Health care, federal deficit can't stew any longer

by Stephen Butler

IT MAY BE an urban legend, but I believe I saw one of the Tea Party members waving a sign that said, "Keep the Government's hands off my Medicaid."

Today's situation regarding both the federal deficit and health care feels too much like the "clean dish/dirty dish" analogy. This refers to the two roommates of which one is inclined to wash a dish only when there are no clean dishes left. The other never lets any dirty dish sit in the sink. Given this situation, the dirty-dish roommate will rarely have to wash a dish. Today, we have a dirty-dish mentality standing in the way of some long-overdue course correcting on our two major problems.

We have a broken health-care system and an uncontrollable deficit. The dirty-dish equivalent of our political system, irrespective of party affiliation, would be the people who fail to confront the problems we have and who argue to maintain the status quo. In the end, both of these problems will get fixed, because we're a great country and we're running out of patience. But in the end, those dirty-dish people who play no constructive role in the process (and their constituents) will benefit from the efforts of those who will have lead us to some modicum of success.

In health care, it's pretty simple. We'll wind up with a system like Switzerland's with everyone insured and the government subsidizing those who would have trouble paying. The days of all of us paying for the uninsured who flood into our emergency rooms for free treatment for will be over. The new system will be rational and more cost-effective. At the same time, none of us will be exposed to the specter of personal bankruptcy if we (or one of our dependents) gets sick or injured while we're uninsured. This is not a lot to ask, so I will be dumbfounded if it doesn't happen this year.

With these fundamentals solved, we can then aim the big guns at the cartels that run the health-care industry. The idea that the same hip joint can cost anywhere from $2,400 to $7,200 depending on who you are, and that this pricing is conducted in secret, will come to a halt. That health insurance monopolies are exempt from federal antitrust laws has also never made sense. When Blue Cross morphed from a non-profit to a for-profit public company 20 years ago, the reserves that had accumulated thanks to years of non-profit status were never distributed in an orderly fashion.

Not surprisingly, more than $300 million of that money wound up in the hands of a few key Blue Cross executives at the time. This is capitalism run amuck. With respect to the deficit, we'll all be paying more in taxes. The past 10 years has been a free ride, but we now have a condition whereby 23 percent of the nation's personal income goes to the top 1 percent of the population. In 1990, 9 percent of income went to the top 1 percent.

I know some of those people in the top 1 percent, and none of them struck me as being unhappy back in the '90s when they were reduced to that 9 percent pittance. At this point, the top 10 percent of the nation's wage earners shouldn't be surprised or upset if their tax obligation increases, and most are patriotic enough to at least accept it grudgingly. Most of us will admit that a rise in taxes should have happened back when this country went to war eight years ago. Like oil filter ad used to say, "Pay me now or pay me later ".

The good news is that we can more than compensate for a tax hike by fixing health care - an expense that chews up 16 percent of our gross national product and threatens our competitiveness in a world economy. There's a shovel-ready project if there ever was one.

Searching for Something?

Simply enter a keyword or topic to find the expert tip, services or news you are looking for!

News

Sign me up for your Newsletter (or make other subscription changes)

401(k) Today

Designing, Maintaining and Maximizing Your Company?s Plan

Looking for in-depth information on how to design, maintain and maximize your organization?s 401K plan?

Then 401(k) Today by Stephen Butler is the practical, easy-to-read guide for you!

To order your copy today, please call Pension Dynamics at (925) 956-0505