This is the final post in the series, Healthcare: Yes We Can.....But We Probably Won't.
PAYING FOR SINGLE-PAYER UNIVERSAL HEALTHCARE
There are approximately 306, 902,000 Americans living in 111,162,000 households (2007) as of July 2009. (census.gov) The average family healthcare plan premium ranges from $10-13K annually (including employer contributions), making private healthcare cost $1.1-1.5 trillion in premiums if everyone in the United States was covered under a private health insurance family plan.
Handing over $13,000 health insurance vouchers to every American family would undoubtedly be the simplest and fastest way to reform healthcare. It wouldn't be the cheapest option, nor would it be the best, but we could have healthcare reform as soon as they could cut the vouchers. The most difficult aspect would be preventing fat political fingers from filching the funds. Remember what happened to Social Security?
Since private health insurers spend around 36% of their budget in administrative costs, and government-run programs spend 1-3% in administrative costs, we may even be able to trim the cost of single-payer universal healthcare by at least 30% or more, making the cost $700 billion-$1.05 trillion. And since over 300 million people make one hell of a risk pool, the actual cost would likely be even lower.
The scariest part about single-payer healthcare appears to be funding it. No one wants to pay more than they already do. Listed below are several options for financing single-payer universal healthcare. All figures are listed as revenue, savings, or estimated.
All amounts are annual figures. The total exceeds the estimated annual cost of single-payer universal healthcare. There is no additional cost to taxpayers.
REALLOCATION OF GOVERNMENT HEALTHCARE FUNDS
Our government already finances 60.5% of healthcare spending in the US, including tax subsidies for private insurance totaling $188.6 billion in 2004, and $120.2 billion--24.7% of total spending by US employers for private insurance--to pay for private insurance for public employees (teachers, police, etc.). This amounts to 9.7% of the country’s 2005 Gross Domestic Product(GDP). Medicaid spending in 2007 for 49.1 million people (up to 61.9 million people--or 1 out of every 5 people in the US--for part of the year) was over $300 billion, and Medicare spending totaled $440 billion in 2007. These funds would be reallocated to a trust for the purpose of funding national single-payer health insurance.
REVENUE: $2.4 TRILLION ANNUALLY
END TAX CUTS FOR THE WEALTHIEST
Tax cuts for the richest 10% of Americans totaled $116 billion in the 2009 fiscal year. This amount is enough to pay for one year of Medicaid for 34,365,274 people.
SAVINGS: $116 BILLION ANNUALLY
REQUIRE EMPLOYER CONTRIBUTIONS
Many employers offering health insurance already contribute a portion of employee healthcare premiums. It is difficult to find figures on this data, so the revenue below is based on available figures. (170 million people covered by private health insurance, divided by 3 to estimate total plans, multiplied by $13,000 cost of family premium, divided by 2 to make average employer contribution 50%). The cost to employers would be less than they currently pay, with the exception of employers who don’t pay anything or don’t offer health insurance. To ease the burden for small businesses, those who met employee limits and income caps would qualify to contribute on a sliding scale.
REVENUE: $370.5 BILLION ANNUALLY
INCREASE FEDERAL ALCOHOL TAX
The Economic Research Service of the United States Department of Agriculture reports that in 2003, retail sales of alcoholic beverages totaled almost $116 billion. Medical costs of underage drinking costs the US $5 billion annually. (bmi.com) Annual alcohol related medical expenditures for the US total approximately $22.5 billion (the social cost of alcohol totals well over $100 billion). (marininstitute.org) According to taxfoundation.org, the federal tax on beer is now approximately $1.72 per gallon. Adding a federal alcohol sales tax of 25% would raise $29 billion annually using 2003 sales figures; this would result in a $10 6-pack of beer costing the consumer $12.50. A 10% tax would raise $11.6 billion annually. Similar taxes on liquors, wines and other alcoholic beverages would bring in even more revenue. The argument against soft-drink taxes is echoed here, and this tax would disproportionately affect the poor. However, the arguments for the tax are also echoed here, in that the poor would disproportionately benefit from the results of the tax.
REVENUE: $29 BILLION ANNUALLY
TAX SOFT DRINKS & SNACK FOODS
In 2001, soft drink companies grossed $57 billion in US sales (westonaprice.org). The commercial snack food industry, encompassing candy, chocolates, salty & sweet snacks and frozen sweets sells over $75 billion worth of products in the US every year(answers.com).
**Levying a 25% sales tax on soft drink sales would provide the US with nearly $14 billion in revenue to help pay for a single-payer healthcare plan. Charging an excise tax of $0.25 per 12OZ would provide $28 billion (cspinet.org/liquidcandy). Taxing calorie-laden soft drinks has the additional benefit of encouraging consumers to make healthier choices. Non-diet sodas have been directly linked to obesity, which costs the US over $45 billion annually in Medicare/Medicaid expenditures, and an equal figure in medical expenditures paid by insurance companies and residents. One argument against taxing soft drinks is that it would disproportionately affect the poor, who tend to drink more of these beverages. However, the poor would also disproportionately benefit from the programs the tax is funding. To be most effective, the excise tax would be applied at the distributor level and built into the price of the product, and the sales tax is levied at the point of sale. An argument exists for exempting diet sodas from the taxes, based on the fact that the link between diet soda and obesity is weak. However, the artificial sweeteners used in diet sodas are known to certain states to cause cancer in laboratory animals, and it logically follows that these substances may also contribute to cancer in humans. Diet sodas have no nutritive value, and there fore, the tax should be levied on them as well. If we apply similar taxes to snack foods, the US would stand to generate nearly $19 billion in annual sales tax alone. It is difficult to accurately calculate the annual snack food excise tax revenue due to the diversity of products and product sizes.
