Social Question

SquirrelEStuff's avatar

If 50 million people got health care overnight, using supply and demand, wouldnt prices skyrocket?

Asked by SquirrelEStuff (10004points) August 21st, 2009

The question explains it all.

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62 Answers

dpworkin's avatar

The question explains nothing. What would the funding source be? Who sets the rates? How much more expensive is it to have them going to emergency rooms instead of regular doctors? Who’s paying for their catastrophic illnesses now? I could go on. Time for you to do some reading.

MrItty's avatar

What does “got healthcare” mean? You’re suggesting prices would skyrocket “using supply and demand” because the demand would be so much higher. This is simply untrue, as the demand is already high – everyone in the world wants healthcare. The problem is that not everyone can afford healthcare. There is no one in the country who isn’t allowed (legally) to obtain healthcare. So what the heck do you mean by “got healthcare”?

PerryDolia's avatar

This is a reasonable question, but it contains some assumptions that may or may not be true.

First, it assumes we are near capacity. If there was tons of capacity, the new demand wouldn’t affect rates, and, using economies of scale, prices might go down.

Second, it assumes that the people who “get healthcare” weren’t previously using the healthcare system. More likely they were going to emergency rooms and clogging the system, and not paying their bills, making the rates higher for those who do pay. It is possible that the new “demand” is not new at all, and the newly covered will bring funds into the system, helping to drop prices for all.

I don’t expect prices to drop. I am just pointing out the assumptions. I think prices will stay stable and the top execs will continue to milk the system for themselves, as usual.

dpworkin's avatar

@PerryDolia is very kind to call that formless thing reasonable.

SquirrelEStuff's avatar

If the government gave a car to everyone that couldnt afford a car, what would happen to the prices of anything associated to cars? gas, parts, service…. that would all rise
I am using this logic with health care.

Hope that explains it better. Guess it made sense in my head.

dpworkin's avatar

You don’t die if you don’t get to own a car. Your kids don’t suffer from transmissable diseases.

SquirrelEStuff's avatar

Thats not my argument. I am asking about prices.

MrItty's avatar

Continue the analogy. What are the associated items to healthcare? What is the equivalent to gasoline, oil, wiper blades, etc, that you’re hypothesizing about?

dalepetrie's avatar

@chris6137Economics 101 – “The Law of Supply and Demand”

If there is more demand than supply for something (such as 325 million people demanding health insurance, but only 280 million able to get it), the prices go UP.

If there is more supply than demand for something (such as a health insurance system where everyone is guaranteed to be able to get a policy whenever they want), prices go DOWN.

Your assumptions are bass-ackwards. Bottom line is, reform passes, the health insurance providers in this country have to get off the gravy train. And they know this, why else would they be spending $14 million a day to convince Americans that reform means rationing, government control and death panels (among other ridiculous, baseless accusations)?

Now, I understand if we say there is limited “capacity”, like our current system of medical providers could only absorb say 10 million more people than it serves now, but there really doesn’t seem to be a shortage of doctors as far as I can tell. And in my experience, some are incredibly busy and not taking new bookings, while other would take any and all business that could come their way. I don’t think we’d have a hard time absorbing 50 million new patients, if that’s your concern, because after all, right now the majority of them go to emergency rooms if they’re very sick or injured, which of course costs way more than a regular doctor visit would, and they aren’t able to pay for it, which costs the taxpayer money, and costs the legal system money when these people have to file for bankruptcy, and costs the welfare system money if the bills make them destitute and so on and so forth.

Basically, however even if you assume that 50 million new entrants into the system demanding care because they are now able to afford it would put stress on the system and result in somewhat of a shortage of care providers, then I suggest it’s far better that we address that by encouraging more people to enter the medical profession, rather than let 50 million people go without health insurance.

We’re talking about making sure all Americans have the ABILITY to go to the doctor if they need to. Seems like any problems that “might” pop up pale in comparison to the problems with our current system could not be nearly as bad as 50 million uninsured, 14,000 people a day losing their health insurance, 17,000 people a week filing for bankruptcy because of unpaid medical bills (making medical bills the SINGLE LARGEST CAUSE of personal bankruptcies in the US), a for profit insurance industry which has an incentive to deny care to their customers (because it’s cheaper), and 22,000 people a year dying because of inadequate medical care. Seems to ME, that any problems that might occur would be something we should address vigorously if and when they occur, but that we should actually work on the problems we DO have and HAVE had for going on 20 years now.

And finally, you seem to have the same misconception that all people spouting an anti-reform message seem to hold. We’re talking about health INSURANCE reform, not health CARE reform. We are talking about making sure that current existing private companies can’t deny people for pre-existing conditions, can’t refuse to pay for medically necessary care, can’t cancel patients because they get sick, don’t charge as much as they do now, and have some competition via a publicly available insurance option open to all, similar to what we do with Medicare for our elderly.

