Saturday, March 27, 2010

Is Health Care Reform a "Big F*#king Deal"? PART 3

Alright, so I have laid out the main problems with health care and health insurance. So what are the potential solutions and what is in the recent health care reform bill?

Well, first let's take the third problem that was just discussed in Part 2. One potential remedy to any problem related to the federal budget is to raise revenue (i.e., through tax increases). This is the stereotypical "liberal" response to most federal budget issues. Just raise taxes on the rich and we'll be able to pay for our government-subsidized health insurance programs. Some may even go as far as to advocate for expanding our government health insurance program to everyone by having a "public option" that people could enroll in. The logic here is that we'll just be able to tax the rich more so that all of us (even the poor that may not be able to pay into a government insurance program) can have subsidized government health insurance.

Now, I am pretty sympathetic to the idea of increasing the tax rate for the super rich mainly because the gap between rich and poor has widened so dramatically in the last few decades (see the figure above from this great report from the Center on Budget and Policy Priorities). Just look at that figure. It's staggering. I consider myself very much on the capitalist side of things (incentives are critical to our society) but there is something really, really wrong when the rich-poor gap expands that dramatically. It's impossible to "prove", but I just cannot imagine that those at the top 1% of household income really "deserved" that much of an increase in their incomes. For example, look at CEOs of the big banks and their huge bonuses right in the middle of a crisis largely caused by their mistakes (more on that later, for sure). I know that may sound a little fishy to the die-hard capitalists It's just staggering.

But with all of that in mind, increasing taxes on the rich only gets us partially to the point where we could possibly have a sustainable universal health care system (heavily dependent on government subsidies) implemented on top of the current health care structure of the country. So I would argue that just raising taxes on the rich and implementing a public option (plus expanding subsidized health insurance programs such as Medicaid) is a very dangerous position to take for two reasons: 1) just mindlessly raising taxes to solve a fiscal problem can definitely qualify as an attack on individual liberty (one of the non-negotiable principles of this country as I addressed here) and 2) it does nothing to address the other side of the potential solutions...reducing the costs of health care.

The reason that universal health care with government subsidies in other developed countries work so well on a national scale (higher life expectancies, lower child mortality rates relative to the U.S.) and are largely sustainable (Germany has had universal health care since 1883) is that the costs of health care (regardless of who is paying for it; the government or an individual) are much lower compared to the U.S. (and again, that is mostly due to the idea that brand new and expensive medical technologies and drugs are not pushed so much and health care professionals are not paid as much in those other countries). So if people truly want to advocate for expanding the role of the U.S. government in supporting health insurance to all, they would also need to advocate for dramatically changing our health care system. And there are enormous obstacles that face that the power of the pharmaceutical and hospital industries, for instance.

In addition, we would definitely need to expand the scope of what we consider as "health care" in this country to include things like food policy, which I and many others would argue is a vital part to the health and wellness of a country's population. (This is a whole other subject that I will probably address in a later post).

So I am sympathetic to the idea of increasing access to health insurance through government means but we also must absolutely address, and address with great determination, the growing costs of health care and also the food policies that make us less healthy.

Okay, so that's a big part of the potential solutions. What about other ideas?

In Part 4, I will talk about increasing regulations on health care and health insurance to reduce costs and maybe finally get to the new bill.


  1. Booth, thanks for all the information. It is helpful. These topics can seem so big that it is difficult to even get started on trying to understand it. My main motivation for pushing you to write this blog was so you could help me understand my world. I am sorry for being selfish but I think its a win win. Ok on to Medicare. The following comments will show how ignorant I am on these things, but if not now then when? Is Medicare something we automatically pay into when we have a job such as mine? Or is that something we have to agree to. The easy way to answer this would most likely be to look at a pay stub but I do not have one handy. Is Medicare an alternative to paying for insurance privately, perhaps more affordable? Or is it something that is just for when we are older? Is it mandatory to pay into it? Keep the posts coming.

  2. Welcome to the discussion.

    So, automatically are paying into Medicare as a part of the FICA tax that you see on your paycheck. The other part of the FICA tax is for Social Security. You have no choice in paying this tax if you get a paycheck. The idea with Medicare is that everyone pays into it over their working life and then they have health insurance for their retirement.

  3. Great Posts Eric. My company has definately benefited from hospitals getting the "latest and greatest" technology every 2 years, hence the boom times of the mid to early 2000's. Not so much anymore, but thats something they should have saw coming. Yes Kevin, we are all pay medicare/medicaid/social security with every paycheck yet no gaurantee these programs will even be around when we are old. Kinda frustratng.