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With Real Health Care Reform, US Would Not Need Affordability Tax Credits
Our health care system is unbelievably more expensive than any other first world nation. On a per capita basis, we spend over 50% more on health care than the second most expensive nation, Norway. As a nation, we spend more than twice as much per capita on health care than first world countries like Germany, Denmark, Belgium, France, Sweden, the UK, or Australia. If we actually got real health care reform that brought our health care costs down closer to the rest of the industrialized world, their would be no need to grant affordability tax credits on the new exchange.
In 2016, the Senate bill will spend $76 billion on affordability tax credits in the new exchange. The CBO says in 2016,
The majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium
Using this data, I can estimate that roughly $210 billion will be spent on premiums in the non-group market in 2016. Of that $210 billion, about 36% ($76 billion) will by paid for by the government in the form of tax credits, and about 64% ($134 billion) will be paid directly by individuals.
If we had a health care system as cost effective as Germany, Denmark, or France, that $134 billion paid by individuals would be more than enough to cover everyone in the non-group market with several billion left over. If we could truly reform our broken health care system and bring its costs in line with the rest of the industrialized world, there would be no need for large government tax credits on the exchange. Think about that for a moment. Even with the government picking up about 36% of the cost, individuals in the new exchanges would still be dramatically overpaying for health insurance compared to the rest of the world.
What this bill does is expand something called "coverage" and adds some new regulations to insures. It is not real health care reform. Because Obama cut sweetheart deals with the hospitals, doctors, and drug companies, true cost-controlling reform became impossible.
Some supporters of the Senate bill have pointed to all the money going to middle class families to help them afford insurance as a great thing. The help is nice, but it only points to how terrible the underlying problem really is. It is simply a strategy of throwing good money after bad. Middle class families should not need government subsidies to afford health insurance. What middle class American families really need is for our government to rein in the different industries ruining our health care system, not pass a bill that will only enrich and empower them further.
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33 Comments so far
Show AllAnd you have supporting evidence for your assertions?
It was in a recent documentary... "Sick Around the World" (I think). It talked about how Swiss drug companies were limited in their profits at home and made up for it over here. In essence, we subsidize Swiss healthcare, which has one of the lowest healthcare costs of any nation.
Obamacare will prohibit drug re-importation so we will never be able to test the theory.
No, the problem is they gouge the U.S.
They would be more than happy to sell their products at the going rates in places like Canada if our Government had the guts to hold their feet to the fire.
I have no doubt that marketing costs as about three time the cost of R&D.
Many drugs are developed by research universities funded by public money, and then big pharma takes these drugs and privatizes the profits. Only a small percentage of big pharma expenses go to their own drug research. The bite taken by Ad campaigns, sales forces, and executives is far larger. And if big pharma cannot patent something, they want it to be illegal for doctors to prescribe it, no matter how effective and needed the treatment might be. Big pharma's patented snake-oil has a legal lock on our medical system. Meanwhile hundreds of thousands of people are harmed and even killed by big pharma patented medicine every year.
It seems very hard for people to understand that the FDA is one of the major devils in this hellish brew of the medical monopoly.
And can we talk about just how much BigPharma spends on lobbying?
Nonsense, India produces quality drugs at a fraction of the price.
This is simply untrue and another myth spread by the Drug Companies . While The USA is the worlds largest single consumer and developer of New Drugs, the EU as a block develops new drugs on a par with the USA.
Of the Worlds 10 top drug Firms 5 are European and 5 are American.
Japan also develops new drugs and places like India now enter the game.
US drug Companies spend far more on ADVERTISING then they do on R and D. In many European Countries drug companies are not allowed to advertise directly to consumers.
Another driver of higher drug prices in the USA is the tendency of those firms to be allowed to use the same drug for another illness, repackage it under a new name thus extending the length of the patent. The US GOvernment also has a tendency of developing new treatments with taxpayer money and then transfering an exclusive licence for that research to a Private Drug Firm. In other words the Consumer hit with a double whammy, paying R and D costs via taxes then being double billed for the same when the raw science is then given to a drug firm who bill for the research again via the price of drugs.
TAXOL is one of the more well known examples of this. The Drug developed by taxpayer dollars via the NCI then all but given to Bristol meyers Squibb.