SquirrelEStuff's avatar

text taken from http://www.campaignforliberty.com/article.php?view=172

“In 2002, America spent $1.6 trillion on health care, up 9.3 percent from 2001. Drug costs increased 15.3 percent while hospital costs increased 9.5 percent. Out-of-pocket costs, the most market-related, declined.

A graph plotting the percentage of government payment for health care with the total cost of health care would turn almost vertical after the passage of Medicare and Medicaid in 1967.

The so-called private sector of American health care is better termed the regulated sector. It includes insurance companies, HMOs, and licensed pharmacists and physicians. To receive any government reimbursement they must “play by the rules” imposed by the socialized sector. As a result, this sector is mainly an extension of the socialized sector.

Insurance companies are burdened with a thousand state and federal mandates regarding what services they must supply. HMOs are also heavily regulated and are in fact creations of the U.S. Congress by virtue of the HMO Act of 1973.

Medical schools also receive government subsidies and grants. This means that what is taught is influenced if not dictated by these funding sources. Physicians are regulated by state licensing boards and, of course, must abide by Medicare and HMO regulations if they choose to work in those settings. To call any of these aspects of the health-care system “private” is a joke.”

“America really has three health-care sectors. The socialized part or government sector comprises about 65–70 percent and includes Medicare, Medicaid, and the Indian Health Service. It also include the Department of Veteran Affairs, the Public Health Service, programs such as KidCare, and the bulk of medical research. The latter includes the National Institutes of Health, National Cancer Institute, National Heart Institute, and about 30 other government institutes. The “donors” for research in these institutes have little say over what or how wisely their health-research dollars are spent.”

I am under the impression that over time, as the government got more involved in health care, costs went up.
Look at what happened to housing prices since the 70’s, after the government got involved and passed the Community Reinvestment Act in 1977.

dpworkin's avatar

@chris6137 It would be exhausting just to rehearse the catalog of moral flaws in your argument. let alone refute them.

dalepetrie's avatar

@chris6137 – where have all those additional dollars spent on health insurance gone? Into the pockets of health insurance execs. Did you know that overhead costs for private insurance are 1/7th what they are for publicly financed health care. That’s a huge amount o that money. If we have a public system which is 7 times as efficient, and which additionally does NOT have the need to make a profit, health care costs will go down. Plus, there’s the doing the right thing and providing for the public good thing.

SquirrelEStuff's avatar

@dalepetrie

I agree about where most of the money has gone. Aren’t the insurance and pharmaceutical companies the one’s influencing the writing of the bill? It’s just like most other laws, written by and for special interests. After all, they are spending $14 million a day.

Im not one of these crazy Rush Limbaugh listening, right-wingers saying people shouldnt have access to affordable health care. It is my understanding that the reason why people cant have affordable health care is because most of the regulations already in place have been written by government in coordination with insurance and pharmaceutical companies.

Overall, I am against corporations and see that as the main problem. They control the government. The government writes laws that help the corporations. As long as we have for-profit, permanent corporations, we will continue to have this problem. I do not trust the government to make health care affordable. Just look at who Obama appointed to “fix” the economy. What makes you think he will be any different with health care?

SquirrelEStuff's avatar

@dalepetrie

Look at the banking execs after the government gave the banks a “bailout.” They still got a crappppp load of money. I dont believe the government getting involved in health care will stop this. If anything it will lead to bigger bonuses because 50 million people is gonna add a lot of money to these companies.

You said that overhead costs of private hc are 1/7 that of the public sector. Doesnt that mean that the private sector is more efficient?

cwilbur's avatar

The question you need to ask, which you aren’t, is how much of the cost of healthcare is eaten up in obscene profits and insurance company “overhead.”

Also, the costs of private healthcare are lower than that for public healthcare for a variety of reasons, among them that private insurers can pick and choose who they insure and that people dependent on public healthcare often forgo the $50 preventive care in favor of the $5000 emergency room visit.

MagsRags's avatar

@chris6137,
*If the government gave a car to everyone that couldnt afford a car, what would happen to the prices of anything associated to cars? gas, parts, service…. that would all rise
I am using this logic with health care.*

If every individual was given a car, they would be on their own when they went to the gas station or repair shop, and capitalism being what it is, prices probably would rise.

Having healthcare coverage is not analogous – your insurance company doesn’t hand you a certain amount of cash and tell you to see if you can pay for an annual exam, a mammogram and a colonoscopy with it. The company is typically setting rates with care providers, ideally on your behalf, but more often with their profit in mind.

