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By Peter D. Schiff
Guest Columnist
Money Morning
The healthcare bill unveiled last week by the U.S. House of Representatives (with the full support of the Obama administration) is one of the worst pieces of legislation ever drafted.
If passed, President Obama's healthcare plan will reduce the quality and increase the cost of healthcare in America. But more importantly, it will severely undermine our already weak economy. To burden a country currently in the throes of a violent recession with such a bureaucratic albatross clearly illustrates the scarcity of economic intelligence in Washington.
In the first place, specifically taxing the rich to pay for healthcare for the uninsured is the wrong way to think about tax policy and is an unconstitutional redistribution of wealth. While the government has the constitutional power to tax to "promote the general welfare," it does not have the right to tax one group for the sole and specific benefit of another.
If the government wishes to finance national health insurance, the burden of paying for it should fall on every American. If that were the case, perhaps Congress would think twice before passing such a monstrosity.
In the second place, the healthcare bill is just bad economics. For an administration that supposedly wants to create jobs, this bill is one of the biggest job-killers yet devised. By increasing the marginal income tax rate on high earners (an extra 5.4% on incomes above $1 million), it reduces the incentives for small business owners to expand their companies.
When you combine this tax hike with the higher taxes that will kick in once the Bush tax-cuts expire, and add in the higher income taxes being imposed by several states, many business owners might simply choose not to put in the extra effort necessary to expand their businesses. Or, given the diminishing returns on their labor, they may choose to enjoy more leisure. More leisure for employers means fewer jobs for employees.
More directly, mandating insurance coverage for employees increases the cost of hiring workers. Under the terms of the bill, small businesses that do not provide insurance will be required to pay a tax as high as 8% of their payroll. Since most small businesses currently cannot afford to grant 8% across-the-board pay hikes, they will have to offset these costs by reducing wages. However, for employees working at the minimum wage, the only way for employers to offset the costs would be through layoffs.
The uninsured self-employed, or those working as independent contractors, will be forced to buy insurance or pay a tax equal to 2.5% of annual income. Either choice will divert resources from more productive uses into an already out-of-control healthcare bureaucracy.
Sadly, the bill does nothing to restrain or alter the dynamics that have caused healthcare costs to spiral ever higher. In fact, the bill will intensify these pressures.
The simplest explanation of why healthcare costs so much is that demand exceeds supply. Demand is a function of how much people are prepared to pay. Insuring more people will drive demand for healthcare services even higher.
As costs continue to soar, expect additional tax hikes to fund the added expense. As these additional taxes further encumber a weak economy, the diminished tax base will yield lower total tax revenues - despite higher rates. As the politicians attempt to
The worst part of the whole fiasco is trying to imagine the bureaucracy necessary to administer this plan. My guess is that the government provider will mis-price its policies on the low side, pushing employers to dump private sector insurance for the taxpayer-subsidized alternative. Such a system will further distort healthcare pricing and, ultimately, make a bad situation intolerable.
The enormity, complexity, and expense of this bill could well pull the rug out from what many of my cheerleading colleagues believe to be the beginning of an economic recovery. The way I see it, the economy is walking dead anyway, and this measure is the equivalent of a stake through the heart. But even if we manage to escape the grave this time, Congress is working on a few other ideas that will surely keep us buried.
[Editor's Note: Peter D. Schiff, Euro Pacific Capital Inc.'s president and chief global strategist, is a well-known author and commentator, and is a periodic contributor to Money Morning. Schiff is the author of two New York Times best sellers: "Crash Proof: How to Profit from the Coming Economic Collapse," as well as "The Little Book of Bull Moves in Bear Markets." For a more-detailed look at the United States' ongoing financial problems - and for some strategies that will help you protect your wealth and preserve your purchasing power before it's too late - download EuroPac's brand-new free special report, "Peter Schiff's Five Favorite Investment Choices for the Next Five Years."
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May I add the following, accidentally deleted lines: "When, and I say when, we have a national health care system, you'll face the same choice. When we're both dead, your unborn descendants will in all probability grow up taking the system for granted and wondering why it wasn't always so. After all, slavery, debtors' prisons, and hanging 14-year-olds for petty theft were once familiar aspects of our Anglo-American, so-called "Judeo-Christian" culture, and I don't suppose even the crew at The Weekly Standard would want those days back, although I can't read all their hearts."
@Robin, with all due respect: I think that the government, for one, put men on the moon very effectively, and at a much smaller level of things, I can count on the U.S. Mail postman to be at my door six days a week between 9 and 10 a.m., just like clockwork. It's just foolish to mindlessly repeat a backwoods GOP claim like the one you began with, unless (just wondering) you've actually got no hope at all that the armed forces can't protect your country or kill huge numbers of our enemies, the fire department in your town doesn't put out 100% of the fires it is called out for, the police department doesn't protect you and your home from random daily attacks, or the people down at your local public library don't keep track of the books that are checked in and out, can put a book on hold for you (if you read books), etc.
