Why we need a health care tax
By Steven Scarfo / Scarfo and Company CPA’s
There is a great debate on our current health care that the system should work. I say it is broken. Why should people wait until they are 65 to get great socialized medicine? A typical person on Medicare pays a little over $100 per month per person for great coverage. Under this plan, the government pays 80% of the doctor or hospital bill and the individual is responsible for the rest. For a very low premium a person can buy a supplemental plan to cover most of the shortfall. I do not see very many US citizens complaining about how this works. It has been around for over 40 years.
I was surprise when the Affordable Care Act was passed. This was a health care bill to help to cover the poor. Unfortunately, it is too complicated and is not sustainable. Also, it discriminates against the non-poor who would like a better price on health care insurance too.
I have prepared a great number of tax returns. Some of my clients are poor and some rich and some in between. Over the past two years I HAVE THE AVERAGE HEALTH CARE PREMIUM INCREASE OF OVER 10%-20% PER YEAR. IN SHORT SOME OF MY CLIENT’S ARE PAYING UP TO 40% more for health insurance coverage. In addition, for those on Obamacare, many have seen their relatively small premiums increase by over 50%. Some of the insurers have actually left the marketplace for providing health insurance under the Affordable Care act.
So where is this going? Even if the government kept the programs the way they are, eventually these plans would fail. Also, the unfairness to increasing premiums across the board for both poor and wealthy seems very unfair. So we get to the crutch of the question. Why leave things the way they are?
The answer it is time for a change. We need a health care system that covers everybody. We need a system that we can control the rapidly rising cost of medical procedures. Currently, we are spending two to three times more than most countries for the same medical procedures. We pay more than double for prescriptions. Why is this? Free enterprise and free markets? The lack of government control on fair pricing? Look at an example such the Epipens. Some companies do not have any resonable ethics and charge whatever they can get. Sometimes even to the point of pure greed.
Unfortunately, many of us did not choose our parents or our genes. Some of the medical attention we need is not our fault. Some of the medical problems are self-inflicted. I understand that there can be no free lunch. But the pricing for medical care should be universally set with a sense of fairness for both consumer and the provider. At least Medicare tries to place some limits on pricing. However, for people not on Medicare, anything goes.
Now to get to the point. If we had a 3% medical health care tax on w-2 wages and earned income, with matching amounts from the employer, we could get away from the current system. It would work similar to Medicare with individuals getting a supplemental insurance plan to pay the 20% not covered by the government. First, everyone would be covered that has w-2 wages or earned income. Second, as a group, the government could negotiate and get fair pricing on services and prescriptions. Third, the government could set up programs to help US citizens to get healthy. The government could offer rebates to individual who exercise and eat healthy. Fourth, the government could make recommendations to the food industries to make more healthy meals or foods. Fifth, Medicaid could be expanded to cover those individuals who do not have earned income and are in need.
Some people argue that free enterprise system is working. I would not agree with this. United States is ranked 37th in health care. But we are ranked number one on what we pay. It might be a good argument if we spent more money and were ranked first for health care. But this is unfortunately not the case. Special interest groups and the self-preservation of the status quo have led us to believe we have the best health care system in the world. The facts say otherwise. I would recommend all Americans do the research and you will find out the truth. We in the United States need to change our medical system into a better one. If we are going to spend the most, then our healthcare should be number one.
Now is the time for us to ask Congress to provide us with a fairer and better health care system.
Scarfo and Company CPA’s / Stephen Scarfo is a Clearwater-Dunedin CPA firm providing comprehensive accounting and tax services for businesses and individuals. We are a well-respected firm with a reputation for expertise and integrity.
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