This is the place for all kinds of brainstorming. Anything goes. From time to time, the Sea of Chaos might also give birth to new forum categories.
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?
By Robert
#25994
Here is my updated version:

Statement of Intent Regarding Proposed Changes to Current System

To take a common sense approach in which affordability and fairness are paramount. Both businesses and consumers will make their contributions to pay for healthcare based on ability to pay.

To keep healthcare on demand and with same standard of care as in current system. However, insurance companies will be required to make changes to their business model (explained in summary). This proposal is NOT a government takeover of healthcare.

To convert entire private healthcare system (Medicare and Medicaid excluded) to the new proposed system. This conversion will result in a modified single payer system that is funded by the Federal Government without a requirement of contribution by state governments.

To achieve true universal healthcare. All those not on Medicare or Medicaid (or other government program not converted) will be automatically enrolled. No sign up required.


Summary of Proposed Changes to Current System

There are NO insurance company premiums for individuals:

Individuals pay by means of a deductible based on taxable income directly to the Federal Government. Also, a new Federal Sales Tax is required. The deductible is calculated as 10% of income minus the current threshold to qualify for "Obamacare" (about $17,000) for most states. For example: A single taxpayer with taxable income of $50,000 would have a deductible of about $3,300 (50,000-17,000=33,000 x.1=3,300). For those filing taxes jointly (family plan), incomes from both spouses are combined and divided by 2 to determine family deductible. The income subject to the deductible calculation is further reduced by $7,500 for each dependent. The deductible is firm, no help with coverage until full deductible limit is paid out of pocket. After the deductible, full coverage including prescription medicine. The new Federal Sales Tax can have exclusions for basic needs such as unprocessed foods, clothing under $50, used cars under $5,000, etc. to prevent a burden on the poor. This deductible level is affordable and fair. The percentage rate of the new National Sales Tax needed is yet to be determined. A rebate of the National Sales Tax for those on Medicare is needed since this system is not benefitting them. When a tax payer on Medicare is filing federal taxes, allow the first $20,000 of spending subject to the National Sales Tax be rebated or for those taxpayers not keeping records, an option to claim a flat amount.

There are NO insurance company premiums for businesses:

Instead, businesses pay a new healthcare tax to compensate the Federal Government as the Federal Government will be paying all healthcare premiums directly to the insurance companies. Here are the principles of this new tax:

1. Businesses will be means tested as to how much of the new healthcare tax they can pay (a formula to be determined).

Unprofitable businesses will not be charged the tax. Also, an amount of taxable income will be excluded (to be determined) from the tax so that very low profit companies pay little or none of the tax.

2. A maximum limit shall be set for the new healthcare tax.

In the spirit of fairness, determine which of the biggest businesses in the S&P 500 pay the highest average amount of effective federal tax rates and health insurance costs combined. Set maximum rate for the new healthcare tax so that a few of the companies with the highest federal effective tax rates pay somewhat less under the tax than they pay in healthcare costs now.

3. A minimum level shall be set for the new healthcare tax.

In the spirit of fairness, determine which businesses are paying an unfairly low amount of federal income tax. Some very profitable businesses find too many deductions to lower their taxable income (loopholes and other tax maneuverings) and thus pay an unfairly low level of federal income tax. To achieve a more fair level of taxation, an agreed to formula is needed that results in a standard that more fairly compares federal effective tax rates among businesses before charging businesses the minimum level or more of the new healthcare tax. Create a calculation within the new healthcare tax that lowers the value of some excessive deductions to taxable income, then charge a business a relative amount more of the new healthcare tax that is found to have excessive deductions.

4. Set minimum and maximum levels so that businesses collectively pay slightly more in the new healthcare tax than they collectively pay now in healthcare costs.

In summary, the new healthcare tax for businesses is an add on flex tax that is calculated after federal income taxes are figured the same way as now. The calculation of this tax examines a business federal effective income tax rate under current law and ability to pay. It is intended to both collect the required business contribution to pay for healthcare and to a lesser extent result in a more fair level in business taxation.

