House Republicans are whipping their members to make sure they have enough votes to pass the American Health Care Act (AHCA, or Trumpcare), preferably with no changes to House conservative wingnuts so that it can also pass the Senate moderates and get to President Donald Trump’s desk to sign into law. And since they’re using budget reconciliation, they probably can’t go back and forth and into a legislative committee. If they can’t walk this tightrope, the bill will die and the chance at “Repeal and Replace” with it. I think they GOP will still need to push through a repeal of the Affordable Care Act (ACA, or Obamacare) one way or another, but this is their first best, and easiest, chance to do so.
Either route, however, will be a disaster. A full repeal will kick tens of millions off health insurance and off Medicaid. The AHCA route will cause millions to lose their insurance, the eventual loss of millions more in their Medicaid coverage, and a potential death spiral in the individual markets. This isn’t a “win,” in any sense of the word. It’s a short-term political necessity for the GOP because they’ve been promising this for years and have staked their very political existence to repealing the ACA. So they have no choice.
But when the dust settles … whether that’s next month, next year, or four years from now … the country is going to be in the same position it was eight years ago when a young Barack Obama with no grey in his hair took office and fought for a universal healthcare system: Basically up shit’s creek, and we will have thrown away the only paddle we had come up with to help us (Obamacare). The healthcare system will be shitty and getting shittier, benefiting only the rich who can afford it or fly to another country for a cheaper version of an operation. Many people forget how fucking bad it was a decade ago, but they will remember. Oh yes, they will remember.
Which is why, like I wrote last time, we need a replacement ready of our own. A workable National Healthcare System (NHS). An affordable NHS. Not one that covers everything, but one that keeps us all out of the poor house, takes the fear out of going to the doctor or the hospital, and creates a nationwide network of members that can negotiate with providers and pharmaceutical companies to lower costs across the board. Let’s call it the Basic Health Care system, or BHC.
This wouldn’t be the Bernie Sanders system, which he lifted from Denmark. That sort of progressive fairy tale needs to die …and it needs to die right now … if we’re going to ever be successful at setting up a real NHS here in the States. No premium, no copay, no coinsurance … no fucking way. It sounds like a dream, because it is a dream. And yes, the Danish have something like this. But Denmark also has an effective tax rate of 55.8 percent (it used to be as high as nearly 70 percent). And there is absolutely no fucking way that Americans are paying more than half of their income in taxes. Ever. So stop pushing a fairy tale that has no shot at becoming reality.
So we need something more basic. Something that is truly progressive, and by that I mean it covers everyone and that we all pay for, each according to their ability. Something that could be built on to help out those most vulnerable and most in need. And something that private insurance could then supplement and augment where and when people and companies choose it is in their interests to do so. (Now, I’m not a healthcare expert, and so you should take my exact figures and costs below with a grain of salt. But I think the framework is something that is feasible and the type of system we should start with.)
So what could a Basic Health Care system look like?
First, a “basic” system needs to be simple so that anyone can understand it. The costs need to be clear and not onerous. And the benefits clear with no surprises. The three main parts of health insurance are the premium, copays and deductibles, and coinsurance. So let’s tackle each.
The Basic Premium
$100 per month, for each U.S. citizen 20 years old or older.
That’s $1,200 per year per person. A stable healthcare insurance system requires a split in costs between the person being insured (aka you) and the insurance company (aka the government). The higher percentage individual people pay out of pocket means the less we need to collect in taxes to cover the government’s portion. That’s where the hard part will be, in striking that perfect balance.
The United States spends nearly $10,000 per person on healthcare, which is pure insanity. As you can see from the chart above, we spend twice as much per person as nearly every other First World nation. The Swiss are the closest to us, and that should come as no surprise when you realize that Switzerland is one of the only countries in the world that also has a privately based healthcare system (albeit with an extremely strict individual mandate to buy insurance from an approved private company).
So, a $1,200 yearly premium makes a small dent in the $10,000 average spending. How do we make up the remainder? Through deductibles and coinsurance (and then fill the remaining gaps with other various taxes).
The Basic Deductible
$3,000 per year, per person.
I know, that’s pretty high, although with the healthcare system machinations of the past decade, we’re all sadly starting to get used to deductibles that are this high, or even higher. But remember, this BHC is a “basic” system. It’s not meant to cover all expenses or be free. It’s meant to remove the fear of bankruptcy because you have an accident or get sick, and it’s meant to create a nationwide system and pool of insured so that we can actively work together to make our tremendously expensive and inefficient more affordable and more efficient.
Now, we can layer additional plans over this, if you want to pay for them, to reduce that deductible. For instance, there could probably be plans that cost you as little as $50 a month to reduce the deductible by $1,000 per year or more (depending on your health history and such). For that type of supplemental plan, we can let the market work its magic. And, if we choose, we could offer additional plans like this through the same BHC system for those who volunteer into them.
The Basic Coinsurance
An 80/20 system.
Anyone with a PPO or HMO plan now if familiar with how coinsurance works and the common rates. Once you hit your deductible, the plan pays 80 percent of any additional costs. You then are responsible for the other 20 percent. (Many private plans are 90/10 now, but 80/20 is a reasonable concession to defer some additional cost from the government shared portion of the system.)
