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TechnoratiObama's Path to Greatness: Healthcare as Stimulus
President Obama will have a historic opportunity to establish himself as a truly great president in his first days in office. He can take advantage of the current economic crisis to announce plans to jump start national health care insurance. Extending health care insurance can be an effective stimulus that will provide an immediate boost to the economy.
More importantly, it will provide the same access to health care that people in other wealthy countries have long taken for granted. For this accomplishment, President Obama will rank alongside Presidents Roosevelt and Lincoln as one of the nation's truly great presidents.
The backdrop is straightforward. Economists from across the political spectrum are now calling for a large stimulus package to limit the economy's decline and the rise in unemployment. The consensus is in the range of 2.0-2.5 percent of GDP, or $300 billion to $400 billion a year.
This level of agreement among economists is encouraging, but the reality is that it is difficult to effectively spend $300 billion to $400 billion a year on short notice. There are some no-brainers that belong in any stimulus package: aid to state and local governments, extended unemployment benefits, and extra money for food stamps and home heating oil assistance. This is money that will be quickly spent, boosting the economy, while helping those hit hardest by the downturn.
A stimulus should also include increases in infrastructure spending, which will come about by moving plans forward for projects already on the books. There should also be a substantial green component, involving retrofitting homes, businesses and other buildings, which will reduce our energy use.
However, after we get through this list, the sum total for the stimulus package is probably still in the neighborhood of $150 billion a year, at best half of the targeted sum. This is the gap that will be filled by extending health care coverage.
As a basic outline, the government can give a substantial tax credit (e.g. $3,000) to employers who cover workers for the first time in 2009 and 2010. It can also offer a tax credit covering most, or all, of any additional payments by employers who increase their coverage.
This means that an employer who picked up the workers' share of insurance payments, or got a better plan, would have much of the cost reimbursed by the tax credit. Credits can also be given to individuals who are either self-employed, unemployed, or not otherwise covered through their employer.
If 20 million workers get coverage through this tax credit, that would cost $60 billion. If another 60 million get an average of $1,000 in additional health care benefits, this would cost another $60 billion. If we also throw in funding to reduce the health care burden for Medicare beneficiaries, for example by $1,000 each, this will cost roughly $40 billion. The total cost would be $160 billion a year, a reasonable target for the stimulus package.
At the same time that this health stimulus is enacted, we should open up the Medicare system, allowing all employers and individuals the option to buy into a Medicare-type plan. This is important, because a well-working public sector plan will be important to controlling costs over the long term.
After 2010, the tax credits would be cut back, with the goal being a system of subsidies that pay the full cost for low-income people, but phase out at higher income levels. It will also be important to use the Medicare-type plan and other tools to squeeze waste out of the system, since controlling health care costs is essential to sustaining a healthy economy over the long term.
Extending health care coverage in this way is effectively eating dessert before dinner, but this is exactly what we want to do to counter the recession. It is important that we spend money now to boost the economy. We will be getting double value if this stimulus can be spent usefully toward meeting a longstanding goal, such as providing national health care insurance, rather than just buying things at the mall.
Fixing the health care system so that costs are effectively contained will be a long and difficult political battle. Powerful interest groups, like the insurance and pharmaceutical industries, will use all their power to obstruct this effort. The health care system's waste is their profit.
However, we should be reassured by the fact that every other country has managed to more effectively contain costs. Average per-person health care costs in other wealthy countries are less than half as high as in the United States, and they all enjoy better health care outcomes.
Over the long run the task of containing health care costs is clearly doable. The question for President Obama now is whether he is prepared to take the big leap toward being a truly great president. This opportunity may not come again.
15 Comments so far
Show AllI heard a lot of talk about affordable health care. We need acceptable standards of care too. Here in East Tennessee and Southwest Virginia horrifying care is perfectly acceptable health care. See for yourself at http://www.wisecountyissues.com
Why not start the ball rolling by extending MEDICARE BENEFITS TO THE AILING AUTO INDUSTRY. For example, instead of handing out bailout money to Ford, GM, Chrysler etc, why not eliminate their EMPLOYEE HEALTH CARE COSTS---which account to $1500 of the price tag of a new car? This would be a small enough step to start us toward universal health care while at the same time reducing the losses of the auto industry.
I am no economist, but none of this adds up... that is our problem.
If the people are going to survive this intact and increase the National Debt which is the problem because of all the past and present War spending on the War economy, it is best to see that any new borrowing which is really what we mean whenever we pay for "stimulus" of any kind like national health care reform, or Green infrastructure and energy spending for jobs... it all means more national debt added on top the new debt for money we just borrowed to bail out the banks and failing corporations which is only a fraction of what they have stolen and hasn't been accounted for yet.
It all equals More National Debt.
The fix:
The fact that we haven't yet nationalized the Federal Reserve, a private cartel that lends us our own money and compounds the interest on all the old and new debt, digs the Black hole of National Debt deeper and deeper.
