Tuesday, December 14, 2010

Health Care Tax

I admit that I can be a bit dense about some things but I was shocked when I finally figured out about the health care tax. No, I don't mean the Medicare payments. And I don't mean the federal tax general revenue that goes to pay for other health care. That would be simple. However, alone among the developed countries, we in the United States have decided --well I don't remember deciding but I guess someone did--to make health care a market-based service and to rely on employer provided--assisted, at least-- health insurance to finance it. The result is that virtually every time I buy something made in the United States, a portion of the purchase price is used to pay for employee health benefits. No wonder foreign goods are usually less expensive.

Health care is not like, say an automobile. When I buy a car, I buy the car; the rest of you get yours. When health care is provided and paid for, we all pay for it either directly or indirectly through insurance, either ours or that provided to the people who make everything we buy. The point is that health care like education should not be a private economic good but a public service, one that we all pay for directly through the common resources of federal taxes.

This would have at least four advantages. First of all, it would be less expensive because we would take the profit margins of insurance companies out of the equation. Phased in over a three to five year period, this elimination of insurance would reduce health care costs, everything else being equal. Second, the price of goods and services produced in the United States would become less expensive and thus more competitive globally. Third, given the efficiency and effectiveness of Medicare, employers would pay less in taxes than they currently pay in insurance premiums. Likewise the individual would also pay less in federal taxes than they currently do in insurance premiums. Fourth, the rationing of health care--necessary in either approach, would be more humane and responsive. Government health officials responding to well established professional norms and to standards set by political authorities would treat clients more fairly than corporate officials responding to individuals and corporate financial incentives to increase revenue and reduce health care expenditures in order to maximize profits.

No wonder the rest of the world does not follow our approach. They probably cannot understand why we continue with this broken system that only seems to advantage corporate and financial interests rather than serve people. But then why should they care? They are the also advantaged by our blindness. The rest of the world is keeping its eye out for the next world leader since the United States cannot sustain the flawed economic and health policies that seem to be entrenched.

P.S. Oh, yes and if would eliminate the legislative provision that forbids Medicare from negotiating drug prices as the Veterans Administration does, we could immediately save even more.

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