the past) choose, but it is not the standard for true poverty.


That is 2300 dollar, that does NOT include, phone, internet, electrics for your home, etc.
Those (now im being stupid cheap) will be at MINIMUM $500, probably are goign to be 2-3x that.

.......................

The stark reality is that someone who is making 8/hr IS destitute!

Destitute people do not live in rent controlled or subsidized units with AC , cable, internet, and bus service at their door. Destitute people live off a country road in a 1970 single wide with a tarp on the roof and which may or may not have a functioning water heater. Destitute people live in a semi-converted garage in Tampa and ride a bicycle back and forth to day labor sites. Destitute people do not brag about how much rent they pay while traveling abroad.

By an income standard I am technically poor. By an asset standard, probably not. But I certainly wouldn't consider myself in the same situation with even a person who has the same income as I do, but does not have the same resources and choices I have. I could dramatically improve my cash situation by hanging up independence and moving in with relatives. I never confuse being broke with being poor. I have been broke most of my adult life, but I have never been truly poor, even when I had no money for bus fare.

[stray cat]

19. I think everyone should play so everyone should pay - its easy to spend others money

I think the taxes on the wealthy should be increased - but all should sacrifice for benefits.

[imdjh]

22. Precisely. I bow before your temple.

"Tax the rich." seems to be some folks answer to everything. I always thought that the vision was everyone working and everyone paying according to ability. That will mean that the "rich" will automatically pay more even if they are paying the same percentage. Until I joined DU, I thought we were all pretty much on the same page that a legitimate goal was to tax "the rich" in a way that they actually pay the same percentage as, say, the half-rich or the quarter rich instead of loopholing out to a lower percentage. I didn't know that the goal was for them to pay the whole thing. That would appear to play into Republican hands on the nature of work and incentive.

Years ago, I knew a woman who was eligible for full welfare benefits as the mother of a small child. One day when she was just running on about life and work, she mentioned why she works. "I want to be able to say, 'I'm a taxpayer, now fix that fucking hole in the road.'" I admire her.