The Basic Copays
Preventative Care: Zero, for one physical checkup and one psychological evaluation each calendar year. (None of this “every 12 months” shit. It’s too complicated and deters people from visiting their doctor because they can’t remember when they last had a checkup. You can go in December and the next January, one month or 13 months apart, and it shouldn’t matter.)
Your Primary Care Physicians and a Local Urgent Care Clinic: $50
Urgent Care Clinic at a Hospital: $100 (and all hospitals need to be encouraged to set up a urgent care facility that is separate from their ER)
Hospital Emergency Room: $150
Hospital ERs are the most expensive and most inefficient part of our current healthcare system, and we need to actively discourage people from going to them unless necessary. We also need to build more local urgent care clinics, which could double as regular healthcare clinics where people can go to get checkups and routine vaccinations. I think we need to have a rate of at least 10 local urgent care facilities for every hospital ER before we really start to solve the problem of the expensiveness of U.S. healthcare.
The Personal Out-of-Pocket Costs
With that plan, outside of annual checkups and routine doctor visits covered by a copay, the first $4,200 of personal healthcare spending comes out of each person’s pocket in premium and deductible, and then the bulk of the government plan kicks in to cover the vast majority of the rest. That’s nearly half of the per-person average that we as a nation spend on healthcare. (In fact, if a nationwide pooling of insured persons brings down the per-person average closer to what the worldwide average is, that would then cover about two-thirds to all of the total spending.)
Paying for the Difference
Where do we get the money to cover the rest?
Employer Costs: One of the biggest advantages to an NHS is that it removes the uncertainty and expenses for companies that have to provide healthcare coverage to their workers, and we could do it for cheaper. Personally, I’ve never understand why every American company needs to have expertise in the health insurance market in addition to their actual chosen field. How does that make sense? It puts too much onus on companies to deliver a superb plan in something that they know absolutely nothing about and, frankly, shouldn’t need to concern themselves with. Companies should have to pay a flat rate, per employee, for their BHC insurance (and prorated for part-time employees).
$4,000 per year for each full-time employee (defined by any employee who averages 30 hours per week or more). That could then be prorated for part-timers: $3,000 per year for anyone working 20 to 30 hour s per week; $2,000 per year for anyone working 10 to 20 hours per week; and $1,000 per year for anyone working less than 10 hours per week. These tax payments could be broken up and paid month-by-month, to alleviate a large end-of-year tax bill for the company.
A simplified system like this would be a massive boost in both confidence and money for every company in America. Companies now pay more than this for insurance for their employees. (Go ahead, take five seconds to look at your 2016 W9 and see how much your company paid for your insurance last year. It’s on line 12DD. We’ll wait.) All large companies also have to hire a team of human resources to negotiate and manage their healthcare insurance, plans, and benefits. And it seems bonkers to me that any of that should be necessary.
Payroll taxes: We could continue the nearly 3 percent Medicare tax (split by employer and employee) to help supplement the insurance for the elderly and disabled (who would have a hard time covering the higher deductible on their own). We could expand that by eliminating income ceiling for this tax (which is currently at $127,200). In 2015, the Medicare portion of the payroll tax generated $234.2 billion in revenue. Two years later, that will number be higher, and combine that fact with lifting the income limit for the tax which would generate even more and eliminating the tax deduction for employer-supplied healthcare (which would no longer be necessary), and we’re looking at a few hundred billion dollars more in tax revenue each year.
Other income and consumption taxes: There are a lot of options for what other taxes we could institute to help cover the difference. A small income tax (either personal, corporate, or both). An additional payroll tax, which would just hit those who work and employ them. Or a variety of consumption taxes to more evenly spread the pain.
Personally, I think that the just way to pay for a government service is to tax why we need the services in the first place. So we should pay for healthcare by taxing the things that make us unhealthy. We should have a national VAT or sales tax on all sugar and sugar substitutes, sugary drinks, processed foods that are high in sodium, foods that are abnormally high in saturated fats, and all simple starches.
Also, the drug war is a failure. And while I don’t think the government should have the right to ban what an adult person can do with their body or what they can imbibe, I do believe that the government has a right to heavily regulate and heavily tax all drugs, tobacco, alcohol, and other “sins” like prostitution. Just because something is legal doesn’t mean it has to be easy or cheap to obtain. Government shouldn’t be in the business of moralizing behavior, but as a nation we do need to recognize that there are destructive elements in society and that extra high taxes on those things should be used to offset some of their worse effects. In 2016, Colorado alone brought in about $1 billion in taxes on marijuana sales. Extrapolate that success across all 50 states and the District of Columbia—and across all drugs, alcohol, tobacco, and prostitution—and we could be looking at hundreds of billions per year in tax revenue that could be used to help people.
Time to Move
The point is that this is a workable system, and the type of thing that Progressives need to start embracing and coming up with now. It’s not time to cross our fingers and pray that Obamacare doesn’t actually get repealed. We need to prepare for a future after it. A future where everyone realizes that the Republican’s replacement is an abject failure. A future where people will be looking for a real alternative.
This is a workable alternative … or at least it’s a reasonable place to start.