Health Care: How To Pay For It & How Not To Pay For It

Solomon Kleinsmith puts forward some plans to address the mounting costs of health care. I agree with some and disagree with others, but the ideas are interesting and you should consider them all.

First, how to pay for it…

To fund a health care program, it makes much more sense to tax behaviors that lead to health problems than it does to tax income in general. By doing so we can, in one fell swoop, put more of the costs of the system in the hands of those who are causing the most problems, lower the consumption of these products AND help pay for universal health care. We already have taxes on cigarettes, alcohol and items deemed luxuries like jewelry, hotel stays and amusement parks. So why not extend similar taxes to the most unhealthy ‘food’ items in the market? [...]

If people want to smoke, drink or eat themselves to death, then they can make a down payment on the hundreds of thousands of dollars the government will pay to take care of many of them during the last months of their lives. If we can save some of them from that fate by enacting the proposals mentioned above, that’s even better.

This makes sense for a variety of reasons, not the least of which is finally acknowledging that the folks who take the most of the health care system are the ones who abuse themselves and end up needing extraordinary care earlier in life. And Obama has already started doing this by signing the biggest tax on cigarettes in decades earlier this year.

Still, some say that this will make people stop abusing food, alcohol and tobacco to the point that there won’t be enough money left to fund the system. That’s fair, but if fewer people are becoming healthier and not needing extraordinary, expensive care, then health care costs are going to lower anyway overall. Also, people will still over consume. Unless we put outright bans on things like alcohol and tobacco, we won’t have to worry about consumption going down that much because this is just how human nature works.

Now, the way to NOT pay for universal health care…

After some early indications otherwise, the proposal to tax medical benefits seems to be dead in the water. Support in the Senate dissolved when several polls put the opposition to such an idea among the public at around 59%. Unions, many of whom have negotiated higher benefits in lieu of higher pay over the last few years, were especially vocal in their opposition, which assured the proposal would lose enough support among democrats to block its passage.

Solomon also mentions the surtax, but I actually think that taxing the rich is inevitable because they’re not going to be moving to another country and most of the nation’s wealth is concentrated into those top tiers. It’s really the only way in the near term, since more “vice taxes” are most likely further down the road.

Here’s the question: How would you pay for health care?

(Photo: Getty via Daylife)