Why reform will cause you to lose your Health Insurance
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I just
jotted down a couple numbers regarding how the proposed health care reform legislation would
affect people keeping their existing insurance… And the numbers look like there's going to be millions of Americans losing their private health care insurance... It also doesn't look like it's too difficult to tell which end of the economic scale the most people losing their existing coverage will be.
There’s several ways President Obama has proposed paying for health care reform. One is a 5% surtax on the "rich", (he describes as people making more than $250,000 a year). While this might cause some of these rich folks to try dodging other taxes a little harder, it doesn't sound like the 5% surtax will cause me to lose my existing insurance coverage.
It's another element of reforms revenue raising arms that will wipe out many peoples coverage, the 8% payroll tax per employee for employers who DON’T provide insurance. And the key words in that sentence are "who don't provide insurance".
For those companies, the government insurance plans total charge for a $20,000 per year employee is only $1600, for a years worth of health insurance. For a $40,000 per year employee, the cost is only $3200, per year. As those buying their own health insurance know, this is far cheaper than the cost of today's private health insurance.
Keep in mind that this does not mean the government health insurance plans real costs are only $1600/year… (Of course a year of health insurance doesn’t cost just $1600, check the deduction from your paycheck, and multiply it out to a year!)
The rest of the real cost will have to be paid by the
government… Perhaps that's what the 5% surtax on the rich is supposed to pay for.... But consider the drastic effect of having this super cheap, taxpayer subsidized government insurance.
Many small businessmen (and even some big, low price businesses like wal-mart) running a low to middle wage shop would drop any private insurance they have, and of course take the cheaper (taxpayer subsidized) option. Before long, millions of people in jobs earning $60,000 a year and lower would lose their existing insurance.
It isn’t until you get to a $100,000 average employee salary that keeping private insurance, instead of taking the government (taxpayer subsidized) plan, becomes a clear choice (at that point the government plan costs $8,000/employee, and you can get private insurance family packages cheaper than that).
So the way our politicians have set up "reform" is clearly going to cause millions of us to lose our existing health insurance coverage… And this loss will not be by our own choice. That decision will be made by the accountants and bosses, who take the obvious way to save a ton of cash, perhaps even millions for some larger companies (which means even more millions out of taxpayers pockets).
President Obama says - “You won’t lose your existing coverage.”
I say, "Either he's really bad at business and math, or he must have inhaled, a lot."
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PS: The effect of this 8% payroll tax will be far greater than just causing you to lose your health insurance. It might cost you your job as well. Consider:
Businesses within the United States now compete globally in virtually all product categories, from agriculture and manufacturing, to computers and aerospace design. While requiring health insurance (or pay an additional 8% tax) might have little effect on an aerospace design firm (given it's likely they already provide health insurance), the impact on lower wage, higher competition markets could be drastic.
Both the manufacturing and agriculture sectors within the United States operate on razor thin profit margins. In agriculture, US farmers have been increasingly driven out of business due to increased competition (read as "lower prices") from South America. The effect of increasing their prices another 8% will push many over the edge.
As the price of US grown apples, broccoli, tomatoes, and other fruits and vegetables rise, the retail stores (to remain competitive with other retail stores) will purchase the cheaper goods (after all, a South American tomato tastes just the same as a North American tomato). US consumers, well trained in saving money and fostering capitalism, will seek out the lower cost goods. And many US farms, unable to compete with the lower cost produce, will wither and die.
The financial situation for many manufacturing firms is similar. Being relatively low skilled, many of these jobs (manufacturing things like automobiles and parts, furniture, sneakers, or electronics) have already gone overseas (to Asia, in this case). And again, adding 8% to the cost of manufacturing products within the US will be enough to push many more companies over the edge.
President Obama says - “You won’t lose your existing coverage.”
And again I say, "Either he's really bad at business and math, or he must have inhaled, a lot."
CommentsLoading...
Good hub - I agree - and it may START at 8%, just like the income tax started at 1% for "only the rich". Once they get it in there they can destroy small business at will. Very scary.
And just as an aside - South American veggies aren't as good as ours. The sooner you get a veggie from it's harvest date the better it tastes. I recommend supporting your local farmers markets (ok, yeah, I work there). Not only do they taste better, you are supporting your local economy - and small business :)
I think when Obama says, "You won't lose your healthcare." He is speaking about the immediate future. Socialized medicine is intended to replace healthcare. There are huge problems with socialized medicine, just as there are huge problems with private healthcare plans. I have lived in countries with socialized medicine, by and large it works well for most people. It will be expensive (increased taxes) but the costs from the private sector businesses will be reduced, as they no longer pay for private health care. In the long run, it will all balance out I believe with all of us paying increased income taxes.
Thanks for the comment construction hero, but I disagree on it all balancing out.
It seems to me that we'll lose yet more manufacturing jobs, yet more agricultural jobs, and despite what the President says, even our existing health insurance.
Worse yet, with capitalism gone from health care, the US health care industry will lose it's capitalistic drive for innovation and service. This likely means longer lines, gruff personnel, and less "breakthroughs", or miracle cures (after all, there's no profit in it).
Without real capitalism, real competition, I see my doctors office turning into the Post Office, or even worse, the DMV - stagnant, crowded, and unresponsive.
And while at the DMV, I've often thought "I'll probably die here waiting for my turn." In the not too distant future, that same level of service might be waiting for me at my Doctors Office.
I beg to differ on several counts. There will be significant improvement in US competitiveness, rather than worsening, under a national healthcare program. Right now, GM, Ford and Chrysler are paying about $1,600 per car in health care costs. How much more competitive would they have been over the past ten years or so without carrying the entire burden of health care cost?