One of the dirtiest things about the current system is that someone who is self pay typically gets billed more than the person with insurance, because the insurance company has arranged for a bulk rate – that’s the “hold harmless” discount you see on the EOB (Explanation Of Benefits) that comes to your house showing what was billed, what was discounted, what insurance paid, and what you have to pay. The person paying it all out of pocket gets charged the full price billed by the care provider.

galileogirl's avatar

@chris6137 Remember HS Econ class? Health care is demand inelastic. That means the product is not price-sensitive. If the price of insulin was cut in half, do think there would be twice as much demand? Would the average American stock up on it? Even a diabetic wouldn’t because you only buy what you need. With a limited shelf life that would be ridiculous

Do you think people will sign up for chemo even without cancer just because it is more available? What we will probably see a is greater demand for preventative health care which is more cost effective than crisis health management. There might be more demand for pre-natal care but fewer at-risk babies who might require lifelong intensive health care. And I can promise you that at 62 I will not seek pre-natal visits even if they hand out lollipops.

dalepetrie's avatar

@chris6137 – thanks for pointing out my reversal there…no, the publicly provided health care has 1/7th the overhead of private insurance. As for what’s more efficient, if the private sector really IS more efficient as free marketers like to point out, then it has nothing to fear about being shut down by a public option, now does it?

wundayatta's avatar

It is difficult to answer this question, but the short answer is “not necessarily.” For one thing, right now, due to the Emergency Medical Treatment and Active Labor Act, the medical system already cares for every person in the nation, whether they are here legally or not. However, the care is provided in the most expensive and resource-intensive (including human resources) way—via the emergency room.

Of course, a condition has to be life-threatening or limb-threatening That article quotes the EMTALA as saying ”An emergency medical condition is defined as “a condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in placing the individual’s health [or the health of an unborn child] in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of bodily organs.”

In addition,
Hospitals have three obligations under EMTALA:

1. Individuals requesting emergency care, or those for whom a representative has made a request if the patient is unable, must receive a medical screening examination to determine whether an emergency medical condition (EMC) exists. Examination and treatment cannot be delayed to inquire about methods of payment or insurance coverage, or a patient’s citizenship or legal status. The hospital may only start the process of payment inquiry and billing once the patient has been stabilized to a degree that the process will not interfere with or otherwise compromise patient care.
2. The emergency room (or other better equipped units within the hospital) must treat an individual with an EMC until the condition is resolved or stabilized and the patient is able to provide self-care following discharge, or if unable, can receive needed continual care. Inpatient care provided must be at an equal level for all patients, regardless of ability to pay. Hospitals may not discharge a patient prior to stabilization if the patient’s insurance is canceled or otherwise discontinues payment during course of stay.
3. If the hospital does not have the capability to treat the condition, the hospital must make an “appropriate” transfer of the patient to another hospital with such capability. This includes a long-term care or rehabilitation facilities for patients unable to provide self-care. Hospitals with specialized capabilities must accept such transfers and may not discharge a patient until the condition is resolved and the patient is able to provide self-care or is transferred to another facility.

Given this, it seems quite possible that the demand for health care may not increase at all. Instead, it would change from the most expensive place to get it (ERs) to less expensive places such as primary care offices. Hospitals may have to reduce staff due to a reduction in demand, but primary care providers would see an increase in demand.

The amount of savings this would result in could be estimated, by looking at the number of emergency room admissions that could have been handled in a primary care setting, and the cost per admission, and then looking at the cost for care for the same patients, should they have been treated in a primary care situation, and also been offered preventive care.

I don’t know the numbers off the top of my head, but it seems reasonable to believe that care in a primary care setting is at least half as costly as primary care, and probably much more. An average out-of-pocket cost for primary care is around $100, and if an insurer pays for it, it comes to around $60. The cost for an ER admission starts at around $500, and goes on up from there, depending on the condition. This study estimates that for treating appendicitis, access to primary care would save $441 per person with appendicitis.

Here’s the real data on ER costs: Statistical Brief #111 (January 2006) shows average expenses for a visit to the Emergency Room were $560 in 2003. For people ages 45 to 64, the cost was substantially higher on average ($832). If a surgical procedure was performed during the visit, the average payment was $904. Overall range was $42 (10th percentile) to $1246 (90th percentile). Excludes ED visits included with a hospital admission.

Ok, so I underestimated ER costs, which have probably nearly doubled since 2003. I also underestimated physician office visit costs. Actually they are (or were) $155 per visit in 2004. However, not all visits for primary care are handled by doctors. Many are handled by nurse-practitioners, as well as by higher-paid specialists. This article listed nurse care at Doc in the Box sites averaged $44 in 2004.

I think that the above evidence suggests that there already is sufficient capacity to handle any increased demand for health care services, especially if there is a reduced demand for services. Care site would change, so there would need to be a reduction in hospital staff and an increase in PCP staff. However, these skills are easily transferable between settings, so I don’t think there would be much problem in restaffing PCP settings.

However, I do think there would be significant savings as a result, at least in terms of overall health care spending. However, the problem is that people would only see one side of the equation: increased taxes to pay for care. They wouldn’t notice the other side: increased income due to a reduction in the cost of health insurance. The increase in income would vastly outweigh the increased taxes, however that understanding will no doubt get lost in the rhetoric and short-sighted vision of most people.