Interaction between Federal Government and individuals:

No enrollment required. Individuals use their Social Security number when accessing medical services (your SS# is essentially your policy number). All healthcare providers and pharmacies will be integrated into the system via government server. Individuals will be advised of current balance and deductible remaining when using healthcare services and purchasing prescription medicine and be billed directly by Federal Government based on deductible owed. If bill is unpaid, doctors and hospitals continue to be paid by insurance companies as premiums for all individuals have already been paid in full by the Federal government and the deductible is what the Federal Government charges based on income. Unpaid deductible is an unpaid debt to the Federal Government, not the insurer. The Federal Government must impose a requirement to pay and set up a billing system that automatically opens an account that charges low interest and monthly payment schedule when an amount due is not paid in full. If non payment continues, harsher course of action will be needed (deduct directly from employee pay, confiscate up to 50% of tax refund, or actions similar to what IRS does to collect unpaid taxes). There is no interaction between individual and insurance company, no more being caught in between. Each individual, including children, will be assigned an insurance company once per year. No company is "better" than the other as they will all provide identical coverage and identical payment for a service rendered. Any disagreement about who owes what is between insurance company and provider only. System will have to be "smart", being able to identify individual at point of access, not just by SS number to prevent fraud.

Interaction between Federal Government and insurance companies:

A competitive bidding process to obtain market share shall be established for insurance companies by the Federal Government. Also, a standardized coverage is established and agreed with insurance companies (a committee representing all insurance companies) so that all insurance companies pay equally for the same service rendered nationwide. This is not to cheapen coverage, just to create a uniform system and level playing field, to commoditize and quantify what a unit of coverage costs nationally. The agreed to unit of coverage must have the same standard of care as current and meets all "Obamacare" essentials, a high quality "Standard Plan" for all. When insurers bid for market share, they bid a price for each unit of coverage. Unit defined: A Standard Plan for an individual within a demographic slice of the population of the over 200 million not on Medicare or Medicaid. Insurers are assured individuals assigned to them are a representative sample of the population (including geographically diverse) and therefor no more or less expensive to insure (a government computer program necessary). Lowest bidders assigned largest market share accordingly. A rules based bidding process is necessary that does not cause wild fluctuations in market share year to year (too disruptive for insurance companies). Bidding process held once per year. All insurers cover equally and pay equally in a unified system thus simplifying payment to providers (all are also equally appealing to doctors and hospitals). Insurance companies are no longer in the bill collection business as the Federal Government has taken on that role. Insurance company role remains to detect fraud and battle providers demands for higher payments and pay providers for services rendered. Initially, a cap on net profit should be set for insurance companies based on the historical industry mean. Allow insurance companies to keep 50% of fraud recovery so they are incentivized to find fraud, even if the amount recovered causes net profit to exceed cap. In time, possibly put requirement on insurance companies to drive down costs, then after maximum efficiency is achieved, limit increases in spending to inflation rate. Consider reducing insurance company profit margin limit in time, but not causing any to exit the business. Once legislation is passed, time will be required for healthcare and insurance companies to merge. All insurance companies will convert into one type (PPO) and each will be able to participate nationwide. For maximum efficiency, possibly only a few very large insurance companies will exist eventually. The idea here is to eventually end up with a system where the portion that is administered by insurance companies is run at lower cost and higher quality than could be done by the Federal Government.

Review of New System Funding

1. New Tax on Business to Compensate Federal Government.

Currently, we have an employer based system where employers bear the biggest burden to pay for healthcare in the private market. Our existing system is essentially a tax on business. This proposed system simply formalizes this hidden tax as an actual tax and therefor produces no sudden change and no need for doomsayers to howl about disrupting the economy. The total amount collected in this new healthcare tax from business should be slightly more than is paid collectively by business now in healthcare costs. This proposal shifts some burden off a few companies with the highest overall burden in healthcare costs and taxes and causes the lesser burdened to pay more in taxes resulting in a more level playing field. This also speaks to the future of employment in general. As automation occurs some think huge job loss in inevitable in time and more people will have no employer based coverage. Also, during recession, there is all the more reason to cut head count if you are a business paying healthcare based on how many employees you have. Under this proposal, the tax is based on profitability. The tax goes down during hard times for business, so it must collect more than businesses currently pay collectively in healthcare premiums during non recession times. As corporate profits rise over time, more tax is collected to pay for healthcare.