Thats not totally true. The reason why drug prices in those countries are lower is because in most cases they negotiate with the US drug companies for massive discounts. Our corrupt reps. instead of doing the same thing for us have sold us out to the drug companies. Its disgusting. Look at the how the Dems. stabbed us all in the back on the drug re-importation issue. What a bunch of crap that was. Obama campaigned as a Progressive and raised HUGE hopes on issues like this and many others. As soon as he got into office he surrounded himself with a pile of Corporatists aides and flunkies. The results are obvious. He's full of shit and so are they. He did a very smooth bait and switch on all of us. Fool me once ...
So by 2016 the government will pay 36% of the health insurance bill with TAX CREDITS. So no matter how you try to spin this, we are still paying 100% of the bill and it's still a 76 billion dollar corporate welfare hand out! How nice! If my Senators and Congressman vote for this I sure the Hell hope that they don't expect to get my vote the next time that they are up for reelection!
Hell you could get a better deal from the Mob!
The European countries that use private insurers (among them Norway and Switzerland) have systems that in some ways are similar to the Senate plan (mandatory insurance, government help in paying for premiums if one is poor). HOWEVER, they spend a minimum of 40 percent less per capita than we do because they treat health insurance as a public utility instead of a for-profit industry.
All insurers must be non-profits. The government reviews health care costs annually to be sure providers are decently recompensed and sets premiums to match. Businesses and individuals pay the set premiums and every resident receives the same set of benefits. There are no co-pays, no denials (except for obvious fraud), no excuses like imaginary pre-existing conditions to refuse to insure.
Competition is based only on each company's level of customer service.
Is it too late for some good Dem on the conference committee to suggest burying both the House and Senate versions of the bill and substituting the Norway plan for REAL reform?? (Second only to single-payer.)
Norway has a straight up public system paid for by progressive taxation. The system is administered by the Norway Government. All citizens and I think all residents who are not citizens are automatically enrolled. Those who have no taxable income (such as housewives) get health care at no charge.
Norway heavily subsidizes the supply side: doctors get educated at extremely low cost to them, and hospitals are mostly or entirely funded by Norway Government.
This is the best possible system yet thought of and proved to be successful. Health care systems have to be run by the government or they simply do not work out right: people end up not getting care they need for any of numerous reasons when the private sector is involved. Moreover, when the private sector is involved with health care, other parts of the private economy are damaged when the health sector overuses scarce financial resources.
Private health insurance has virtually no presence in Norway except at the margins, for example, for dental care.
It's not simply that countries like Norway do not have large amounts of money going to insurance companies. It's that countries like Norway do not agree in the first place that the insurance concept is appropriate or useful for health care, which it is not when you truly understand what insurance is and when you spend some time thinking about whether it works for health care.
Switzerland has private insurance companies but they are very strictly non-profit, not to mention that all high income individuals in Switzerland (including executives of the private insurance companies) make a lot less than half what their US counterparts fleece from their "customers". When a private company is strictly non-profit (not the pretend non-profit which is so common in the States) it economically acts not all that differently than a government agency.
24 reasons and counting why the new US system will be at least slightly worse than the old one:
http://www.unity-progress.blogspot.com
"doctors get educated at extremely low cost" This is an outstanding point. We might have quite a few more general practitioners if new MDs were not drowning in debt.
Another reason for ending our outrageous military spending, not to mention the fact that it makes too much sense. A President, who was a real leader, who was really willing to take to the bully pulpit with passion on behalf of the people, could have sold this to the American public.
But, no, instead we get Obummer with his new BFF from Aetna Ron Williams staged town hall, explaining all the reasons why we can't have real health care reform.
Norway has a partially nationalized Oil Industry. They charge one of the higher royalty rates on Oil resources in the world and then keep this in trust for the peoples of Norway.
With some 4 million people this fund has over 400 billion. BY DESIGN they try and ensure that no bubbles and boom bust cycles are created.
Norway's Socialist Government is heavily invested in what they see as strategic Industry including the Petroleum industry, hydroelectric and Banks.
Excess revenues from Oil and taxation are heavily invested in infrastructure, the educational system the health care system and other "Quality of life" investments for the PEOPLE of Norway.
They have a very progressive tax structure that ensures the GINI index remains stable and wealth distrubuted equitably.