I took a look at the Massachusetts experience so far. According to a recent report, the uncompensated care burden is being reduced as a result of the implementation of their Health Safety Net (HSN) plan. Unfortunately, their cost analysis of the health system goes only to 2004, so there is no help there is seeing what impact reform has had on overall costs. We know that the public portion of the system is underfunded, but what we don’t know is whether overall costs are moderating.

I also checked into economic indicators at the Federal Reserve, but they do not present % change indicators. I calculated the percentage changes for their economic index, and it looked like Massachusetts wasn’t doing quite as well as the nation as a whole.

Massachusetts has also had the Rand Corporation analyze a whole set of cost savings measure they could introduce. Rand, perhaps the most conservative of all health care cost analysts found that, depending on assumptions, these measure could result in a slight increase in costs or billions of dollars in decreases. The central trend was for a decrease.

I don’t know how long it will take for the savings of better health to appear. There should be a lag time, perhaps significant, as people need to be educated about how to use health insurance and preventive measures properly.

Anyway, that’s the picture as I see it, based on a couple hours of instant analysis. Hope that’s useful. It’s been instructive to me, anyway.

SquirrelEStuff's avatar

@galileogirl

I see your points. So the price of preventative care might go up, but it will be worth it in the long.
never took any economics classes in high school. wish i understood the importance of it

bea2345's avatar

There seems to be the assumption by some posters that “free” or “socialized” health care is somehow an extravagance. It does not work like that. What happens in many middle income countries is that the health dollar often being inelastic, there is a system of priorities. The emphasis will be on prevention where possible and on control, if not. Where there is universal ante natal care, there are fewer complications at delivery and in infancy. If childhood inoculations are provided routinely, there will be fewer epidemics. There is evidence that girls who have had good nutrition and care in their first 5 years of life will have fewer problems with their pregnancies. A programme of free drugs and supplies for chronic conditions has significantly reduced the incidence of diabetic complications in Trinidad and Tobago. And so on. What will probably happen in the US is a surge in investment in preventive medicine; what venture capitalist could resist the opportunity?

dalepetrie's avatar

@chris6137 – and the problem you describe of allowing the captains of industry write the bills, which is true…this is what ends up happening and it is a major cause of the exorbitant prices in health care, is a real problem, and is the VERY problem I’m trying to stop by insisting on a public option in the bill, because if you strip that out, the bill becomes virtually worthless, because it will end up being a giveaway to the people who are spending all this money to avoid the competition.

Essentially, here’s the deal as to why having an insurance option everyone can participate in would bring prices DOWN, not up. Right now, an insurance company keeps down costs, not in order to pass the savings along to their customers, because health insurance, being mostly provided by employers, is essentially for most people a monopoly. If the amount taken out of your check goes up by 10% every year, well, it’s better than not having insurance at all. And if you have any existing health conditions, you know that by going out on your own, you risk being denied for coverage on your pre-existing conditions. Basically, insurance companies have their customers by the short hairs.

But the insurance companies, being for profit entities, have the incentive to make as much money as possible, and they can justify an increase if average health care costs go up, but they have power to negotiate with medical providers. Consider where I live in Minnesota, we have 3 big insurance companies which have well over 90% of the market on health insurance….Medica, Health Partners and Blue Cross Blue Shield of MN. There are at least. 1.5 million insured in the Twin Cities metro area by one of these 3 companies, let’s assume an even split, each company has 500,000 people they are paying for. So, they go to all the local doctors and say, will you accept our insurance? If they say no, they lose out on 500,000 potential customers. So the insurance companies can say, OK, you charge $250 for this service, we’re only going to pay $100, you still want to take our insurance. Well yeah, they’d much rather have the $100 than lose the customer, I mean they really don’t expect to make $250 for every 15 minute period of time, that’s $1,000 an hour, but if they take $100 for most of their 15 minute blocks of time, and get $250 from the few who aren’t insured, they get $500 an hour for their services…still a pretty outrageously high wage, so the $250 was inflated in the first place.

You can see this if you ever get an explanation of benefits from your insurance company after you see a doctor. You may have a $20 copay for visiting the doctor, you paid it when you went in, and you never see a bill. But you do get an EOB, and if you look at it, it will list the doctor’s appointment and any lab work, and let’s say it’s just a simple office visit and some blood work, you were there 15 minutes, it’s probably going to be in the $400 to $500 range. That will be the first column. The next column will be an amount “disallowed”, which will probably be 70% of the amount so let’s say your bill was $500, you’ll probably see $350 in disallowed amounts. Because the doctor will bill YOU $500 for these services, but has already negotiated that they would accept $150 from the insurance company in exchange for access to half a million customers in their metro area. Then the third column will be amount paid by insurance, of $130. Fourth column will be your responsibility of $20. It will then show $20 in payments applied to the $20, and 0 liability. So your doctor got $150 for that 15 minutes, you paid $20, your insurance company paid $130. Of course, for family coverage, you are paying $1,200 a month on average in America, so your family would literally have to have 10 doctor’s visits a month for the insurance company to be upside down. But because that would have cost you $500, you’d need only 3 doctor’s visits for your family a month to make insurance worth it.