The fact of the matter is that you, yes you, depend on government departments high and low to "run things effectively" every day, and you will to the day that you die–and if you are so bold as to make the claim that they can't, it's because you just don't know how good you've got it. So perhaps you should move to a place where the government doesn't claim to run anything, and nobody would listen to it if it tried. The place is called Somalia. Good luck there.
After the last ten years, the big players in the private sector don't have a lot to brag about either. So long, Enron! Later days, Wachovia, Lehman Brothers, Washington Mutual! Way to slide into bankruptcy court, GM and Chrysler! Glad your fantastically high-paid bosses ran you all so much better than that nasty ol' fed'rul gummint kin run thangs.
I find very creditable the element of no Constitutional authority to take from one group to give to another.
A few words from the founders is relevant here:
Thomas Jefferson:
"The democracy will cease ti exist when you take away from those who are willing to work and give to those who would not"
"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them"
"To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical"
As a Canadian I applaud what Obama is doing. Raising the living standard for all Americans and not just a select healthy few. All that's promoted in the states is the long lines. I rarely wait 1/2 hour or more at a walk in clinic to take my sick children in when they are sick. I don't pay a dime but I pay more taxes compared to Americans at the same income level. I don't pay for healthcare costs out of pocket. I can have a pre-existing condition but I am still covered.
Why would you throw something like that away or even give it a chance?
All I hear up hear is people loosing their homes because they can't afford to be sick. They ignore their sickness because they can't afford to be healthy.
That is not a concern up here. Yes there are some lines for some equipment but it's not a perfect system. But it is far better than the US system. The real problem here is the resistance for private and government funded system. This is where I can pay to have a private doctor where those that can't afford it will have the public system. Currently, with a few exceptions, there is only the public health system.
With the Obama plan you have the 2 systems. That makes it better than our Canadian system. On the other hand it will be lacking in other areas.
The bottom line is this. If it is better than what you have why not embrace it! You either pay tax dollars or medical coverage dollars. if everyone is covered then the pool of people healthy and not will reduce the overall administrative costs and the fear of claim denials.
@darrell jr.
Millions of Americans saw their tax money going to George W. Bush's self-proclaimed "War on Terror" in ways they probably saw as "sinful and tyrannical", but they had to pay up or go to jail. When, and I say when, we have
Thomas Jefferson, sad to say, was both a beautiful writer and a frequently vicious and deceitful hypocrite at the same time. I prefer the sincere and noble George Washington, not as good a phrasemaker as Jefferson but a far, far better man, who demanded that the Continental Congress raise the cash that was needed for the national common purpose (the revolution, disagreed with by about one-third of the newborn nation though it was), and warned against "foreign entanglements." Let's bring all the soldiers and sailors home from all over the planet, and spend the money domestically.
In the last 10 years, my immediate family members have had back surgery, bladder surgery, trips to heart specialists, countless trips to doctors and emergency.
It didn't cost us a dime because we're Canadian, we get more for less because we don't have HMOs or "pre existing conditions".
Our government runs the show, it's not perfect but it's a hell of a lot better than what the US has, nobody goes bankrupt because they get sick (happens every 30 seconds in the US) and nobody loses their healthcare when they lose their job because they can always opt for the $54/month standard or $104/month for a family of four although some provinces don't charge anything.
99% of what you hear in the US about the Canadian healthcare system is complete bullshit
what happened to my post ?
Barack Obama will never say to your face what he actually plans to do -or achieve- with these huge new government programs.
Rather, you get some specious auditory performance with styrofoam props to wow the plebes, like the tacky greek columns in Denver. To him, the revolutionary ends justify the Alinskyite means- so the Dear Leader just tells you whatever he needs to.
And the truth is that Obama is out to nationalize health care.. they'll be no private insurance industry left after five years of Obamacare… but of course he's lying about it.
As for the American public, the reality that Obama is not up to the job seems to finally be setting-in; the poll numbers are now headed steadily south- is he already facing his Waterloo on this bill?
The idea that government can run anything effectively is a joke. The great obeyme doesn't even know what is in the plan. When asked about certain statements in the plan he claims that he doesn't recognize them as part of HIS plan. What a flat out liar or extremely poor leader.
If I didn't read the name of the author at te beginning, I would have thought that this article is written by Rush Limaugh or one of his assistants.
I would like to advise the author to visit World health organization website to find out that US citizens pays the highest health insurance bill and receive the lowest health insurance benefits for their dollar.
Yes, we have the brightest minds and the best technologies but it is only available for those who can afford paying for it. The average American, if insured, doesn't receive better treatment or service than the average Canadian under the Canadian public health insurance plan, and pays a lot more.
