Recently, Atul Gawande, a cancer surgeon in Boston and a contributor to The New Yorker, went back to his home town, Athens, Ohio in the foothills of the Adirondacks, to ask his former friends and neighbors — and some of their friends and neighbors — about health care.
He found, among other things, that they generally approved of Medicare but were against Medicaid. He reports that the reason for this difference is that the people he spoke to thought Medicare was fair because everyone contributes to it when they are younger, and they all get the same coverage later. Medicaid, on the other hand, gives special treatment to those who don’t work.
One woman said she had a low-paying job and struggled to pay the premiums on a second-rate health policy with high deductibles, while her neighbor, who didn’t work, got a better plan under Medicaid for which she paid nothing.
As I read that, I thought that if I were in that situation, I wouldn’t think it was fair, either. And if I thought the Affordable Care Act facilitated such unequal treatment, I would want to repeal and replace it.
The problem with that reaction is that it hurts everyone. If you have something I want, taking it away from you doesn’t help me. A much better solution would be to give me the same thing.
It is the “take away” strategy that Donald Trump is trying to follow. His recent orders, if not overridden by Congress, would reduce or eliminate subsidies to those who now get them and force many people who now pay for their plans to buy plans with less coverage. It’s a lose-lose situation.
“Medicare for All” makes much more sense. With the exception of the VA program for disabled vets, government medical programs like Medicaid and CHIPS (which provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid) would be eliminated. And everyone would go onto Medicare.
It’s not perfect, but most of us who have Medicare like it. And if all of us had the same coverage, that would certainly be fair.
The next question is “How do we pay for it?”
My suggestion is a modified Value Added Tax (VAT). The VAT is a form of sales tax used in most European countries and Canada. It gets incorporated into the price of the goods and services that are taxed.
I would apply a VAT at a rate necessary to cover each year’s Medicare cost to all the goods and services we buy except food for home consumption, rent, health care services, real estate and items that already have federal use taxes like alcohol, tobacco and gasoline. I would also apply a small financial transaction tax to all purchases of stocks and bonds.
The VAT would raise prices on much of what we buy, but the money being deducted from your pay for insurance premiums, and the money paid by your employer for those premiums, would go way down. You should get a big raise. Balanced out, you could end up with better health coverage and more money in your pocket.
Unlike Trump’s lose-lose plan, this is win-win.