Most people don’t go that often, but they figure a good share of what they’re paying for is the what ifs. For example, I recently read a story from a guy in England who was VERY thankful for public health care when he broke his leg, because of all his concerns as he was falling off a ladder, whether this would break him financially was not one of them. But he figured out that it would have cost him $75,000 if he had no insurance and broke his leg in America. So, it’s kind of like paying in advance for your care, plus a little extra, just in case.

So my point before I got off track here was that with all the insurance companies out there operating in different states, you probably have between 3 and 30 million subscribers each on a national level. That is a lot of leverage to say to the doctors, take our insurance or you lose a huge share of potential clients. Now imagine a public option if it ONLY covered the 50 million without insurance (and let’s face it, a number of people who are paying way too much and who are unhappy with their current insurers would drop out of their private plans and go public), but let’s say they get 60 million subscribers nationwide, that’s a conservative estimate of the demand for a public option. If medical services are so overpriced that they can and will drop their prices by 70% to tap into a pool of say 10 million subscribers, they’d probably be willing and able to drop their prices by 80% to tap into a network of 60 million subscribers.

So what I’m saying is if we continue to weaken the bill that was put forth by the President who has NOTHING to gain by creating a giveaway to insurance companies and strip away things like competition to keep the for profit business honest, that’s exactly the problem you’re worried about by passing reform. And the other thing that doesn’t really add up to me is that essentially, it sounds like you’re saying that the government could make costs go up rather than down by creating more regulations…..well only the government has the ability to make these regulations, so what do we do, cut our losses and let our health care system deteriorate altogether.

You point to the stimulus bill and the banking bailout, but realize much of that came about under Bush, not under Obama. Obama hasn’t done everything perfectly by any means, but look at the auto industry…under Bush it was OK, we’ll write you a check, under Obama it was like, OK, you have x days to fix it, if you don’t, we own your ass. Yes, I trust Obama’s heart is in the right place, and I believe most Democrats want to do the right thing. I think in this case the Republicans, being essentially free market believers and being the party that votes lock step…Republicans can always be counted on for loyalty and the abillity to be whipped into line with party orhtodoxy, so you can’t count on many Republican votes, and there are enough Democrats who are either in the pockets of the insurance companies, or who represent highly conservative districts and are concerned for their political futures, that passing anything meaningful is going to be difficult.

So this is EXACTLY why everyone, regardless of how conservative or liberal they are, needs to stand up and say, reform WITHOUT a public option is NOT reform. And indeed, I’ve seen polls pointing to as much at 82% support for a public option (in theory…when you get to the actual plan which is poorly understood and which is being attacked by a campaign of lies and distortions, support drops off sharply), and we know that there are more than 18% of our countrymen and women who are conservatives. We need to make this a post-partisan issue, and emphasize the human costs of not doing anything. And we need to address the “law of unintended consequences” arguments by saying if reform doesn’t have it’s intended impact, let’s tweak it, but we HAVE to start somewhere, and in theory, what we need to focus on is something that will allow everyone to be insured, no matter what.

Steven0512's avatar

The cost would not go up because Obama will raise taxes on the middle class while putting us another trillion dollars in debt and funding the reform. Ever waited in the emergency room for hours in pain? If healthcare is offered to everyone, I really hope more hospitals are going to be built. Are there really that many unemployed doctors, nurses, etc? Not sure who will be able to care for the huge volume of people.

dpworkin's avatar

@Steven0512 Have you some citations to support these gloomy predictions? Something that doesn’t come from an industry whore?

Steven0512's avatar

I should add that this is simply an opinion, it is fact that Democrats have historically raised taxes….on everybody while putting there hands in business as often as possible. Owning part of GM is evidence and a government run healthcare would also support that. I don’t need countless online reports to formulate an opinion correct?

dpworkin's avatar

Nope. Now we know just what those flat assertions were worth.

dalepetrie's avatar

@Steven0512 – you’re right…you don’t need countless online reports (or any evidence whatsoever to support what you say) to have an opinion. Opinions are like assholes, everyone has one and most of them stink.

I’d also like something to back up what is not an “opinion” in what you say, namely, “Democrats have historically raised taxes…on everybody while putting there [sic] hands in business as often as possible.” Data please.

Steven0512's avatar

Without going online, were taxes not immediately raised on the rich when Obama took office?

dpworkin's avatar

Yes, @Steven0512, thankfully, they were. When Reagan used the tax system to transfer wealth from the lower classes to the wealthy that was OK, but when Obama seeks to reinstitute a little bit of fairness, that’s Socialism? That’s not such a coherent theory, pal.

Steven0512's avatar

What if you were the rich? Do you work less hard for your money? You really justify higher taxes because you make more money?

dalepetrie's avatar

Actually, since the idea that Dems always raise taxes on everyone is a big lie that conservatives love to spread, and mostly get away with, I think I need to offer a history lesson.

