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By Robert
#25697
Obamacare seems to be headed for trouble as insurance companies are dropping out and now there are ideas about coming up with a government insurance option. The message of the "market" here is Obamacare is failing and the government fix will be met with cries of government takeover of healthcare.

I have had an idea for a long while about how it should have been done in the first place.

Before getting into the details, I`ll tell you a little bit about myself. I have been dabbling in the stock market for a long time, watch CNBC every day the stock market is open. I have invested in stocks, read earnings reports etc. I`m not college educated, but very informed about corporate issues and market viewpoints IMO. I consider myself middle of the road and do not like politics and very much like common sense.

Even though I detest government intervention and their tax and spend behavior, I think we have to admit times have changed and the nation is getting more liberal in general and with the election of president Obama, we have collectively said yes to getting everyone healthcare as he promised when first running for the office. I`m also leaning that way, that healthcare should be available to all just like we expect basic necessities like food, clean water and clean air. However, I do not believe in "free" because nothing is free and free is always wasted as it is human nature to do so.

Identifying the Problems

Insurance Companies Issues: The basic problem/complaint by healthcare insurance companies is the people using Obamacare are more unhealthy than the average person and they are correct. This issue cannot be fixed leaving Obamacare as is. The answer is everyone must be in the "pool" in any system that works. My fix has that.

People Issues: The number one issue among those who oppose Obamacare is the individual mandate. People also dislike having to go to the website and have to chose insurers. People hate paying another monthly bill. People distrust government healthcare option idea being pushed now. My fix ends all that.

Employer Issues: Obamacare regulations resulted in employers cutting workers hours so they do not have to cover employees. There is also the "Cadillac Tax" issue to name another. Corporations need certainty so they can plan ahead and invest instead of holding back and waiting on what new expense they might get slapped with. My fix ends all that.

THE FIX

As previously discussed, what is required is everyone has to be in the pool, however it cannot be government run, so this is what I propose. What we need to do is change the system we have now completely for those not on Medicare (THIS PROPOSAL IS FOR ALL NOT ON MEDICARE). Children automatically covered. So this is how it works.

No More Choosing of Healthcare Insurers by Individuals or Corporations: Insurers get out of the business of selling healthcare policies and instead bid to cover a random demographic cross section of people so who they cover in this system are equally unhealthy. The government would hold the auction, but not be in the healthcare business, just pay the insurers depending on how many people they cover. I would propose that the nation be divided up into coverage regions so smaller insurance companies within a region can bid to cover people within that region. Lowest bidder covers more people and potentially gets more profit and market share. Who your insurer is is irrelevant. All insures will be required to cover exactly the same, pay doctors and hospitals exactly the same. A level playing field. What will happen longer term probably is the most efficient insurers will get bigger and the less efficient will get smaller or get bought out leaving probably only a few big insurers, but that is capitalism and costs go to the lowest level possible, much lower than the government could run it.

Coverage Requirement: I propose federal coverage not be an expensive "Cadillac" plan but be on the level of an Obamacare Bronze plan. These plans have co-pays and deductibles. A standard and automatic plan for all will be decided on. Basic coverage, but still leaving the individual with some responsibility. You only need a Social Security number and ID when you go to the hospital or doctor. The hospital or doctor will log in to a government website with your SS# and what should pop up on the screen is a picture of you and your federal deductible and copay will be displayed. That is what will be covered on the federal level.

Unanswered Questions: What happens to Medicaid? What do people do about the say $5,000 deductible if they cannot afford it? Right now Medicaid is a joint venture between the federal and state governments. Details can be worked out so a similar burden remains for what the state is paying now. Medicaid is transformed into supplemental insurance which pays deductibles and possibly copays for the poor. So for those on Medicaid, no change except now they can go to any doctor they choose. This covers the basic idea, now on to some details.

Subsidies

With Obamacare, subsidy drops as your income rises. I propose this basic idea remains in place. There will be some subsidy of your deductible and possibly copay depending on your income at the federal level. Beyond that coverage, it`s up to the state you live in on how much they want to chip in to cover the deductible and copay. YOU HAVE THE OPTION TO BUY SUPPLEMENTAL INSURANCE and is not mandated. You see what deductible you have with the federal government and see what the state will chip in, then YOU DECIDE if you want or need some supplemental insurance. States that have opposed Obamacare would probably find this acceptable.

Funding and Taxes

Employer Healthcare Tax: Obviously taking this great burden off of employers is very costly and there are questions about how it`s paid for. First to be clear, there is no free lunch here. Employers who have collective bargaining agreements to provide healthcare to their employees with be required to maintain the same level of coverage (buy whatever level of supplemental insurance needed to maintain contractually agreed to coverage). Since the federal government would be carrying the lions share of healthcare costs, a tax on employers must be imposed to make up for it. I would also propose a unique method on imposing this tax due to the fact the way technology is changing the need for employing people as time goes by (less people needed to do same work). With this tax, companies reimburse the federal government depending on how many employees they have, however what about companies who are highly profitable yet only need relatively few employees vs the average company? We should consider an additional tax based on gross profit on companies well outside of the norm of gross profit/employee. I think this is fair as some types of businesses are labor intensive, so healthcare costs are high for those businesses, yet what about the likes of a high tech business that makes tons of profit yet their business model only needs few employees? They can afford the tax.

National Healthcare Sales Tax: If needed to cover some of the cost of this fix, I propose a national sales tax. I think this is a smart tax in that it can help tax part of the "underground economy", those who work or employ off the books. When these untaxed dollars get spent, then they will at least pay into the healthcare system. Besides, nothing is free. We would see we are paying for healthcare at the register, a reminder it is not free. I would consider some basic food and clothing items be excluded from the tax so the poor get hit less. Maybe used cars under $5,000 too (you get the idea).

Corporate Taxes: Aside from the healthcare issues there is a corporate tax issue. The U.S. has the highest corporate tax rate among nations. I have heard the arguments from those opposed to lowering it about the "real" tax rate being much lower and see some say "nobody pays that 35% rate", so I would argue back, "well if nobody pays that rate then why are you opposed to lowering it?" On the other side of the coin so to speak is when you hear reports about companies pencil whipping their way into a low tax rate and you hear the cries of people saying or politicians promising to cut out the loop holes, yet nothing happens. We need fairness, we need a more level playing field for businesses and we need more certainty for businesses. We should pass corporate tax reform along with healthcare reform in the same bill so these big items of cost uncertainty for business are resolved. I would propose we set a MINIMUM CORPORATE TAX RATE in addition to lowering the top rate. A formula to make sure businesses do not weasel their way out to a very low rate with the loop holes. Maybe limiting carry over losses among other things. Try to get the range 15% min to 25% max. No way promises of cutting loopholes will ever come true. Those breaks were fought for by lobbyists and they will keep them, but we can limit their value by squeezing how low any company can cut their tax in any given year using a minimum tax formula.

So there it is. Simple for people. You do nothing other than file your income taxes and you have healthcare. Based on your income your deductible and copays are decided. You decided if you want or need supplemental insurance to cover some or all exposure you have to your deductible. No need to worry about which insurer has bid to cover you because they are all the same in coverage and you are not involved in paying them directly. What do you think?
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