The concern in America is that not only there are about 50 million uninsured citizens, but also those who are insured are troubled by large bills and co-pay and cost sharing. And if, God forbid, any one has a serious health situation, then s/he is on his own and s/he will not have any insurance; go sue multi-billion corporations. Let me give a simple example. I have a new born last October. Four vaccination shots cost me $1,135 and the insurance denied payment because I didn't specifically select this pediatrician (who is also the pediatrician for my other two children) before the time of service.
The problem is that we have an insurance industry that can twist arms in Washington DC as they are trying to do now by emptying any health care bill from any meaningful reform. "Supply and demand" as a reason for high cost is a real joke. Taxing rich folks will deny us a high quality health insurance is one more joke. Government run programs are failures is also a joke. Think for a second of post service in US. No private industry "will" compete with post office because they will not get astronomical profits in this business; they can't pay their executives millions of dollars in compensation.
Public health insurance similar to Canada, not mandating insurance as they did in Massachusetts, if there will be one because no joke Democrats are more rotten than the Republicans ( I don’t mean offending anyone), can be the way to cut health cost and relieve the employers from large bill. As in Canada, those who have money to spare, they can go out and purchase private insurance or additional benefits.
I am concerned about the uninsured, but insured people are troubled by large health bills for little benefits.
Barack Obama will never say to your face what he actually plans to do -or achieve- with these huge new government programs.
Rather, you get some specious auditory performance with styrofoam props to wow the plebes, like the tacky greek columns in Denver. To him, the revolutionary ends justify the Alinskyite means- so the Dear Leader just tells you whatever he needs to.
And the truth is that Obama is out to nationalize health care.. they'll be no private insurance industry left after five years of Obamacare… but of course he's lying about it.
As for the American public, the reality that Obama is not up to the job seems to finally be setting-in; the poll numbers are now headed steadily south- is he already facing his Waterloo on this legislation?
http://reaganiterepublicanresistance.blogspot.com
The principle of "reducto ad absurdum" shows the fallacy in this diatribe. Increasing taxes, God forbid, to where they used to be or more is claimed to shut down all incentive for industrious business! Give me a break!
So, would the writer claim that all taxes should be abolished to make this nation the most prosperous it can be? Oh-oh, that might mean we have NO services, such as fire and police, that our roads degenerate into a succession of potholes . . . you get the idea.
It is just a matter of degree, not a principle of fact, as it is presented.
Consider a more rational view – "reduce the quality and increase the cost"? My daughter-in-law has just become a nurse, and she will be very happy to hear this. If the costs are increasing, then that must mean she is getting a pay hike! No? Well maybe she will work less hard for what she is paid, to satisfy your prediction that the quality will be reduced. No?
As a society we pay for what you get, and all we should really be concerned about is the fair distribution of the cost. I for one consider it absolutely immoral and barbaric that in a supposedly rich and civilized country we can allow needless suffering to fellow human beings. If aliens in outer space were to view what we do, they would be in stunned disbelief at the pain we turn a blind eye to, in order to indulge the few.
Our goal should be to cover all individuals through private health insurance. We are not prepared to turn our health system over to the government. Advocate for greater transparency in both quality and price information. Place both the decision making ability and healthcare dollars in the hands of the consumer. Support the Friends of the U.S. Chamber and sign the Health Care petition at http://www.friendsoftheuschamber.com/takeaction/index.cfm?ID=40 .
Obama may be genuine in his efforts to promote nationalized health care options, and obligations. But given his rapid fire introduction of this and many other programs our country would struggle to afford under the best of economic conditions, and his alleged superior intelligence, it appears more likely his true agenda is to wreck our country, to turn the USA into a "USS of A" (think USSR) in which he and other elitist ideologues rule over the rest of us. Recent political rhetoric has elevated national health care from a "right" (which it is not under any reasonable interpretation of the USA constitution) to an "obligation" under which common citizens will be fined if they do not enrole in the federal health insurance program. Obama repeatedly makes public remarks in support of his proposal, but never gives sufficient specifics to accurately judge the merits of any of his specific ideas, and refuses to engage in open, detailed discussion and debate. He speaks as though he thoroughly knows what he is advocating, despite contrary financial numbers from the Congressional Budget Office and the opinion of the Mayo clinic.
I'm self-employed, with high blood pressure. I've been taking the same dose of the same generic hypertension pill for ages. Voila, blood pressure normal.
Our family's health-insurance policy from a non-profit HMO, a really good one that does a sincere job of prevention, keeping costs down, and, yes, "rationing health care", has DOUBLED in the last four years to just under $24,000 per year. It's the same price charged to that of every self-paying family in our geographical area. $24,000 a year! We're not big users; several months can go by without any of us contacting the HMO in any way at all, other than to refill prescriptions. God be praised, none of us has had a serious medical problem in all the years we've been members.
Our HMO has the legal right to terminate our policy without notice or appeal if we miss one payment for thirty days, and once I was ever out, I'm sure I wouldn't ever be taken back, as the laws now stand. I've got high blood pressure, you know.