The problem with characterizing an increase in taxes on those who make the most money as ‘unfair’ is this…the whole point of having a progressive tax rate is to balance out all the other taxes we pay. Think of the taxes you pay for property, state taxes, taxes you pay built into everything you buy. Your sales taxes, taxes on your utilities, etc. Basically, since usage of most things does not go up in direct relation to your income, ALL taxes OTHER than the Federal income tax end up being regressive. In other words, progressive means for example (these arent’ the actual numbers), pay 0% on the first $10k in income, 10% on the next 20k, 20% on the 30k after that, 25% on the next 50k, and so on and so forth, so that by the time you’ve made $250k or $350k a year, every dollar over and ABOVE that 350k is taxed at the highest rate (36% or whatever it is now). It’s not that once you get to $350k, the WHOLE 350k is taxed at 36%, it’s just the money over and above the 350k is taxed at that rate. And by doing that, it makes sure that a) taxes at the federal level are collected where they can be afforded (if we just put in place a 20% tax for everyone on every dollar earned, that would be a real hardship for someone making minimum wage, and it would be a HUGE savings for someone making a million a year. But the point is, when you average it all out, a person who makes a million a year has all these writeoffs to bring their taxable income down, and maybe they end up paying an average of 15 or 20% on their income overall (though some can avoid most taxes all together by investing the money and shielding it). Now, someone with minimum wage, might only pay 5% in federal taxes. But you look at ALL the other taxes we pay, and the person who makes minimum wage might pay 30% of their income in all these other taxes, whereas someone who makes a million a year pays maybe 1% of their income on these taxes. So the rich pay LESS as a percentage of their income in all combined taxes than do the poor. In order to fix this, we NEED to raise the highest marginal tax rates (which people bitch about because they’re at 36% and Obama is bringing them to 39%, but not that many years ago we had a 95% tax rate on income over $1m a year!).

The other big problem is capital gains…if you make money by investing it in the stock market, when you take your profits out, you pay 15% income tax on that, NOT the 36 to 39% marginal rate you’d pay if you actually WORKED for that money. It’s essentially welfare for the rich, giving the people who don’t work to earn their money the biggest tax breaks. And when you look at CEOs and the like who pull down 8 figures, the money they make is by and large in stock…usually no more than a million of this is in salary. So most of the money made is taxed at rate equivalent to what someone making minimum wage would pay.

So, when a Dem raises taxes on the rich, what he’s doing is making the tax more fair…he’s not raising taxes on EVERYONE which was your original accuasation, in fact when Obama took office, withholding taxes went down for 98% of Americans…98%! The 2% who got hit, I GUARANTEE you were paying a lower AVERAGE OVERALL tax rate than the 98% who got the break. So it is NOT raising taxes on the middle class, it is NOT raising taxes on EVERYONE, it is raising taxes on people who still have this ability to shield most of their income from about 24% tax…imagine if you were in this highest tax bracket, you could take the money you’ve earned and end up paying 15% tax on it instead of 39% by investing…that’s an additional 24% ROI just for investing…which the unwashed masses simply can’t afford to do. The rich have been paying less in taxes than the poor for some time, and hopefully Obama will continue to fix that.

Then the next problem is how all these other regressive taxes come to be. In times when we’ve collected the fair share from those who could most afford to pay it (again, not asking them to pay a higher percentage of their overall income, just an equivalent one), the Federal government has more money to send to state and local aid. But when the government doesn’t have enough money, it doesn’t give this money out as freely, so local governments have to raise taxes, and the only ways they can do that are REGRESSIVE, which makes the tax burden sit even more unfairly on the poor. And to balance state and local budgets, they have to cut essential programs that most benefit those with the least money, so the poor get screwed coming and going.

There is no such thing as a disincentive to work hard to get rich. The more you make, the more ability you have to keep your taxes low. The big lie is this….they say OK, if you raise taxes by 10% on the rich, they figure that OK, if I’m making $240k and my tax rate is 25%, I’m paying 60k in taxes, and I’ll take home 180k, but if my tax rate goes up to 35% at $250k, Well then I’ll be paying 85k in taxes and I’ll only be taking home 165k, so by making 10k more I’m actually making 15k less. This was essentially “Joe the Plumber’s” argument. But no, on that 240k, you were probably paying 10% on part of it, 15% on part, 20% on part and 25% on part. If it goes over 250k, you’ll also be paying 35% on the part over and above the 250k, but it won’t change what you were paying on the first 250k.

So who really raised taxes? Was it Clinton when he brought the top marginal tax rate up to 39.6%, but a) achieved a budget surplus and was able to keep state and local governments flush with cash and b) instituted a per child tax credit for working families, or was it Bush II when he dropped all the rates including the top 39.6% rate to 36%, but basically spent tons of money on forcing us into wars, so we didn’t have any money for state and local governments, which then quadrupled property taxes, raised fees on everything and cut essential servides for the poorest Americans?