The GINI index in Norway is 25 (as compared to 32 in Canada and 46 in the USA)
They are rated as the Number one country in the world in the Human Devlopment Index.
Yet according to some "Socialism" does not work , never has and never will.
Tax credits? What if you don't earn enough to pay taxes?
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Laugh out loud. So money from China and US taxpayers is being used to cover the spread between reasonable health costs and the exhorbitant health costs in the US. The spread goes to the executives and other very highly paid but unneeded employees. But the executives don't have to pay back their loot to either China or the US taxpayers.
"Middle class families should not need government subsidies"
If the wealth of this country were evenly distributed nobody would be in need of charity.
More than anything I would like to see an even distribution of wealth.
Who would pay for wars?
Who would need to steal?
Without the corporate press 'The war on terror' would be seen for the silliness it is.
One hundred years ago, Mark Twain said that we could not expect to maintain a democracy at home while building an empire abroad.
Neither can you base your foreign policy on social-darwinism and the domestic policy on altruism.
I believe the cost of running the American Empire is too high..My estimate over $1000 bn a year. You simply cannot afford to provide health care to everyone. Not without raising the taxes.
Universal health care , like we have in Norway, gives the people freedom. Freedom to chose a career they want instead of taking a job that provides insurance. Freedom from fear of hospital bills and bankruptcy.
What happens when the subsidies dry up and they're still required to buy the 'product'?
The true bottom lines are here are
i) the ~20% share of the GPD that the healthcare leech cartel (insurances, hospitals, doctors, etc) already have, and are about to expand thanks to this "reform" by-bribe only demobliRats.
ii) the fact that the healthcare leech cartel delivers very little "health" for the humongous amount of GPD it swallows every year...
Antitrust legislation and forced competition made kerosene, airline travel, phone rates, etc, markedly more affordable.
Government-run healthcare is desirable but not needed. After all, US grocers cut each other's throats in price wars that are not provoked by a "Public Grocer".
Let's demand that the healthcare clepto-cartel be subjected immediately to the full brunt of antitrust legislation !
It would be wholesome to see demoblicrat senators and representatives scramble live in front of the cameras to justify shamelessly, explicitly, and incoherently that they want to protect from *free-market competition* the obscene profits of their beloved healthcare leech cartel.
Let's call for binding legislation to be phased-in every 12 months to bring down the healthcare cartel's share of the GPD to below 10% and its profit margin down to those of garden-variety grocery retailers *before* obama's first term ends.
Simple, automatically triggered increases in the taxation of the outrageous profits extorted from the nation by the clepto-medical complex would do the job, with the extra revenue going to preschool and elementary education, Medicare, Medicaid, preventive healthcare, and infrastructure improvements especially in rural states.
Making central to the healthcare-reform debate such hard benchmarks and measures that connect transparently to true bottom-line issues will make it impossible for by-bribe-only demoblicrat senators and representatives to equivocate further around pseudo-issues and obfuscate the public to so defend the illegitimate interests of those who bribe them in order to parasitize the nation.
Last but not least, when confronted with questions about such hard benchmarks and measures, the few progressive push-over senators (like sanders) and the venal-progressive ones (like byrd) --and people like Krugman-- will not be able to hide anymore behind tear-jerking statements like "the bill gives healthcare to another 20,071 rural grandmothers with pre-existing conditions" while they keep mum about the increase of the healthcare leech cartel's share of the GPD to 30% which they are now supporting.
Simple solution: Remove the anti-trust exemption that insurance companies have. Let them compete with each other for our premiums, knowing that if they collude on price and benefit packages, they'll go to jail. I'd love to see them battle it out, cutting and trimming to pull in customers and calculating and re-calculating to see how close they can shave their profit margins and still satisfy their shareholders who will be in constant threat of dumping their shares. Let them experience business the way it's done in the real market place.
Revenge, Smee!
Even better yet would be to make insurance only apply in catastrophic conditions, and remove the ability of the drug companies to advertise directly to the consumer. As soon as the public started asking questions like "do I really need this" and "what are my choices" to the croakers we'd start seeing change we can believe in.
"What middle class American families really need is for our government to rein in the different industries ruining our health care system, not pass a bill that will only enrich and empower them further."