My "pre-existing condition" and middle age make me uninsurable with any other carrier. I've tried. The option of an HSA/catastrophic policy leaves so many coverage holes for people who are, let's say, no longer young, surviving and keeping a small business going in this economy by the skin of our teeth, that it seems too risky to move to without being absolutely compelled. Which may happen.
Mr. Schiff, I hope, has a lot more money than we do after all his years in the financial industry. I'm sure his health insurance is first-class and he has no fear about either losing it or paying for it. Bravo for Mr. Schiff! But the reason that some pretty radical changes in our broken and ill-conceived system is going to take place pretty soon is because of the ever-growing number of strivers beneath the Schiff level of success, like us, whose insurance premiums are becoming so high that they just…can't…afford it any more, or their employer can't if they are lucky enough to have an employer who still helps to pay the freight; and because the health insurance industry has earned all the hatred and contempt it gets, in spades. The changes were always waiting for the time when enough people from the middle class were either priced out of the market, unable to get decent coverage at any price, or had been jerked around once too often by the private-industry "rationers", or known or learned about other people who had been. That time has arrived.
On a side note–I followed Keith FitzGerald over to this operation from "The Skeptical Investor" because I had a high regard for him (from his writings and having met him once or twice), his reasonableness, and his enthralling ability to think in unorthodox ways. Now I find his "Money Map" operation infested with right-wing ideologues of the Hutchinson ilk, and Peter Schiff, the eternal doomster and scold. What's happened? I'll keep on loving Keith F., I'm sure, but I'm about to un-subscribe from "Money Morning". It contains nothing special, and then I'm drawn to read the blinkered ideological nonsense from the characters I've mentioned–and it's not good for me. I've got high blood pressure, I may have mentioned.
What a blowhard.
It is not just Obama's healthcare plan, it is every plan he is trying to pass that is and would be a disaster. The man does not have the best interest of America or Americans in his agenda. It is all about him and power and control. He is a disaster as well as his administration. Wake-up America before the Nation is destroyed.
Insurance companies provide the 4-8% administrative costs at a cost of 24% of all health costs. They are the person in the doctor's office rationing your care. If you have a pre-existing condition, the insurance company won't insure you, or will charge an outrageous premium.
I have had government health insurance for 3 decades, for which I pay $500 a month for my family plan, plus co-pays. There is no government interference, only (HMO) insurance company rationing, but not much. It doesn't pay for cosmetic or elective treatment, but does cover most other things. It is simply good care at a reasonable price. And I can go to any doctor i wish, including specialists.
Most of what you hear today is scare tactics. The government plan I have simply works, and if the same is offered to everyone, we would all be better off.
the reason why the healthcare cost are rising dramatically over time is due to the fact that the supply side of the service is not catching up with demand. For example is one needs a knee replacement a screw will be charged around 900 dollars, this screw with the same specifications same dimensions and same standards will cost in a warehouse 90 cents. The reason of this stems from government overregulation in the supply side of healthcare that doesnt allow new players or companies to enter and satisfy the demand, not to mention greedy lawyers ready to file class action law sues to make some profits out of it, or the barriers put by the FDA, patents, etc etc., so if you guys want to fix the rising cost in healthcare you have to improve the supply side by whatever means necesary and the sooner you do it the better.
People like B K are the exact kind of people who are dangerous to progress. He can only spout insults against those he disagrees with and says they don't deserve to live. Such is the mindset of most fools who advocate nationalized healthcare.
Healthcare for all is a worthwhile idealistic goal. However, the USA cannot afford it. More taxes will only depress the economy to make tax collections even less. We do need to consider where most Medicare money goes. By far, most of it is spent on the last year of a person's life, as well as supporting nursing home patients who are far beyond a beneficial life for themselves or anyone else. When a person reaches that point, we should think stongly about euthanasia. Skeptical? Take a visit to any nursing home, and ask yourself if you want to live under the conditions of many of their patients!
Just a bit of advice from one who has lived 40 years in France who has one of the very best medical system in the world (ask WHO) and, now 36 years in the USA who used to have a caring approach to the sicks and even, sometimes the poor.
I was recently on a trip to France and ran short of médications; I asked my doctors to send me prescription to be filled in French pharmacies. I am on Medicare through one of those very rich American insurance companies with a name starting with an H… which have very successfully lobbied the Congress to get monies from the Medicare systems and to handle my medical expenses… for a very nice fee.
In France I do not have any coverage any longer. Surprisingly, the very same drug from the very same Pharmaceutical Company cost me about 66% less overthere…5trange, isn't?
Those poor companies claim that research is awfully expensive and they have to charge more for that reason. However, 85% of the drugs which are prescribed to my wife and me have been developped and put on the market by European companies. Somebody is taking us for a ride; wake up my fellow Americans. The Congress will not serve your best interest but plainly will obey those powerfull Lobbies and don't give a damn about the fact that you get the most expensive, outragedly expensive Health systems…
I jsut met a couple [Americans] living in France the husband was admitted for a potentially lethal desease which required 3 weeks in emergency and who was operated upon by one distinguished French Professor and who was presented with a bill of 24 Euros…I know it is a whopping 35 Dollars…
Who is this idiot Schiff? How much was he paid for his absurdly distorted opinions?