Yes, by all means give me the chance between staying under $250k in income and paying a lower marginal tax rate and working a bit harder to make more than that and paying a higher marginal tax rate and I, not being an idiot, would choose the later.

YARNLADY's avatar

There would be no such “supply and demand” impact in the financial relm. The way I read the plan (which changes every day it seems) the costs will be controlled. The real impact is that people who have needed medical help and couldn’t get it will now be clamoring for service, and there aren’t enough providers.

Health care coverage does not equal health care usage so you can’t get from here to there using a financial road map.

galileogirl's avatar

@YARNLADY Even though there will be fewer Drs, per capita a lot of what we will be getting can be handled by nurses and nurse practitioners. Health education, annual check ups, non-emergency tests like EKG’s, uncomplicated treatments do not need a Dr except as a supervisor.

MagsRags's avatar

@galileogirl, I agree except I would describe the typical doctor relationship to an NP as consultant, similarly to the way a neuologist will be a consultant to a family practice physician for a patient with migraines or epilepsy that are not well controlled by standard treatment.

YARNLADY's avatar

@galileogirl I was going to point that out, but it didn’t seem revelant. Kaiser Permanente already does that and it works very well.

wundayatta's avatar

@galileogirl Did I miss it? Why do you think there will be fewer docs/per capita?

I do agree that we can reorganize health care to make it much less dependent on docs for most care, and they can focus on the trickier things—consultants as @MagsRags says. However, I don’t see that meaning we’ll need fewer docs. Health care is very important to people, and I only see that importance continuing to grow. That’s part of the reason why health spending has risen to such a huge part of GDP. Even with reform, it’s importance, I suspect, will continue to grow. The more we know how to do, the more people will want it done, so they can liver longer, and more capably.

YARNLADY's avatar

@daloon You are correct, it would be fewer docs per covered patient, not per capita.

galileogirl's avatar

With a 20% increase in patients-simple math, (which is the only math I am capable of) and it takes years to train Dr’s so that and a more cost effective way of utilizing dr’s work we may never have the same MD:patient ratio again, but that is a good thing. I may not want a 15 minute visit with an MD when 45 minute consultation with a diabetes nurse educator will more efficently do the job,

Garebo's avatar

My question is what really is it 50 million, I hear 30 million then I hear 42 million, big differences; no one really knows for sure, just whatever is politically expedient. Besides the uninsured numbers are always massaged to include non labor foreign born and all sorts of debatable data. A significant number of people can afford having insurance and don’t want health insurance, good for them. If California did not have to pay for health care from non tax paying foreigners, I am sure it would help their hemorrhaging budget deficit.

dpworkin's avatar

@Garebo Yeah, if it’s just 30 million, then fuck ‘em. Especially if they’re furriners.

dalepetrie's avatar

@Garebo – A lot of conservative voices want to throw the illegal immigration issue in there. The problem with that is, most actually DO pay taxes, they just don’t file returns…they have wittholdings taken out of their checks (they sign up with a fake SSN), and are never able to file a tax return to get any overpayments back, nor can they collect Social Security/Medicare benefits. Bottom line with immigration is our immigration system is so fucked up that the people who want to come here are barred from coming here unless they first break the law and apply for an “adjustment in status” and then far too often the government just makes an example of them. If we opened our borders tomorrow, tax revenues would skyrocket…if we allowed these people to come out of the shadows and get jobs where they were going by the book, they could GET health insurance and wouldn’t have to go to ER’s which are 50 times more expensive than a regular doctor. Let’s fix the health care system in a way that everyone who is legal can get insurance (because a public option in health care is still going to require you’re a citizen), and THEN fix our bass ackwards broken immigration system so that we have a reasonable number of people allowed into this country (which was BUILT on immigration by the way, because an influx of unskilled low wage workers has always been and will always be a GOOD thing for our economy), and THEN we can worry about who is still here illegally, leaching off our system…and we can deal with those people harshly as you like.

wundayatta's avatar

The undocumented immigrant issue is a red herring. Hospitals can’t turn them away, due to the Emergency Medical Treatment and Active Labor Act (cited above), so if they are not included in the insurance program, we are shooting ourselves in the foot (and should go to jail instead of the hospital, like that football player, eh).

alive's avatar

IF we used “supply and demand” (which is a very basic economic theory, and therefore not the best analysis technique) it would not make costs sky rocket because demand is actually not changing. There is always the same demand whether someone has insurance or not they still need to go to the doctor when they are sick.

Also, the bill itself would create laws to control costs. This is why we cannot use supply and demand because “supply and demand” is not a law, it is only a principle.

It is a principle that can be manipulated by laws that enforce cost control, such as controlling the price of water, so that everyone has accesses to clean running drinking water, and consumers are shielded from raising costs that would eventually be unaffordable.

