Saturday, August 1, 2009

Health Insurance.

A touchy and complicated subject, why would you want to even go there David? Maybe because I have a new idea! At least I have never heard any one bring this up.
First, lets cover the main points real fast. When I was in business for myself and raking in the princely sum of $50,000 a year - most years - for working 60 to 80 hours and 6 days per week, I was paying $1,000 a month for health insurance for my wife and myself. That amounted to 24% of our income (and doesn't include the deductibles, for doctor and hospital and medicines. So it was actually more than 24% of our income.) Now that we are retired we pay $96 Medicare and $32 for drug coverage each - $128 a month each. That comes out of my wife's SS of $660 - so that's 19% of her income, and $128 out of my $1700 is about 8% of my income. Again it does not include deductibles on Dr. Hosp. and Rx. So the lowest I've paid in the last 30 years or so is 8% of my income in Health Ins and usually two or three times as much, or more.
If the US went to a National Health Insurance, everyone would need to pay in depending on their income. The simple number to pick out of the air would be 10%, seems reasonable, or actually low based on my experience. But lets use it. So using my income - before I was retired of $50,000, I'd pay $5,000 or $417 a month. - a lot less than the $12,000/yr or $1,000/mo that I was paying, so I'd be happy. Some pay less now, so they'd be unhappy, I guess. But maybe not, if they earn say $30,000 they'd be paying $3,000 a year or $250 per month - real low!
Now for my big idea. I think that the people who cause the expensive medical care should pay their share. I am referring to manufacturers who make defective products that cause injuries, illnesses and deaths. Why should they not pay their fair share? Lets take a small example, and here I will have to use some figures that I am pulling out of the air, they seem reasonable to me, and I'm sure someone smarter than me could verify or put them in perspective. Now follow me closely here. Lawnmower accidents, lets say there are 100,000 per year and it costs the hospital $1,000 on average to fix up each injury. That's 100 million dollars. Now, how many lawnmowers are sold a year? Lets guess 10 million. So, if we tax each lawn mower a $10 'Health Ins Charge', we collect 100 million dollars - enough to cover the medical costs incurred by the manufacturers machines. The manufacturers meanwhile can say, "We don't want our machines to cost an extra $10 each, what can we do?" Well what they can do is design their machines to be safer and cause less injuries. Lets say they do that and in a couple of years lawnmower injuries drop in half to 50,000 a year, the Health Ins Charge could then be dropped to $5 per machine.
We can check with the Hospitals to see what are the most dangerous things that cause the most injuries, illnesses and deaths and are the most expensive. Why should these things not pay for the misery and expense they cause? They make their living, and profit from them and it is in their power to reduce those costs and I'm sure if it was financially profitable to them they would. Other items that come immediately to mind are :- Chain Saws, Cars, Cigarettes, Guns, Alcohol, Soda's, Fast Foods, Fat Foods, I'm sure there a few more. That Health Ins Charge - which is within the makers power to reduce, and if they did would be win/win/win situation for everyone involved, would go to the National Health Insurance to help reduce every ones premiums.
There are probably a couple of other place to pull money into the National Health Ins Fund without too much pain. Lets see, how about a tax on gambling etc, the good old sin taxes, or add 1% to the sales tax of every State, they can collect it - it shouldn't cost a lot more for them to collect as they already do it, and then they send in the 1% to the National Health Ins Fund every week or month. A lot cheaper than the Feds setting up a whole new Federal Sales Tax and it would only tax money that was spent (Not incomes, savings etc) Of course there would be a deductible - say $10 when you visit a Doctor, $10 for a Rx, otherwise people would go to the Doctor for a band aid or a bottle of Aspirin. We would also be collecting money from 47 million more people than we are now - the 47 million uninsured Americans, and we'd be collecting from the rich people too, someone making a million dollars a year would be contributing $100,000! Someone making $20,000 would be contributing $2,000 - seems fair to me.
It would probably be possible to reduce the 10% National Health Ins Tax by using those suggestions, maybe considerably - to 8% say or even 6%.
Comments please.

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