An Affordable Health Care System.

[ivanm]

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Healthcare reform has been a hot topic lately and a variety of proposals for coverage have been floated around but I have seen darned few proposals for an equitable way to finance these proposals.  So I started some basic research  this morning with the objective of ginning up a basic model system and a way to finance it without robbing the rich and driving the employers either out of business or offshore.

There are a number of web sites that deal with the Medicare system in its various parts and I have chosen to use a basic Medicare system approach for my model because I have Medicare benefits and use the system. That is to say, I have Part A and Part B coverage but have a private sector coverage that helps me purchase my prescription drugs. My wife and I use the BC/BS policy that is offered as part of her retirement benefits.  I don't know how much the pension plan actually pays on the premiums but surely they pay a considerable amount for the policy, which appears to be a group policy.  Our monthy premium is on the order of $145 a month for the two of us, which I assume is much less than if we
had to purchase it outright.  The deductible is fairly high on things other than drug coverage but the drug bennies is attractive to me.  We pay only 20 to 25% of the total cost of the prescription depending on whether or not the drug is for a brand name item or a generic.  I realize that others may have better medigap coverage at a lower premium but our plan is acceptable to us and has served us well.

[ivanm]

Let me first dispel the myth that Medicare is free and that the premiums are cheap and don't increase over the years.  Medicare and Medicaid were signed into law on July 30, 1965 and the monthly premium for Part B was $3 a month.

This URL points to a brief history of Medicare.  http://mnseniors.org/content/view/154/67/
Other sites provide about the same information and as one might suspect, there are loads of activist sites for senior citizens.

Perhaps the most authoritative site is
http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3272

This is an official government site and provides some basic authoritative info. about Medicare. I plan to refer to this site as my proposal unfolds.

[ivanm]

Before going on, I invite anyone who cares to contribute to the effort to do so but please try to keep it objective and non-partisan. That may be hard to do but the last thing I want is a shouting match and a battle of ideology.

The name of the game is to devise a system that is affordable and that provides some basic coverage.  The Medicare system has been expanded a number of times since its inception, which may account for some of the need to increase monthly premiums.  The fact that providers raise their fees also has a large bearing on the premiums.  Medicare  has responded by raising monthly premiums, raising the deductible, and by means testing, which is a few of many changes it has had to make to keep the system solvent.

Even the Medicare tax, which is paid by the employee and matched by the employer, or in the case of self employed people is paid entirely by them, has been adjsuted upwards on more than one occasion.
Means testing has also been applied to the Medicare tax as well as to the monthly premiums, which are paid by the insured, the individual getting the benefits. The CMS article also touches on that process, and by that I mean the premiums for Medicare Part B.

Note the last page of the article, which speaks of Part A paying towards a stay in a skilled nursing home.
Once again, this seems to be an extension or improvement of the earlier coverage.  As a senior whose age has taken its toll on the old bod I can tell you that this part of the coverage is vital.  I also have purchased a private sector long term care insurance policy.

[ivanm]

My primary concern and objective is to find a way to finance coverage in a manner that is non-partisan as possible and is affordable as possible.  This to me is the fun part of the exercise and I will leave the details of the coverage to the experts.

Mr. Obama has proposed a plan that is very comprehensive and also very expensive, perhaps to the poinnt of being cost prohibitive.  Let me find some data on that issue before proceeding. He wants everyone to be covered by some sort of insurance and the addition of some 47 million who have no insurance strikes me as being a monumental task, financially speaking.  Stay tuned.

[ivanm]

Various sites on the internet report the estimates of his plan and they are in the the 1.5 to 1.7 trillion dollars  range for the cost of the plan for 10 years.  This amounts to 150 to 170 billion dollars a year and I assume this means additional funds from premiums, deductibles, and taxation, primarily taxation.

Either figure is big bucks but I think it is achievable without fleecing the rich and punishing the employers.  Not meaning to be partisan, the simple fact remains that when a plan is means tested or when the employers and wealthy people are made to pay extra taxes then the plan can suffer.  Why?
Healthy people will not participate, which leaves the plan heavy with poor oldsters or those that cannot afford good private insurance, and it is known that the older patients are those that require the most healthcare attention.  So the savings of a group plan, which depends on a mix of participants, some young, some old, some healthy and some not so healthy, essentially evaporate.  Medicare as it exists today is very much a group plan that covers most people for the same monthly premium regardless of their health.  The exception is the means testing of the higher income patrons, who are expected to pay
a higher premium.


How can we come up with 150 to 170 billion bucks a year without busting the budget and driving off the upper income people?  I think it may be possible to do so, and what follows is my country boy proposal to do so . 

[ivanm]

Forgive me for the many small posts but my screen is no help.  As usual, on this site, the screen starts jumping around after a few lines have been posted, so I start another one so I can type in the normal fashion.

We have an asset in disguise and that is the tremendous amount of interest we pay on that part of the national debt that is paid to foreigners.  If we can bring that debt back home and can give American entities an incentive for holding that debt we can go along ways towards financing a healthcare plan without the downside of punsihing people just because they are wealthy or employers just because they offer bread and butter jobs to employees.  I find it poor gratitude to punish these people and to me it is like biting that hands that feed us. 

Let me find the total interest paid to foreigners each year and the amount of the corresponding debt. and I promise to get back with you, well, sometime soon.  Nature is calling and I am up at night because My pain patch is giving me insomnia.  What a blast, huh?

