When my cousin opened a medical clinic in a remote Vermont town that serviced a broad, formerly doctorless area, people with untreated health problems came out of the woodwork.
After a year or so, things settled down, and Dr. Paul Bertocci has continued to operate a successful practice for about 37 years. What this says is that the new health care system taking the formerly uninsured out of emergency rooms and putting them in the mainstream will cost us more in the short term. But eventually, costs should settle down and generate savings in premiums that once subsidized the cost of the uninsured.
Everyone who badmouths health care reform and the additional cost in taxes has pointedly been ignoring the insurance savings of reform. One should more than offset the other. The net effect, long-term, will be a more efficient system with, finally, such components as a national focus on curbing hospital infection rates. In this obvious assessment, I've now been joined by, of all things, the Business Roundtable - the country's most powerful lobbying organization that represents about 150 of the nation's largest companies. What an unlikely ally.
The Business Roundtable reported last week that its member firms will save $3,000 per employee, per year, in premiums as a result of the reform package. It went on to say that continuing the status quo would have been "unsustainable" and would have made it impossible to compete in world markets.
Massachusetts, which has been operating a health plan almost identical to the final federal version, has seen premiums increase by 13 percent last year versus 10 percent for the nation overall. This 3 percent difference is hardly some doomsday scenario and reflects the condition that my cousin experienced in the first few years of opening his practice.
The fact that premiums in Massachusetts didn't immediately drop by the Business Roundtable's $3,000 per employee figure is obvious. The formerly uninsured with neglected health problems have started using services to a greater extent than the number who previously managed to drag themselves into emergency rooms for the free treatment paid for by the rest of us. Going forward, this short term bump is expected to subside, and we can expect the Roundtable's $3,000 figure to begin offsetting the inevitable higher taxes.
Speaking of taxes, the widely publicized 47 percent of all Americans that don't pay any income taxes do, in fact, pay social taxes of about 16 percent for the benefits they receive. This explains why Warren Buffett's secretary pays taxes at a higher percentage rate than her boss. Meanwhile, upper income folks, thanks to tax reductions and raises, have substantially more after-tax income than they had 20 years ago - some reports say the amount has tripled.
The 47 percent paying no "income" taxes are the folks like teachers, police, firefighters, the military etc. who provide essential services and who contribute to the greatness of this country. Should we start taxing all these people or should we raise the rate on folks earning six figures who have seen take-home pay double or triple over the past two decades?
We can each make our case for why the new law is good or bad, but nobody knows for certain what the outcome will be for the nation's health care experiment. But, as the Business Roundtable implied, we had to try something different, and what we have is certainly a start.