**The statement enclosed in asterisks is based on soft drink revenue figures provided by cspinet.org and may differ from other figures given in this post.**
REVENUE: $61 BILLION ANNUALLY
LEGALIZE & TAX MARIJUANA
In 2004, incarcerating pot prisoners cost the US over $1 billion every year according to the US Department of Justice‘s Bureau of Justice Statistics; the report was unable to account for the number of county and local prisoners incarcerated for marijuana-related offenses in each of the 50 states, so that figure is almost certainly significantly higher. Close to 1 million Americans are arrested on marijuana-related charges every year--nearly 900K Americans were arrested on marijuana-related charges in 2007--leading to over $8 billion annually in criminal justice costs. (alternet.org, from a Washington Examiner article)
In 2006, the federal government estimated domestic marijuana production to be approximately 10,000 metric tons (22 million pounds), at a conservative estimated value of $35.8 billion. (drugsense.org) This exceeds the combined total value of domestic corn and wheat crops, making marijuana the largest and most lucrative cash crop in the US. In 2002, the National Survey on Drug Use and Health reported that annual marijuana users had increased to 25.7 million.(drugscience.org) Other estimates are as high as 60 billion America marijuana users; total sales revenue from marijuana is estimated to be $40-100 billion. (businessweek.com) A sales tax of 25% would bring in $12.5 billion on sales of $50 billion. Per unit excise taxes could bring in an additional $8.5 million or more, based on a unit price of $30 and a $5 unit tax.
REVENUE: $21.5-42 BILLION ANNUALLY
END THE WAR ON DRUGS
The War On Drugs is expensive and doesn’t work. Currently, the US federal government is spending over $20 billion annually, with another $30 billion + paid for by the states. As around 45% of all drug arrests in the US are related to marijuana, ending even the marijuana related portion of the War On Drugs would enable the US to recognize significant savings that could be applied to paying for a US single-payer healthcare plan.
SAVINGS: $33 BILLION ANNUALLY
TOTAL ANNUAL FUNDING: $3.009 TRILLION
Additional ideas for generating revenue or savings without additional cost to taxpayers include:
END FOREIGN WARS AND POLICE ACTIONS
While spreading democracy is an admirable goal, America is not Constitutionally obligated to do so. America is Constitutionally obligated to “promote the General Welfare”, which we currently eschew as a country. Removing our troops from foreign conflicts not directly threatening our country and refraining from entering these types of conflicts in future could save hundreds of billions of dollars and more in the long run. Bringing our troops home to defend our borders and airspace would make us much safer as a country than occupying foreign territory--where our very presence places innocent citizens at risk--and would improve our overall global image. Countries requesting American assistance and intervention would be responsible for footing the bill for costs. American troops would continue to participate in conflicts when deemed necessary by the UN.
ESTIMATED SAVINGS: $114 BILLION ANNUALLY
LEGALIZE INDUSTRIAL HEMP
Legalizing the production of industrial hemp would also provide a source of funding. Industrial hemp does not contain enough THC to be used as a drug, is easy to grow in all 50 states, grows to full maturity in 100 days and requires few, if any, pesticides. The hemp plant produces materials that can be used in environmentally friendly textiles, bio-fuel, paper, plastics, paints and varnishes, lubricants, building materials and provides protein and essential fatty acids as a food source. Hemp can even be used to cleanse impurities from wastewater, and is being used to clean contaminants from the Chernobyl site. The multiple uses for hemp from each part of the plant gives hemp a greater value per acre than other sources for those products combined. In addition to its uses, industrial hemp is agriculturally beneficial as a significant rotation crop which can boost primary crop yields, and as a weed killer for organic farmers. 10K acres of hemp will produce as much paper as 40K acres of trees. Legalizing and taxing this industry, or legalization and government would provide another source of funding.(votehemp.com)
ESTIMATED REVENUE: $20 BILLION ANNUALLY
END TAX CUTS FOR COMPANIES THAT OUTSOURCE JOBS
Ending tax cuts for companies that outsource jobs to foreign workers would bring in revenue from the actual tax lost and from taxes paid by newly employed American workers.
ESTIMATED REVENUE: $50 BILLION ANNUALLY
TOTAL ADDITIONAL FUNDS: $184 BILLION ANNUALLY
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Farleftside
MeatMonkey
Dr William Lee
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Mike Lucier
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Salon.com
Comments
It would also be the least effective. It would do absolutely nothing to stem the rising cost of health care. The for-profit insurance companies would undoubtedly raise premiums and/or cut benefits so as to protect their obscene profits. Just providing a method for uninsured or under insured Americans to buy into the present scheme (which is more about profits than about health care) seems lik a giant step in the wrong direction.
Myriad: Excellent solution. I approve! After all, many have died from the practice of cancelling a policy following an expensive diagnosis. What's good for us is good for them...
Wayne: I completely agree with you. I wasn't advocating private health insurance vouchers, not by any means. I believe that single-payer universal coverage is the only way to go, and that's what all that revenue is supposed to pay for. Unfortunately, I wasn't able to fit my entire proposal into a single post, so it's broken up into six (one of which is missing, it details the single-payer system proposal, so I need to get it up).
poor america! can't figure this out, do you suppose it's genetic?
2) No need to reinvent the wheel as there are plenty of systems abroad that cost half of what we are paying and produce better results. So just pick one and write the bill and pass it. Forget bipartisan - just ram it through.
3) Keep in mind that any Rep or Senator who votes NO on a bill that is sure to save thousands of American lives each year is not worthy of his/her hire.
Don't tell me it costs too much unless you want to put a price on each life you would be responsible for ending.
If the Neocons are disappointed perhaps their rich friends can pension them off and finance their retirement elsewhere. Lord knows we don't need the Fascist bastards here.