[ivanm]

Getting a fix on the national debt owed to foreign interests and the amount of interest we pay on that debt each year can be challenging because the debt rises rapidly.  I may need to sign off and get some work done around this poor farm (the ranch) so it may be a while before I get back with you folks. It is 0621 CDST and the sun is up so I need to finish some outside carpentry before it rains again.

[ivanm]

This web site http//:en.wikipedia.org/wiki/United_States_public_debt reports that the amount of the national debt, called public debt in the article, in fiscal 2010 is estimated to be 14,456.3 billion dollars.
Going back to fiscal 2007, where I can find a matching interest paid for that fiscal year, the public debt was 8,950.7 billion dollars.

A blogger web site, http/:bp3.blogger.com ... reports that the amount of interest paid on the public debt by the end of fiscal 2007 was 429.977,998,108.20, or rounding up to the nearest billion, 430 billion
dollars.  

Web site www.treasurydirect.gov/govt/reports/ir/ir_expense.htm substantiates this figure.
 
The previous wikipedia article I referenced above states that in fiscal 2007 foreign interests owned about 44% of our total public debt, so .44 x 8,950.7 billion equals 3,938.3 billion dollars, or 3.938.3 trillion if you like scary numbers.

[ivanm]

Let's assume that the foreign interests received the average rate of interest so they received 44% of the
430 billion dollars paid out in fiscal 2007, or 189.2 billion dollars. That my friends is 189 billion bucks going out of our economy and is more than enough to pay for the annual cost of the proposed healthcare plan of 1.7 trillion dollars over a ten year period.  

If somehow this amount of debt could be retrieved and placed in the hands of American interests then we would not only stop the bleeding but we would have a nest egg, some of which could be applied to the annual cost of the gargantuous healthcare bill of 170 billion dollars.

Granted the portion of the debt owned by foreign interests may be higher by now and the total debt outstanding is surely much higher, possibly 12,867.5 billion dollars at the end of fiscal 2009.

If we need to earn 170 billion dollars a year we need to buy 8,950.7 billion dollars of debt, a big order but no sweat for a high roller like Vel.  Wouldn't it be nice if all the 170 billion in interest per year could be applied to healthcare but I don't know of anyone that generous.  Let's assume the debt would be held in special bonds paying tax exempt interest and that half of the interest earned was to be applied to the healthcare fiasco.
That would be 85 billion a year, leaving us to scrounge up another 85 billion to meet the challenge.

[ivanm]

Where are we gonna get another 85 billion a year?  The annual surplus on soc. security receipts is on the order of that amount, so rather than squandering that much each year and giving the trust IOUs following by funny money, special bonds that accrue interest but never pay any cash interest, we can use the surplus and pay them some real interest, well, someday maybe.

The trust fund surplus is down due to the recession but once the economy picks up the surpluses should resume.  Recently the annual surplus was on the order of  80 to 90 billion a year, just enough to save the day on my proposal.  

Another possibility is to divert the surplus systematically each year to pay for healthcare costs.  If everyone is to be covered regardless of age then this seems to be equitable and would use the existing tax mechanism to collect the revenues. In other word, let it be known that a certain portion of your monthly payroll taxes for social security would be used for healthcare coverage.  This handles the employed and the self employed but does not cover those who don't work for a wage.  

I hope the system is optional as far as joining the plan, so those who have investment income could pay a certain percent of their annual learnings like a self employed person would.

[Lightworker]

Health care has always been a troubling issue for me, because this is the issue on where I depart somewhat from my otherwise seamless conservatism, and it comes down to this question:

'Should you be allowed to die if you do not have the money to get an expensive life-saving treatment or surgery?'

My sense of morality simply refuses to answer 'yes' to this. It's monstrous to attach a monetary value to human life. At the same time, I know from experience how deadly and destructive a single-payer system can be as we have up here in Canada.

There has to be a better, more rational way.

[ivanm]

Health care has always been a troubling issue for me, because this is the issue on where I depart somewhat from my otherwise seamless conservatism, and it comes down to this question:

'Should you be allowed to die if you do not have the money to get an expensive life-saving treatment or surgery?'

My sense of morality simply refuses to answer 'yes' to this. It's monstrous to attach a monetary value to human life. At the same time, I know from experience how deadly and destructive a single-payer system can be as we have up here in Canada.

There has to be a better, more rational way.

It seems the age of the patient and his expected value to the economy if he should survive could be considered. 

[ivanm]

That seems cold but it might be a consideration.  Hopefully we won't have to resort to such criteria because to me life is precious and the older and more frail we get the more precious it becomes, if only a day at a time.

Bless their hearts, there usually is money to be had from loving Americans who also value the sanctity of life.  Some really amazing donations have came about.  Even here in this little farm community the various civic clubs, even the bars, work together to come up with 6,000 or more, which is a start on a serious operation.  It is not unusual for wealthy donors to match the meager amount we manage to raise.

Just off hand, I can't believe that Obama's plan would give someone a transplanted organ operation if that was needed. Maybe it would go part way but I think it is expecting too much to think it would foot the entire bill.  

[Lightworker]

It seems the age of the patient and his expected value to the economy if he should survive could be considered. 

I completely disagree.

The value of a human being is inherent, and has nothing to do with his/her ability to be a mere cog in an economic machine: this way lies the path to euthanasia for 'useless eaters', and was a cornerstone of Nazi practice, for instance.

[Lightworker]

Anyway, the government ought NEVER to be put in a position to determine when and how and for what reason an innocent person should die.

That's a decision the individual needs to make for himself, by refusing 'heroic measures', as they put it, to keep the sinking flame of life still guttering weakly.

This is what living wills are for.