As it is now, those without healthcare insurance wait until they are so sick that they must visit the emergency room to get care. The ER is absolutely the most expensive care available, so the hospital is forced to spread the cost of non reimbursed emergency care into overhead paid by every covered patient. National healthcare eliminates the need to wait that long, easing the pressure on the ER and lowering individual costs per year.
I've talked with Brits, Canadians and Swedes about their health care systems, and all of them have said that they are quite satisfied. The Swedes especially raved about the availability and high quality of care. They pay high income taxes and don't care because, to them, the payback is real and quite visible. The "rationing" complaints seem to come from those who want immediate service for quite minor complaints or even elective and cosmetic surgery.
frankbb, instead of GM paying for the $1600/car employee health care costs, you and I paying for it is better?
Regarding people without insurance going to the emergency room, and you and I paying for it... Just giving it to them "free" is somehow better? The same logic could be used regarding bank robbers - Let's just mail them the money, it'll save all the trouble, and all work out the same, right?
And the Swedes? They were "happy" in WWII, maybe we should have followed their lead there too? Just because the swedes like something doesn't mean it's good for Americans...
50% of all medical discoveries come from the US (not sweden)... Medical discoveries have been fueled by capitalistic market forces - not by government mandates - and those market forces are being pushed aside in favor of "universal coverage" (and taxation) it would seem.
You and I paying for it is much better. It's about time that America enters the 21st century and initiates a national healthcare plan. EVERY other industrialized country has this.
EVERY other country, it seems, values it's citizens more highly than than the US does. Basic healthcare is considered an essential right. I concur.
Yes, we should all pay for a national healthcare plan. If it requires a tax increase, I for one will gladly pay it. And if it takes the US 20 years to get the plan right, so be it. It's really not that hard and shouldn't take that long. As an American, I value the health and well being of every other citizen sufficiently to contribute to paying for it.
Your comment about Sweden is simply ludicrous. Name calling, argument ad hominum. A good healthcare program is a good program. The fact that the Swedes have long held the health of their citizens to be a national goal and individual value is worth examining closely.
Finally, those capitalist market forces you're talking about currently control your healthcare options very closely and they - insurance companies, drug companies, and the big hospital chains - are all for profit organizations making those decisions about your health with a view towards their profit, not your health.
The evidence for this is very clear - America spends twice as much as any other country, per capita, yet we have a short lifespan, high infant death rate, high death before age 5 rate, and are at the bottom of a number of other basic health measurements. All those discoveries don't seem to be helping much, do they?
frank, your basically saying that if all your friends are taking drugs, then it's ok for you to take drugs too. Call that ad hominum if you like, but it's what you've been saying.
Regarding our life span/death rates - because we're rich, we have rich lifestyle choices... We're overweight and lazy - often called "fat and rich". Fat and lazy people die younger than skinny and active people.
Our obesity trumps our superior healthcare, to a large extent.
In a way, perhaps you're right - by passing universal healthcare people will have a LOT less money in their pockets to buy big american cars and fat big macs.... Perhaps by having to ride bikes to work, chop wood to heat our homes, and having to eat celery for lunch (because we're broke paying for GM's and others health care), we'll all get skinnier.
Diabetes and heart attack rates could plummet. Plenty of studies have been done showing the extended lifespan of skinny people - perhaps universal heath care is the way to make that happen.
What I am saying is that the type of system that has proven to be significantly more effective in countries around the world would have the same benefits in the US.
Actually, the US healthcare system as currently structured, does have all your friends taking drugs, many of which they don't need, and which kill thousands of Americans annually.
Studies have shown that once a patient is taking 5 or more prescriptions, there is a 100% probability of adverse interaction. There are tens of thousands of Americans taking at least that many prescriptions, some of them to alleviate symptoms of other drugs. Eliminating just some of the over prescribed drugs will largely pay for the health care system you are so afraid of.
Your arguments all seem to center around the notion that you should keep more of your money to the detriment of the country that made your earnings possible. In fact, the current system is costing us twice what it should.
And you are paying for healthcare anyway, except in higher prices for specific goods, rather than in taxes. And it's costing you a fortune.
Wow.
First off; you say 5 or more drugs, "100% probability of adverse interaction". I find it 99.99% unlikely your absolutism is true. There is not a single person in America taking 5 drugs that aren't adversely interacting?? Unbelievable; there would be virtually no elderly people left.
Regarding what my arguments center around, they center around 2 notions. First, "give a person a fish, and your feed him for a day. Teach a man to fish, and you feed him for life." I'm not looking forward to paying for those who choose not to purchase insurance, for the rest of my life.
Second, I've seen a lot of government waste (ie: DMV, Post Office, Veterans Administration, Social Security, and especially Medicare and Medicaid), and so I don't believe our government is acting in our best interests.
So, let's not lose sight of the fact that we're talking about putting everyones healthcare under the control of the folks that brought us Social Security, Medicare and Medicaid - (it seems like sheer lunacy to me).
With that, let's continue this discussion on frankbb's page.
Anyone interested in debating this (and frank seems keen on it), let's head over to his pages, he's setting up a few hubs for discussions.
![How Has President Obama Done In His Last Three Years So Far? (Hub Poll: 50%-Pass, 38%-Fail) 3-9-12 [39*-42]](http://s2.hubimg.com/u/4465029_50.jpg "How Has President Obama Done In His Last Three Years So Far? (Hub Poll: 50%-Pass, 38%-Fail) 3-9-12 [39*-42]")
jiberish 2 years ago
I say both.. I used to think he was clueless, but now I'm sure he knows exactly what he's doing. He cares not of the people, he has no idea what in the bills he passes, he is a visionary just like Hitler.