2. Payment by Individuals to Federal Government When Healthcare Services are Accessed (Deductibles).

The Federal Government becomes middleman (payment collector as well as market share assigner for insurance companies). It also sets what is to be paid for services rendered to the individual as it bills against the deductible. I suggest when an individual uses medical services, they be charged what is now the average list amount charged by providers on the invoice, not the lower "allowed" or negotiated amount that insurers now allow to providers, then charge against an individual`s deductible. Often there is a 50% or greater amount difference between what the provider lists as the charge and what the insurance company actually agrees to pay. This would mean the Federal Government is essentially making a profit while an individual is paying their deductible. A high income person using medical services will tend to contribute more than average in this system. A low income person using medical services will tend to result in losses in the system for that individual (because their deductible will be small).

Regarding prescription medicine, passage of legislation such as this presents an opportunity to address the prescription medicine cost issue at the same time. In this proposed system, purchase of prescription medicine counts against an individual`s deductible. It would seem appropriate that the Federal Government could also act as middleman between consumers and drug companies as the proposed system already has guaranteed payment for prescription drugs as well as healthcare premiums. Like the above charging a higher rate than the "allowed" rate against the deductible for healthcare services rendered, consider same idea for prescription medicine. Many commonly prescribed generic medicines are very inexpensive. Consider charging more than cost for those to help level out prices overall. In a unified system such as proposed, there should be leverage to lower drug prices.

3. Proposed New National Sales Tax.

With businesses paying about the same share of the national healthcare bill as they do now under this proposal, a way has to be found so the same current share for individuals is paid by individuals. Since this new system has no sign up or premiums, the only way to collect the required amount would be through a National Sales Tax. Whatever amount is currently being paid collectively by individuals now should be figured to calculate what rate the National Sales Tax needs to be (after factoring in amount predicted to be collected from deductibles). This new tax should consider the burden on the poor and exempt purchases like unprocessed foods, clothing under $50.00, used cars under $5,000, for example. Again, no need for doomsayers as collectively the population is going to contribute about the same as they are paying now towards healthcare. In fact it is MORE FAIR because of those who refuse to buy healthcare, yet if they get injured or sick they show up at the hospital anyway and cause a burden on the system. This way everyone pays something and the sick pay more than the healthy, which is fair.

System Financial Mandate

The new system shall be mandated to break even over time so as not to add to the national debt. Whoever is appointed to oversee the system should be given a "tool box', authority to adjust the new tax formula on business or National Sales Tax or charges for medical services rendered within the deductible as needed to assure break even mandate over time. The new tax formula will collect less taxes during recession, so system must run surpluses during nominal periods for GDP.

Commentary

There are many positives to this system. It is simple for consumers as they no longer have to choose a plan. It makes healthcare more affordable for those who make just enough income where they get no subsidy within "Obamacare." For those who never save any money and live paycheck to paycheck and are forced to use credit cards to pay their healthcare costs, a better alternative. It brings about reform like change to the health insurance industry that results in efficiencies and therefor cost savings.

Recently, President Trump has remarked on how some corporations are not paying enough tax. Implementation of a proposal such as this presents an opportunity to increase tax burden on companies that find a way out of paying their fair share of taxes. This proposal should have at least some appeal to both sides of the aisle and if is not possible to be passed in legislation, perhaps components of it, such as health insurance company reform, can be considered. Thank you for reading this proposal.
OFFSHORE
Finger Wheel Fidget Toy

A three inch wheel with rubber grip on the outside[…]

Makeover of backyard

Nothing to share but I definitely want to see the […]

Sticking Games

No fantasy but real sports. Professional level foo[…]

This must be very useful information. Thank you ve[…]