I have seen both the American and British healthcare systems up close and personal for many years. Britian has a better healthcare system than the America at a lower cost. I'm all for copying their system. This should have happen many years ago, but we had far too many Congressmen and Presidents who had been bought off by our healthcare monopolies. Personally, I find it refreshing that we finally have a President and Majority Congress who are actually on our side for a change! Go Obama!
Let's look at this for what it really is, a wealth transfer program.
This is not about health care or health care reform. This is about health insurance which is about money rather than care.
Go back 20 years when prescription medications first started to be included in health care plans. The result was that the price of these medications rose by 30% to 40% a year for many years. This is not a supply and demand result.
Now look at something like laser eye surgery which a decade ago cost about $3,000 per eye. Health care plans decided not to cover this procedure, and now it is about $300 per eye.
Health insurance makes the cost of health care rise, as these two examples among many should illustrate. What reasonable, rational person faced with the actual data would think that throwing more insurance at health care is a solution to health care costs?
Beyond that, where is it enumerated anywhere in the Constitution that these politicians swore an apparently meaningless oath to uphold that they can involve the federal government in this?
Either the U.S. is a plutocracy in which officeholders are using their positions to line the pockets of their friends and allies at the expense of the taxpayers of this generation and those yet to be born, or these officeholders are genuinely stupid and ignorant.
As startling as it is that people think it is a good idea to have Chicago politicians running the country and that these politicians are honest and selfless, and their plans truly are for the greater good, history and the data tell a different story.
Real Americans, from the beginning of this great republic, don't trust government and won't trust government. Certainly not with their health. To a real American, like the 56 who signed a document and risking their lives, honor, and sacred fortunes, government is instituted among men solely for the purpose of protecting the unalienable rights that were endowed to us by our creator. Anything more is antithetical to freedom and unacceptable to anyone who really is an American.
Unlike other countries where you and the product of your labor is technically the property of the state, America was founded to be a nation of sovereign individuals. The president is not supposed to preside over the people. He is supposed to preside over the states, which is why the states, and not the people choose the president. People in America are supposed to be sovereign individuals and not subjects. Government and political authority is supposed to be as decentralized as possible. None of this health insurance reform nonsense contributes to freedom and all of it detracts from it.
So let's get right down to it. Supporting any kind of federal involvement in health care increases dependency on the federal government and therefor diminishes individual freedom. Whatever the problems may be with health insurance and health care, this is not the answer.
Tell Congress what Horatio Bunce told Davy Crockett.
What is stunning to me is the fact that our current system just sort of evolved post WW2. There was really no strategy or plan to arrive at our current situation. Why does corporate America decide who does and who does not have health care. And why can't the current insurance companies offer the uninsured coverage with a subsidy from Uncle Sam? Does this thing really have to be this complicate? Oh I forgot, the US Congress is involved.
Canadian here. Well Mr. Schiff, I think you've been smoking some really good stuff down south (I am Canadian, remember this, and down south means the good ol' USA).
Up here, healthcare isn't a privilege, it's a right, for every member of our country (who is legal, of course). And I hate taxes as much as everyone else, but everybody needs their health. Can you imagine for a moment that someone you knew, who had their insurance cancelled for whatever reason, was denied healthcare for an illness that could end up being fatal? I guess not, because if you did, you would think differently.
Peter Schiff is a moron, a cold-hearted capitalist that would see his fellow brother die and a complete a@#hole. People like him don't deserve to live or comment on healthcare.
I have no quarrel with universal health care. What troubles me is that President Obama urges the American people to support that idea without specifying what his "plan" is. I submit that by leaving the plan to the congress, he has done himself and the American people a misservice. If what he has done is called leadership, he's been leading us into a fog.
People laughed at Ross Perot when he used charts to explain his views. I think Mr. Obama would be far more persuasive if used visual aids (besides his almost omnipresent teleprompter) to explain to the American people, item by item, what he would like our new health care system to include, how he would like that system to be paid for, what changes would he like to see in the current private insurance programs, what would be the specifics of the government option.
If members of congress will hardly make it through the thousand plus pages of the legislation, why do they and the president think the people will take the time to struggle through it.
Sure, any explanation that the majority of my fellow citizens can understand will be a simplification, as would be most legislation. Still, we want and need such an explanation before urging our representatives to vote for or against what is being or has been written to date and what will be modified in committee when the House and Senate pass their own versions.
Mr. Obama's "change" only proves the French are right: "The more things change, the more they remain the same."