Nationalize the brains of the system (The Fed) or we will continue to go deeper in non-payable debt as we continue to bail out all corporations now going broke because they don't know what happened to the money they stole from the people already.
Obama should at least tell the Federal Reserve after January to reform its ways and begin real government oversight unless they want to get nationalized for real. That would be an instant first step to reform who owns and creates our money and put the International Banking cartel on notice that their looting time is up.
Our constitution gave us that right but it was stolen in 1913.
We can take it back and Obama will have to do it sooner or later because the financial depression is about Debt and none of this adds up for now and the future if we don't first own our own money.
Now we know why Jesus chased them out of the Temple... He knew how to add too.
Dean Baker says:
"He can take advantage of the current economic crisis to announce plans to jump start national health care insurance. Extending health care insurance can be an effective stimulus that will provide an immediate boost to the economy."
Health care INSURANCE? Am I missing something here? INSURANCE? The insurance companies are already bloated with obscene grotesque profits. Their CEOs are pulling down Billions in pay. These guys are not experiencing any sort of economic crisis here.
Baker completely missed the point on the economic crisis and the lack of universal single-payer health CARE in this nation. To hell with insurance. I'm up to here (fingers at throat) with any discussions on health insurance.
Tax credits to corporations will not work. Over 60% of corporations pay no taxes as it is. The credit is only 25% of the cost of family insurance under a group plan, and these costs are increasing, and will increase even more rapidly, especially with the new mental health requirement.
In todays economic climate, businesses are struggling to survive and will not take on additional costs. Surplus labour due to immigration and inadequate job growth means they can get labour without providing such benefits (unlike in the 50's and 60's).
Many of the problems people face is when they are between jobs and uninsured, or even if they are working and insured, and they get sick and the insurance covers only a fraction of the costs , or they can not work due to the illness and end up losing the insurance as well because they can not afford it, and end up in bankruptcy.
These are all very well known issues. The fact of the matter is, making health care too expensive for people who get sick and require treatment is a great way to reduce life expectancy for those who find themselves out of work before they retire, and thus reduce the cost of providing health care for those in retirement, since fewer make it to 65. They want to make it harder to reach 65 and collect SS and medicare benefits, and those who do find the COLA's on SS do not keep pace with inflation and soon have to choose between heating the house and paying for their prescription medications, and so they die earlier. Thats why life expectancy in the US is now declining.
If the banks catch a cold, here is 700 billion. For the citizens, get stuffed. If you can't afford medical care, you likely don't deserve it, and will just consume resources if kept alive. Thats the neo-malthusian outlook at work.
As Stalin said, if you don't work, you don't eat. In Amerika, there is plenty to eat, including the poor on welfare who will die early of obesity related complications.
If you get sick and do not pay the health tax (or work for someone who does), you don't get treated very well, and even if you do pay the tax (insurance premiums), you may find it still was not enough, and being sick is no excuse not to pay the tax. If you still want treatment without insurance or the ability to pay, you just have to give up pretty much everything you own to get it.
Our government now owns 79.9% of AIG, or has the option to own it, the largest insurance company in the world. Universal health care will never happen in this country.
In September, Bush went on national television to sell the Wall St. bailout to the American people. It worked. By giving the same speech, with a few little substitutions, President Obama could solve our health care crisis. Imagine:
"Good evening. This is an extraordinary period for America.
Over the past few weeks, many Americans have felt anxiety about their health and their future. I understand their worry and their frustration. Nearly 50 million Americans have no health insurance. Many more find themselves at the mercy of the Insurance and Pharmaceutical Companies, who are more concerned with profit than with providing quality care.
We're in the midst of a serious health care crisis, and the federal government is responding with decisive action.
I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention.
Under normal circumstances, I would have followed this course. But these are not normal circumstances. Our current health care system is not functioning properly. There has been a widespread loss of confidence.
The government's top health and economic experts warn that, without immediate action by Congress, thousands of Americans will die prematurely. Thousands more will be forced into bankruptcy.
I know that an economic rescue package will present a tough vote for many members of Congress. It is difficult to pass a bill that commits so much of the taxpayers' hard-earned money. However, I can assure you that a universal, single-payer health care system, like the one proposed in House Resolution 676 (Medicare For All), will actually cost LESS than the inefficient system currently in place. How will it work? Well, back in 1948, when Great Britain enacted universal health care, they sent out a pamphlet to all British citizens. It stated:
“Your new National Health Service (NHS) begins on July 5th. It will provide you with all medical, dental and nursing care. Everyone, rich or poor, man, woman or child could use it or any part of it. There are no charges except for a few special items. There are no insurer qualifications, but it is not a charity. You’re paying for it mainly as taxpayers and it will relieve your money worries in times of illness”
Pretty straight forward, and a good place for us to start. I promise you this - All decisions concerning your health care will be made solely by you and your doctor. The government will not have the power to deny or restrict your treatment options. No one will be refused coverage due to pre-existing conditions. You will be able to choose any doctor or hospital you wish.
