Eat The Rich

One of the cries from the OWS crowed, and many sympathizers, is for “free” heath care. Now, of course, everyone knows it’s not free for anyone, except those making little or no money, and that it is simply paid by those who work. The very idea is socialist, and the proponents hope that only “the rich” will be taxed to pay for the healthcare of the rest of us.

Many of those advocating universal health care are smack dab in the middle class. And, their taxes are going to have to go up if they want that universal care, because there simply aren’t enough rich people.

The CLASS act in Obama’s Affordable Care Act was a gimmicks promising to make the care of the elderly affordable for the middle class, and very inexpensive for the poor. The only problem with this great idea was the math.

For decades Democrats have been trying to put government on the hook for middle-class costs like home health services ($1,800 a month on average) and nursing homes ($70,000 to $80,000 per year). On paper, Class was supposed to be like normal insurance, funding benefits through premiums with no subsidy.

Benefits were to start as soon as five years after you started paying into the system.

Of course, anyone who has taken a math course knows you need young folks and healthy folks to sign up (and start paying) in order to make this work. So, the future of CLASS was going to be a mandatory, not just those who saw elderly care in their immediate future.

So to fix this “adverse selection,” the plan was for Congress to eventually make participation mandatory, with the so-called premiums converted into another payroll tax and the benefits into another entitlement. Former White House budget director Peter Orszag has been writing that the long-term care insurance market can’t function without a mandate, while HHS Secretary Kathleen Sebelius declined to rule one out at a Senate hearing in February. Now they tell us.

In other words, HHS had to prove that the Class program wouldn’t go broke the way it was designed to—and actuarial analysis is a matter of math, not politics. In a 48-page report that HHS submitted to Congress Friday, the department concedes that it is literally impossible to create any kind of long-term care program under the law’s statutory text in which revenues match expenditures. Such a plan would cost as much as $3,000 per month, which no one would ever buy.

Over the weekend, I got into a discussion on facebook with a friend who argued that Germany taxes and provides these wonderful services, so why can’t we? Why can’t we offer health care for all. Well, exhibit A:

I was thinking about what the cost of Universal Health Care would be if Obama got his way. Analyzing Medicare might provide some answers. There are about 40 million people on Medicare. The Medicare budget is $420 billion, or about $10,500 per recipient. Persons on Medicare pay about $97 a month in premiums taken from their Social Security checks. The net Medicare budget is then $420 billion – $46 billion (from premiums) = $374 billion in Medicare taxes.

In 2006 there were 138 million people who filed income tax. They each paid 2.9 percent of their earned income (1.45 x 2) for Medicare tax. $374 billion / 138 million = $2700 per tax filer for Medicare taxes.

Now if health care were expanded to cover everyone the 40 million being covered would expand to 306 million. The health care sector represents about $2.5 trillion dollars per year. $2.5 trillion divided by 306 million = $8169 / person, or $18,115 per tax filer. To pay for that the health care tax would increase from 2.9 percent to 19.4 percent, on all income, not adjusted income like income tax.

So, add in another 19.4% to your taxes. Using the current tax code, those making 50,000, their tax rate goes from 25% to 45%.

How’s them apples?

Mark Steyn:

My colleague Rich Lowry correctly notes that many of the beleaguered families testifying on the “We are the 99%” websites have real problems. However, the “Occupy” movement has no real solutions, except more government, more spending, more regulation, more bureaucracy, more unsustainable lethargic pseudo-university with no return on investment, more more more of what got us into this hole.

Middle-class America is dying before our eyes: The job market is flatlined, the college fees soar ever upward, the property market is underwater, and Obamacare is already making medical provision both more expensive and more restrictive. That doesn’t leave much else — although no doubt, as soon as they find something else, the statists will fix that, too. As more and more middle Americans are beginning to notice, they lead more precarious and vulnerable lives than did their blue-collar parents and grandparents without the benefit of college “education” and health “benefits.” For poorer Americans, the prospects are even glummer, augmented by ever grimmer statistics on obesity, childhood diabetes, and much else.

Tax the rich and the corporations is not a solution. It’s a slogan. And a dangerous one.

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3 Comments on “Eat The Rich”

  1. MJ Says:

    I will buy other people health insurance as long as I also get to tell them what to eat and how to exercise.

    Seem fair? I think so.

    Here’s what the recipients of MJs Free Insurance will be eating:

    Brefiss: Bowl of high fiber cereal. Banana.

    AM Snack: Almonds. Protein shake.

    Lunch: Salad, Oil and vinegar. Cottage cheese. Two slices of Turkey.

    PM Snack: Fruit.

    Dinner: Grilled chiken, black beans, egg noodles.

    PM Snack: Yogurt.

    Only water to drink.

    The fatties will be running 30-45 mins daily. They will also focus on balance and strength with Yoga.

    Any takers? No? Ok then, no free insurance.

  2. Car in Says:

    MJ for health and human services secretary!!

    woot woot

  3. Steve B Says:

    And there you have it. Living in Germany right now. Talking to the locals, they pay anywhere from 42 – 46% of their income in taxes. Almost half. It’s very much socialized. Sure, the health care is cheaper, but it is still not universally free. There’s simply no possible way to make that happen in the real world.

    People that want free health care for everybody are dew-eyed dreamers. The only way for that to happen is for the medical providers to not charge for anything. And thus, have all their suppliers not charge them anything. Pharmaceuticals, laundry for scrubs, janitorial for hospitals and clinics all provided gratis. And the doctors and nurses and administrators would all have to essentially donate their services.

    What rational person really expects this to work?

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