I agree those in Washington don't have a clue and clearly need a remedial course in problem solving. To solve a problem or to develop a remedy yoy must first define the problem and its causes. I don't see and have not seen one attempt at defining the problem or its causes only a lot of rhetoric and smoke. What are the real issues? Cost, availability and quality. What are the issues that are driving cost? Procedures, legal reuirements, malpractice insurance, system abuses and any others that must be considered. What are the issues tha limit availability? Who should have availability? Everyone, only those that want it, only those who can afford it, is medical care a right, an entitlement or service that is available to those that can pay. What quality of medical care should be avilable and to whom? Minimum level of health care, standard quality of health care that should be available and who makes that determination? These are all important issues, I for one am not comfortable with the way it has been approached by Obama and Congress. They have started from the position that health care is broken so let government take it over without addressing issues that are impacting the current situation like tort reform, cost issues etc. This appears to me as a power grab by this government and this administration simple and pure.
Why has not one health care analyst proposed a lifetime, per patient cap on exposure to HMO's, the overage to be paid by the Government? This simple actuarial change along with mandated centralized paperwork processing could immediately cut the cost of health care premiums by 30% or more. Why has this not been raised by ANYONE???????????????????????????????????
P.S. History has shown that we have experienced the highest rates or relative economic expansion during periods of highest marginal tax rates. I built three highly successful businesses when individual and corporate tax rates were at their highest.
Just keep one thing in mind…and you've probably not run a business in a lawless, poorly governed, and corrupt country, which I have…it's easy to talk like a libertarian when no one is shooting at you.
Dean Romano, dpromano@gmail.com
P.S.S. You give great advice. We share the same contrarian view of the economic world.
I also agree that taxes should be eliminated, period, but some form or central government is necessary to the security required to work in the safety we work in. So what's the answer? I agree wholeheartedly that taxing the wealthy will not prove fruitful. But doing nothing about health care, as we've done for 100+ years since it was first proposed, will KILL small business.
I laid off three 25+ year employees recently because they were very marginal and $2000/month health care premiums and $4.00 gasoline made them too much of a burden to a money losing operation.
Think how important reform is before you dismiss it entirely.
This dissertation on the author's abysmal ignorance of Universal Health Care is paramount in his article. Present health care premiums, employer/employee contributions to privete insurance plans that are being shovelled into profits for shareholders and bonuses for executive administrators. President Cartre once referred to this group as the Medical Mafia and these are the same groups that for whom Limbaugh and his likes in the Republican Party are fighting. Every G8 country has a Universal Health coverage which offers peace of mind to all of their citizens and this is to the detriment of the United States where Senate and Congress are still trying to interpret the Constitution and after more than two hundred years still haven't got it right. All men are created equal which means equal collection of taxes and equal distribution of taxes by Government; not by Insurance companies, shysters, or Senate and Congress slush funds. Gut the present system of Insurance carriers and have a Government run plan and although it may not create a surplus in spending, it will cost us less than the present system of loan sharking.
I understand this a money site, but maybe some people should discuss how this reform is a death sentence to all our elders. We work all our lives to one day retire, and enjoy the remaining years in our life. With this plan, they'll make sure those days are numbered. Absolute evil at work here people. If you don't know about this fact – go look it up.
Our health care system is terrible right now – obviously. I don't think anyone is really going to argue that.
But do we really need to go with the very first thing the government shoves down our throats? Do you buy the very first car you see? We need to reject this reform, and every other one that is poorly put together (and just as evil as this one). Maybe, one day, they'll use brilliant minds, instead of political ones, to actually solve the current health problem.
The debate over any specific policy, whether Healthcare, Auto bailouts/bankruptcy/takeover or banking misses the point.
Even the Democrats and Obama don't know the specifics, so how can they be argued??
Look at the Cloward-Piven strategy at work. Cloward was a 1960's liberal professor of social work at Columbia University. His vision was to destroy capitalism by overwhelming the beaurocracy with expanding entitlements! To accomplish this, he began a grass roots organization of the welfare community into the National Welfare Rights Organization.
Even conservative legislators are so busy swatting flies that they cannot think about putting up screens. Obama has been rushing through "emergency" programs one after another so rapidly, that even the Democrats aren't reading their own bills! They don't care, even as they vote away Congressional control to a beaurocracy of dictators/czars!
As a Canadian with the Socialized Medical system, is beneficial as a whole to the masses in general, there are too many people in US Citizens who are out on Streets, new immigrants, elderly etc. A nation who puts in trillion dollars of wealth to help investment houses and banks to be bailed out, should feel ashamed that they cannot take on simple responsibility of those who are less fortunate to be able to afford health. The cost and bureaucracy may increase. Do not let your politicians tell you the candian system does not work. Agreed it is not perfect, stop looking at miniscule failures and look at grander scheme of things. US has been dumb enough before to spend money in Vietnam, Afgahanistan, plus many earlier stupid wars. It needs time to introspect itself, and improve its own, heal within before looking out and focusing externally. US should not become a nation that ends up as " Emperor without clothes". You have far too many intelligent people. Stop listening only to the wealthy, listen to middle and lower america, and get some true picture and guidance. Obama, should show the US what the people in the lower levels of society have to work towards. Good luck and dont miss this chance. Where is Hillary baby and kennedys in the media, showing support for the program? Seems like the Democrats need to get the media's attention and show the benefits. Dont get bogged down in detail. Hope Obama vetoes this plan through, like TARP.
