Quick Thought On Paying For Health Care Reform
Posted by Jeff Pruitt - 7/23/09 @ 10:42 am - Filed Under Uncategorized
President Obama is trying to find bipartisan support for health care reform but he’s going about it all wrong. Anyone who paid attention during the last 8 years knows that if Republicans can’t afford something then they simply pay for it through tax cuts.
I suspect a $1.5 trillion tax cut would more than pay for a new national health care system. Don’t worry, my logic is flawless…
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4 Responses to “Quick Thought On Paying For Health Care Reform”
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The problem with healthcare is few know what they actually pay. How many times have your heard radio adds informing people to have dental work done at the end of the year. They say they paid for the insurance and they might as well use it. This is the key phrase “You have already paid for it, you might as well use it.”
Seniors say they paid for Medicare while working, but the truth is they paid pennies on the dollar, no where near enough to cover their future costs. Now instead of setting aside today’s workers medicare payments into a trust fund and accruing the costs now, they are spending not only every single penny every worker today pays in, but the accumalated surplus of four decades. They say the trust fund will be exhausted in less than 8 years.
But what few people know and even fewer politicians know is that both Medicare and Social Security Trust funds can never be exhausted!
Both Medicare and Social Security by law cannot borrow money. It has statutory authority to spend only those funds received from the dedicated social security tax on wages, tax on benefits and funds in the trust fund. Federal Law prohibits transferring general revenues to any trust fund.
By law the trust fund cannot be drawn down to zero. The trustees must submit a report promptly to congress detailing benefit cuts or tax increases when in any given year the trust fund is projected to fall below 20% of that given years expenses. Social Security’s ability to pay future promised benefits is dependent solely on the ability to raise social security taxes.
For over twenty years the Social Security Trustees have projected and reported the trust fund to be exhausted anywhere between 2019 and 2042 which is decades before its original projection of 2060. Where is their report detailing benefit cuts and/or tax increases to rectify the inadequacy?
United States Code Title 42, Chapter7, Subchapter VII, Sec. 911 (a), http://www4.law.cornell.edu/uscode/42/911.html
United States Code Title 42, Chapter7, Subchapter VII, Sec. 910 (a), http://www4.law.cornell.edu/uscode/42/910.html
So when the trust fund reaches 20% of any given years projections, they must make across the board cuts. This means that if nothing is done, Medicare expenses will stop rising faster than inflation because they will be capped at 5.8% of total wages paid in the US.
The cure is that people need to actually open their wallets and pay the bill. When this happens, people will begin to scrutinize the bill, shop around and ask what something will cost prior to just saying yes. No longer will Parkview Health say “we have no idea what it will cost” when in fact they have over 7,000 CPT codes with costs for each. They know darn well what the charges are, they simply do not want you to know ahead of time. They want a captive consumer.
Throwing more money at the problem does nothing for controlling money. Only the consumer has control. They need to pay the bill, not some faceless insurance, employer or government entity.
William: According to the Heritage Foundation,
“the Social Security trust fund is merely an accounting device filled with IOUs that future taxpayers must repay.”
However, I do agree with your premise that we have return to Free Market health care that existed in 1960. Patients must pay their own bills and purchase health insurance with the same judgments they use for life, property and automobile policies. Providers must post fees in advance, and deal directly with each patient to secure business, offer discounts and collect fees. Insurance companies and third-party payers are thereby excluded from free-ride profiteering.
Jeff: This Obamacare fiasco is far-far too serious for snide political jabs with no thought as to what the long-term harm to our economy and our society that will most assuredly result.
Nice to see the Mooninites chiming in!! LOL
gadfly wrote “William: According to the Heritage Foundation, “the Social Security trust fund is merely an accounting device filled with IOUs that future taxpayers must repay.””
There are two ways to look at government trust funds such as Medicare, SS-OASI, SS-DI, Highway and others. They all by law invest in US Treasury’s.
The National totaled $11.595374 Trillion of which $4.330457 Trillion is owned by these government trust funds. SS-OASI owns about $2.5 Trillion.
All Treasury and US Savings bonds are IOU’s. That is what a debt is. A mortgage is an IOU as is a car loan, credit card and other debts. There is a slight difference in the SS-OASI and SS-DI trearury notes in that they are payable on demand. This means when SS requests its money, it jumps to the head of the line in front of any and all authorized spending for any government agency (defense, food stamps, etc). They get first dibs on all and any federal revenues before any legislated spending bills.
Between 1957 and 1965 SS-OASI collected less in taxes than it paid out in benefits. Between 1970 and 1983 SS-OASI collected fewer tax dollars than it paid out resulting in the SS-OASI trust fund be totally exhuasted in 1983. To make payments to Social Security beneficiaries, SS-OASI was authorized to borrow $11 Billion from the Medicare and SS-DI trust funds. This $11 Billion was paid back between 1984 and 1986.
The treasury paid the funds to SS-OASI by simply being told by SS how much they needed and they sold new bonds to the public and exchanged those bonds held by SS-OASI for the cash sold. This is no different than refinancing a mortgage. The debt did not increase one penny, only who owned the debt. The interest rate did change.
The total SS-OASI fund balance as of today is the due solely from the cash surpluses since 1986. Is it an accounting gimick, yes? It is no different than what Bernie Madoff did. Now for those who say the SS Trust fund is worthless, then what is the true size of the national debt? Is it $11.6 Trillion of is it $9.1 Trillion. Who said their is a sucker born every minute?