Numbers Games and Health Care

There are some numbers in the health care reform proposal that should be debated but are not even part of the discussion. The idea of universal coverage is that everyone who is not already insured will be required to purchase insurance. Since employer-provided insurance is cheaper than individual insurance, the government will assist those families that need help. The issue is at what level will we provide help?

First, remember that the actual poor are already covered by Medicaid. The people we are talking about are employed and making good wages. The earnings levels I have seen suggested are $66,000, $88,000 and $110,000 per year for a family of four. To put it into perspective, I checked the census data for 2006 (the most recent available). If your family makes $110,000 per year then you are in the top 20% of wage earners. 80% of the country makes less than that but that 80% will be expected to help you pay your insurance. Think about that for a minute.

Now think about this - what happens if the percentage of families buying their own insurance goes up? What if people decide that they will take the amount that their employer now spends on insurance as pay then uses that plus government assistance to buy their own insurance? Is it possible for everyone to subsidize everyone? Picture a large group of people in a circle. Each one is to take $100 dollars from his pocket and put it in the middle. Then, everyone takes $100 out of the middle. By government reasoning, everyone will be $100 richer.

It's all a numbers game, shifting money from one pocket to another.

The other numbers game is one that has been suggested but dropped. Obama has insisted that he will not sign any bill that is not revenue neutral. That means new taxes on someone. The original suggestion was to tax "gold-plated insurance benefits". The implication is that the government will decide how much health care you need. If you get less then you will be fined. If you get more then you will be taxed (a form of fine).

So who gets the gold-plated benefits? You might assume that they go to the rich. While it is likely that top executives get pretty good insurance, someone who is making $20 million a year isn't really worried about whether his co-pay is $10 or $20. It turns out that the group that would be hit hardest by this new tax is union members. The proposal to tax benefits has been quietly dropped with no word on where the new taxes will come from.