I like President Obama, why are you not agree with what he is doing?
This plan has good and weak parts. He should concentrate more on the good ones.
Healthcare costs have been inflating at 6-10% for years, and in the not too distant future, healthcare costs will be ½ or more of our economy, with obvious disastrous consequences. We have to do something.
In today’s environment insurance companies pay 35% of costs, the government pays 45% of costs, and with our regulatory system and the FDA, we don’t have capitalism. Our system allows the medical practitioner to reap huge profits from a captive customer base with little no competition. Healthcare workers compensation has been growing and is out of line to the rest of the economy. In today’s system, there is virtually no competition and today’s system is not capitalism!
So how do we fix this mess? There are a few choices.
The first is a radical free market approach that has not got a snowballs chance in hell of becoming reality:
1. Get rid of the FDA
2. Modify patent laws to prevent pharmaceutical companies from obtaining extensions.
3. Doctors, Hospitals and Pharmaceutical companies would operate unfettered by regulation, allowing for competition.
4. Implement limits on liability thereby reducing malpractice related costs.
5. If mistakes or problems occur let the buyer beware. Patients should have access to records enabling them to choose based upon quality and price.
6. Quit caring for those who cannot pay.
The second is also radical but it would not provide a free market but would offer significant cost reduction. So here is the second approach:
1. Set up a quasi-socialist system with competion from cooperatives or government insurance plans.
2. Import pharmaceuticals from the lowest cost location or country.
3. Reduce hospital and medical care regulations to the extent that we can agree.
4. Limit payments for services to hospitals and doctors
5. Pay doctors based upon results as opposed to the number of procedures performed.
6. Emphasize wellness and prevention to avoid future treatments.
7. Ration care for best benefit. In many cases expensive care provides little benefit.
8. Expand the VA system or something similar to allow for government treatment.
9. Encourage the use of other countries medical services for expensive procedures.
10. Set up a system that would send patients away from high-cost to lower cost providers.
11. Modify patent laws to prevent pharmaceutical companies from obtaining extensions. .
12. Implement limits on liability for medical to reduce malpractice costs, and the need for defensive medicine.
I realize that there is not a perfect solution, and you can pick and choose from these two lists. If you don’t like the points, make your own suggestions and help solve the problem. With the ~10% per year inflation rate, costs double every 8 years. Our current system causes this inflation and we can’t afford the outcome. We can’t ignore this problem.
Mr. Schiff's basic premise, that the plan currently being debated will increase costs, reduce coverage, eliminate jobs, and disincentivise small businesses from expanding is spot on. He does, however, completely miss the mark on one point – his apparent belief that an additional 5.4% tax on those with incomes above $1 million will actually make a dent in paying for the plan. Any idiot who actually reports income of more than $1 million deserves not only a 5.4% surtax, but an additional tax of FIFTY point four percent! Anybody intelligent enough to be earning more than $1 million per year had better also be intelligent enough to have set up a proper corporate structure to be minimizing his/her tax bill as well as protecting him/herself from personal liability.
And I commend JCC for hitting the nail on the head with several of his/her points. Specifically,
5. Pay doctors based upon results as opposed to the number of procedures performed.
6. Emphasize wellness and prevention to avoid future treatments.
11. Modify patent laws to prevent pharmaceutical companies from obtaining extensions.
are absolutely great ideas. Having had shoulder surgery last year not once, but twice to fix the same problem, I feel very strongly that doctors and other health care professionals, just like teachers, should be paid for RESULTS, not just for showing up and claiming to do something useful.
Valid points by the author:
I agree that an 8% tax on the payroll of businesses who do not offer health insurance would hurt many small businesses. Restaurants, for example, pay their tipped employees one-half minimum wage as each server is taxed 8% of their gross sales to account for their tips (implying that their tips amount to 8% of sales). The 8% which currently goes to the government comes directly out of the pockets of the tipped employee, which goes to the employer to cover the taxes in exchange for their cash tips. Hitting employers with an additional 8% in taxes on gross sales would very much hurt small businesses.
Increasing corporate taxes can indeed prevent jobs as employers have to pay the taxes which could have otherwise gone to hire more employees to fulfill the needs of an expanding business. Yes, I agree with Schiff that this could increase the amount of layoffs, especially for small businesses.
Invalid points by the author:
Claiming "unconsistutionality" is ridicious and the Schiff loses a lot of credibilty with me to suggest "unconstitutionality. If this was the case, then the entire tax code would already be unconsistutional; if specific social, non-economic demographic groups were targeted, then this would be a possible claim. Already there are income tax brackets established and this is already status quo. Has Schieff ever heard of progressive tax policy? "The rich" do not consistitute a suspect class. I am disappointed by Schiff to make such an outlandish assertion completely lacking knowledge in jurispurdence. Redistribution of wealth towards the rich from the poor and vice versa are part of economic policy making and have limited applicablity towards constitutional law.