I know that Americans sometimes get discouraged by the tone in Washington and the seemingly endless partisan struggles, yet history has shown that, in times of real trial, elected officials rise to the occasion.
And together we will show the world once again what kind of country America is: a nation that tackles problems head on, where leaders come together to meet great tests, and where people of every background can work hard, develop their talents, and realize their dreams.
Thank you for listening. May God bless you."
Aside from the health care industry, our biggest obstacle to national, universal health care is the AFL-CIO. Big labor does not want universal health care, and will do everything they can to stop it.
The big national health care reform coalition, Healthcare Now, and their labor allies are supporting gun-to-our-heads forced private insurance, a la Massachusetts. A Healthcare Now organizer told me that they oppose single-payer because of the unions, who are afraid that their members will suffer.
Labor is not our ally in this, which means the Democrats are not going to go for it. I hear no one talking about this fact. I've been a union supporter all of my life, and the president of a 60 member local. I'm ashamed of the labor movement!
Funny, I did a google search and I found out that the AFL-CIO actually supports single payer. Now I agree the new healthcare plan in MA is a complete joke but it could be worse. Just come over to my state and see if you can stay a union supporter. South Dakota is no friend of any labor unions or even single payer I'm ashamed to admit.
Terrance Mitchell
Redfield, South Dakota
I stand corrected.
I also made the mistake of confusing Healthcare-Now with Health Care for America Now, a completely different coalition with a very similar name. Health Care for America Now, which includes several non-AFL-CIO unions does not back single-payer, but Health Care-Now does.
I hope I haven't made everybody as confused as I am.
When Obama was asked about priorities in the debates [in case there is not enough money for all the projects he wants to do] he said that 'energy independance' [which includes moving to renewable energy] was going to be in front of health care reform.
I think that makes sense. The thing is, green energy will help people's health, but medicare, improving people's health, won't do a thing for the environment. So it makes sense to change America's polluting energy-from-oil ways first, and at least hit two birds with one stone.
There is no doubt that health care coverage for everyone will be one the best things that can be done for all Americans. Here in Canada it works well to have government coverage of health care.
When Obama was asked about priorities in the debates [in case there is not enough money for all the projects he wants to do] he said that 'energy independance' [which includes moving to renewable energy] was going to be in front of health care reform.
I think that makes sense. The thing is, green energy will help people's health, but medicare, improving people's health, won't do a thing for the environment. So it makes sense to change America's polluting energy-from-oil ways first, and at least hit two birds with one stone.
There is no doubt that health care coverage for everyone will be one the best things that can be done for all Americans. Here in Canada it works well to have government coverage of health care.
The middle class is broke, tapped out, running on empty. No stimulus will be successful without first making very significant adjustments enabling a much more progressive tax code. It would be wise to make that code retroactive so that the wealth stolen from the middle class through lobbying for the rich is reversed immediately. Substantial funds would then flow to those who need it. This is the form of stimulus I would prefer. Establishing government run universal health care would also enable most people to have excess income to spend on their needs.
Since the Supreme Court ruled that money is speech, it is essential to redistribute the wealth so that speech can be more evenly spread resulting in both a more healthy democracy and a significant lessening of the meddlesome and harmful kookie ideologies of the spoiled rich, witness George Bush, Grover Norquist, etc.
Now even DB is pretending we live in a dictatorship where the POTUS just says "spend here, spend there" and thy will be done?
It's up to Congress - and that's who should be targeted relentlessly, right now. Any "right things" our reps do, BO will sign.
Meanwhile, it'd be nice if, just once, we read something from DB that included a method of paying for all the things proposed. How about some shared sacrifice, eh? How about we trade ya one "star wars" program for a couple of health care initiatives? How about we swap ya one "war on drugs" for some extended unemployment? How about we exchange 500 military bases and golf courses worldwide for, say, some domestic infrastructure rebuilding?
Or we can just charge it all, as per usual, and worry about it later, right DB?
Forget employer tax credits for health care.
Just open Medicare to any and all who want to participate, regardless of age.
Nobody takes their kid to an insurance agent when the kid breaks an arm. We don't call the benefit management people when we are laying in bed in a hospital. The health insurance industry is a parasitic cost that adds nothing to health CARE.
Likewise I don't ask the pharmaceutical company sales rep whether or not I should be taking a heart drug; the pusher always promotes a sale. The drug industry needs to be relieved of it's marketing departments.
Eliminate the health insurance industry and drug company marketing departments and their massive CEO payouts and universal health care would suddenly become affordable. Just like it is in the rest of the civilized world.
Fighting the forces of rather dim lighting wherever they may be found!!