Are There Alternatives to the Individual Mandate in the Health Reform Law?
Are There Alternatives to the Individual Mandate in the Health Reform Law? by Howard Gleckman
My response:
If mandates go, pre-existing condition reforms must also be repealed unless the goal really is some form of single-payer insurance – which it may be. Such a scheme would still utilize insurance companies as claim processors, but without the requirement for a sales force of agents or loss prevention specialists (who would become fraud investigators instead). These activities would also mean a gauranteed profit, so the companies may be crying all the way to the bank.
I suspect that instead mandates and pre-existing rules will be repealed and replaced with a fairly robust public option available to anyone who can’t afford private insurance or who can’t get it due to a pre-existing condition. It would be low cost on the premium and copay side, but would be subsidized by a non-avoidable payroll, VAT or VAT-like business income tax.
The other alternative is Single-Payer Catastrophic insurance, however I don’t think the vast majority of voters would support any effort to deprive them of the comprehensive insurance they have grown to rely upon, even though that approach is largely, but not solely, responsible for increased cost.
The real projected problem is demographic – so the solution must be as well. You need to broaden the base of whatever levy covers health care and ideally you should consolidate them into a single tax rather than dividing funding between income taxes, premiums and payroll taxes. Options for this include getting more taxpayers by either immigration or childbirth (or a combination of both of these), extending the levy on non-wage income in the HI payroll tax to all wage earners, not just the rich, or converting the whole payroll tax to a straight up consumption tax on either consumers (a VAT) or employers (a VAT like business income tax on all employers and all value added, including wages). Even with a broader base, rates must go up – although increasing the payroll tax by 65% is only making it 5% of income – up from 2.9%.
If the Business Income Tax covers all federal social spending, including education, housing, TANF and health it will be considerably higher than 5%. It will be more like 28% before raising it high enough to also include an expanded the Child Tax Credit (of $6000 per year so that it includes enough for housing) and the Health Insurance Exclusion, in which case the rate is closer to 34%.
My response:
If mandates go, pre-existing condition reforms must also be repealed unless the goal really is some form of single-payer insurance – which it may be. Such a scheme would still utilize insurance companies as claim processors, but without the requirement for a sales force of agents or loss prevention specialists (who would become fraud investigators instead). These activities would also mean a gauranteed profit, so the companies may be crying all the way to the bank.
I suspect that instead mandates and pre-existing rules will be repealed and replaced with a fairly robust public option available to anyone who can’t afford private insurance or who can’t get it due to a pre-existing condition. It would be low cost on the premium and copay side, but would be subsidized by a non-avoidable payroll, VAT or VAT-like business income tax.
The other alternative is Single-Payer Catastrophic insurance, however I don’t think the vast majority of voters would support any effort to deprive them of the comprehensive insurance they have grown to rely upon, even though that approach is largely, but not solely, responsible for increased cost.
The real projected problem is demographic – so the solution must be as well. You need to broaden the base of whatever levy covers health care and ideally you should consolidate them into a single tax rather than dividing funding between income taxes, premiums and payroll taxes. Options for this include getting more taxpayers by either immigration or childbirth (or a combination of both of these), extending the levy on non-wage income in the HI payroll tax to all wage earners, not just the rich, or converting the whole payroll tax to a straight up consumption tax on either consumers (a VAT) or employers (a VAT like business income tax on all employers and all value added, including wages). Even with a broader base, rates must go up – although increasing the payroll tax by 65% is only making it 5% of income – up from 2.9%.
If the Business Income Tax covers all federal social spending, including education, housing, TANF and health it will be considerably higher than 5%. It will be more like 28% before raising it high enough to also include an expanded the Child Tax Credit (of $6000 per year so that it includes enough for housing) and the Health Insurance Exclusion, in which case the rate is closer to 34%.
posted by Michael Bindner at 12:20 AM
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