How about just get rid of the "industries ruining our health care system"?
Why can't this guy even suggest getting rid of something that's harmful and not needed?
Like getting rid of the pet alligator in the family swimming pool.
Isn't it obvious?
Instead, it's like--no, we'll just teach the children to be quick, "competitive" little swimmers and make doubly sure Andy alligator has had a nice meal before the kids take a swim.
At what point do you admit that in order to get real healthcare reform the insurance industry has to go?
For a comprehensive study of the high cost of American health care, read Shannon Brownlee's "Overtreated'" published in 2007.
Highlight:
One-third of the cost of health care in the US goes for unnecessary treatment, driven (as one might expect) by the profit-oriented nature of the system and the fee-for-service payment structure. And this is not just waste. It also puts patients at risk unnecessarily, further increasing costs ... not to mention the additional injury and death.
The system is far worse than it has been portrayed in the media (mainstream OR progressive) and is, tragically, being "reformed" by a bunch of political hacks who don't have a clue to how health care in America actually works.
The one indispensible idea for cost containment and fairness in the system is best-practices and medical efficacy research and standards, which has, predictably, been mischaracterized and demagogued as "rationing" and "death panels."
Folks, we get the kind of leadership we deserve.
Time to show the teabaggers what anger really looks like.
"Our health care system is unbelievably more expensive than any other first world nation"
Usan elites didn't plot to make the USan people work TWICE as hard as people in other countries for LOWER quality healthcare. Rather they simply sat back and let it happen. Because this is what laissez-faire elites do. Sit back and allow their fellow elites to stick it to the people any way they can.
Granted, USan elites enjoy significant support from the USan people. Look at that monstrous healthcare administration staff eating up over 30% of USan healthcare dollers. They view the elites as sugar daddies. That is, they refuse to think for themselves and choose their exchange/association according to their principles. Instead, they let the sugar daddies choose for them.
Sugar daddy elites, and sugar mammas, in scary, destructive co-dependent relationships with their dependents.
The answer is for each individual to apply one's principles, ask if a market is functional, and avoid participation that feeds the dysfunction. Markets are functional if the great majority of resources are allocated toward serving the society's BETTER interests. That 30% of healthcare dollers allocated toward admin is a gargantuan waste.
If the free market can't allocate properly, then the government takes over. In the rare case that free market participants can behave responsibly, free markets can work. Who's going to accept responsibility for the destruction of responsibility in the "good ol USA"?
Now imagine the potential of a society that allocates MOST resources toward BETTER interests. It's huge. This is the economic side of the FAR-LEFT vision, platform, agenda.
What are society's BETTER interests? Obviously, those things that support maximum well-being, happiness. Feeding one's pride/ego isn't part of it. You get the idea.
This article makes fodder of wacko assumptions fed to us by elitevil. If you ignore the elites, your civic obligations become much easier.
It should be unconstitutional to mandate that Americans be forced to pay into a private health insurance system, with affordability tax credits or not. If it were a public system that we own, and we would own a public health care system, it would be within the governments power to force us to pay, according to our ability, into it in order to receive services. We all need health services at one time or another. But to give our money to profit making corporations under penalty of law is outrageous. Why do so many poor and middle class Americans trust wealthy profiteers to cover health costs rather than their own public run, non profit, health care insurance system? Evidently they don't trust their own collective, public, ability to be efficient and just. Other Countries around the world trust their own elected government's ability and offer excellent fair health care to all citizens. Why can't we have confidence in ourselves and have the courage to try a single payer system? Americans are suffering and dying needlessly.
What the public needs is not really what motivates Congress. In the Senate we can see most clearly that it is really all about them. What is needed is first of all a way to sweep these, "public servants" out of affice. the least we can do is not vote for any of them--including Bernie Sanders.
FREE people not free markets!
To GwNorth---
That I have not responded to your posts does not mean that I have not been paying attention.
You are wise. We all need wisdom.
I hesitate to wish us well in the New Year. What have we done to deserve it?
OTOH, CommonDreams is a really great site, esp. given that the MSM "news" is now blatantly propaganda. Take CBS' Harry Smith, please! Orwellian Everyman.
I think I am about to spontaneously combust!
It is a strange feeling to know that you were right but that it did not matter! It was not supposed to happen this way...
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