It is absurd to believe that small business owners will somehow "just lose motivation" to expand their businesses as they reach the $1 million dollar income threshhold. That would be the case if all income over $1 million dollars were taxed at a 100% rate, but I seriously doubt that taxes are going to take the wind out of the sales out of any successful business. Market conditions will dictate what resources that business owners need to ensure the going-conconcern and success of their business, not the IRS tax code. While it could be argued that the tax penalizes businesses who are very successful, nonetheless it is also the playing field itself and the market, not just the innovation of the business owner who is responsible for the success. Part of being able to do business in the public square also means taking care of the public square, such as paying taxes to maintain the roads and in the minds of some, also contributing the health and welfare of the very society that they serve. Essentially someone has to pay the bill, and while it seems counterproductive to "penalize success", it makes even less sense to penalize and tax business failure, as those business failures have nothing to give anyway.
"Insuring more people will drive demand for healthcare services even higher." Actually the opposite is true. The greater the demand for any product or service initially can increase the price, but over the long haul the cost decreases. Consider consumer electronics: initial early-adopters pay premium prices, but as demand increases, so does cost too. As the cost goes down, the demand continues to increase even more. The reason why healthcare costs so much is that supply outweighs demand, because those very costs are so high to begin with, that fewer and fewer people can afford to pay the capital overhead costs associated with running the industry. Each incremental year in which fewer are insured, then all of those costs are passed on to the remaining smaller pool of those who remain insured, driving up health care costs. The more people that get insured, the lower the costs are as they are spread out over a larger pool of people to pay the same overhead costs.
Summary:
I think the idea should be to get as many people insured as possible, which is drive down health care costs, allowing even more to be potentially insurable. However I also think that caution needs to be exercised with not placing too much burden on business, especially small businesses which could cause many to fail and also lay off employees. In addition I think that the health care for-profit industry might need to be re-evaluated in terms of their political power (similar to the pharmaceutical industry) as I believe that as a political and lobbying force, that there may have been some price fixing or unfair business practices which are inconsistent with the common good. Just like child labor laws, free enterprise does not extend to monopolies and oligopolies, there are limits to how far that society will allow corporations to make multi-millionaires on the backs of the public square and our citizens without making contributions back to the playing field.
Health care is an-part a public accommidation, and just like transportation districts have an obligation to the areas and demographics that they serve, so might health care as a public accommidation and not only as a pubically-traded commodity.
Yet I also see in-part of going too far with seeing health care as only a public accommidation, and if everyone was insured at the same level, for every socio-economic group, then this would be outrageously expensive or would dumb-down the overall quality to make it affordable for everyone. Those who are not part of the workforce simply, or who are underemployed with transient jobs simply should not be afforded the same level of health care as those who are earned a greater quality of life. On this aspect, health care is also commodity to a degree as well.
I think that the two-tiered system that you stated about Australia is an example of embracing health care as both a public accommidation and also as an economically commodity. The lower tier is the public accommodation, the upper tier is the economic commodity. While liberals could deride this as a "two class system", in part is is and perhaps should be. Those who work should be rewarded; those who don't work should be given something out of decency, but not necessarily the same as those are more productive.
Schiff and others should also be stating their own alternative ideas, unless they already believe that no chances need to be made. Anyone can knock someone else's ideas, but it takes a lot more effort for them to have a constructive plan of their own too.
My .02 cents worth.
Sincerely,
Mark
Just as all other wealthy conservatives, Mr. Schiff is more concerned about his portfolio than the welfare of the American people. Does he offer any alternatives to President Obama's healthcare legislation? Uh, no. I believe it was a crime, dating back to the Nixon Administration, to allow insurance companies to profit from healthcare. Health care should NOT be a commodity to earn dividends for its shareholders. But, try and ween the insurance companies from the healthcare 'industry'. That is what we are really up against. It will take a miracle but a miracle is what we need!
Anyone who votes to tax health care benefits will be looking for a new job next year. Obama’s immediate jump to the center has cost him his relevance. The selection of Wall Street insiders Geithner and Summers and giving in to Wall Street was strike one. His support for continuing the Wars, protecting the War criminals and continued massive defense spending was strike two. Now his complete collapse in the health care debate is strike three. The republicans have kicked his teeth in and all he could do was smile, call for bipartisanship and offer to sing Kumbaya with them in the Rose Garden. When we desperately needed a tiger we got a pussycat.
The best news is that the proposal is geared toward reconciliation so it's a shot across the GOP's bow. I would be shocked if this bill didn't go to reconciliation and that is probably still the best chance to get better legislation.
President Obama's healthcare plan will only undermine our already weak economy.