(sorry, that is a run-on sentence, but i hope you catch my drift)

Garebo's avatar

@pdworkin: I care about the vast illegal immigrants that need care in this country and they should it is just too bad they were so easily invited in. A free lunch is a free lunch and it attracts more free lunches.
Now, Medicaid could afford to continue to take care of the poor as it was designed to do, and the Medicaid program could be expanded to provide better coverage. Any applicant for Medicaid would have to be a legitimate US citizen, by natural birth or proper naturalization, and not by amnesty, which should be forbidden to any illegal immigrant lawbreakers. Our current system would work the way it was supposed to if all these abuses were terminated, and the government stopped invading the funds set aside for the Social Security, Medicare and Medicaid programs so they can have their pork orgies and fund pet Elitist projects

dpworkin's avatar

@Garebo, When I read your posts I wonder what it is that you are really scared of. I don’t think you even know for sure, but could it be that whites will soon no longer be a majority in this country and you want things back the way they used to be?

Sorry, pal. I’m afraid you are just going to have to get used to your new status. The most popular male infant name in Texas is now Juan.

wundayatta's avatar

@Garebo Not providing insurance for undocumented immigrants is just plain stupid. We already provide medical care for them—hospitals are required, by law, to care for every emergency that shows up at their doors. Of course, the ER is the most expensive place to provide care.

Undocumented immigrants, because they are afraid of deportation, usually wait until it is no longer possible to wait, and by this time, to care for them will costs tens or hundreds of thousands of dollars. Not 100 dollars, which is what it would cost if they had gotten to a doctor in time to prevent the hospitalization.

Of course, sometimes they don’t get to the hospital in time, and they die. Is this the policy you’re advocating? Let undocumented immigrants die?

Free health care may indeed attract sick people from other countries, but having the new health care reform program exclude undocumented immigrants won’t change that one bit. The only thing that will change it is if hospitals are allowed to let undocumented immigrants die.

Your policy would actually result in higher taxes or fewer government services. It costs more to exclude folks from free health care than it does to include them. I don’t know about you, but I’m not anxious to pay more taxes or get less for my tax dollars. Of course, you probably like paying taxes.

SquirrelEStuff's avatar

We should give them health care and when they show up to use it, deport them.

wundayatta's avatar

Which guarantees they won’t show up to use it unless they are on death’s door, and once again, we, the taxpayers pay higher taxes to cover their care.

This is a cooperative world because cooperation is more cost-effective. Even conservatives should understand this. Business is a fairly successful form of cooperation. Not to mention the dictum to be our brothers keeper. We are our brother’s keeper because it works. Not because it is in the Bible, or because it is moral. Morality is about what works.

Forgiveness and help are much more efficient and cost-effective than holding grudges and trying to make other people’s lives hell.

dalepetrie's avatar

….or….we could make it possible so that people who actually wanted to come here, who payed taxes, obeyed our laws and were willing to do the shit jobs no Americans would do, could actually legally immigrate rather than being forced BY the US Government to cross the border illegally to have any hope of becoming a legal citizen. Maybe we should fix our fucked up immigration laws so they a) make sense, and b) don’t victimize humanity, before we start letting them die in the streets of disease, or destroy the lives they’ve built by shipping them back to a country that is now more foreign to them than the US.

cwilbur's avatar

Immigration is nearly as broken as healthcare.

A friend of mine is an Italian citizen – speaks three languages, mechanical engineering degree. He married an American citizen, and they’ve been repeatedly interrogated by the INS to establish that he didn’t just marry her to get American citizenship. He’s also had an incredible number of hoops to jump through. And this is not someone who’s a burden on the state—he’s been continuously employed by a technical publisher in Italy, who sends him translation work to do, and he pays US taxes on the income.

SquirrelEStuff's avatar

I found some interesting news today..

Pres. Obama has repeatedly mentioned including the use of electronic medical records as part of health care reform.

Verichip Corp Re-Launches its VeriMed Health Link Electronic Health Records System

The Company believes its history and expertise in patient identification and EHRs will position it to benefit from stimulus funds provided under the American Recovery and Reinvestment Act (ARRA) of 2009, which authorized $23 billion in spending for healthcare information technology, with a concentration on the implementation and adoption of EHRs.

bea2345's avatar

Why are Americans so obsessed with non-issues – death panels, for example? The one and only issue that should be exercising every one right now is that of access. Access to health care, access to information about best options for treatment. It is a fact that some millions of US citizens/residents have no health insurance, that should bother people more. It would be nice to know exactly what is wrong with the public option: if it puts inefficient and overpriced insurance services out of business, good. Of course public services have a downside: waiting lists for surgery, for MRIs, etc. The upside is that for most procedures there is no bill, no waiting. And as for rationing, the insurance companies practice it even now; let us remember poor Christopher Reeves.

dalepetrie's avatar

@cwilbur – I’d agree it’s nearly as broken. That whole idea of marrying a US citizen to get citizenship is Hollywood bullshit. Even to this day they make brainless movies starring no talent hacks like Sandra Bullock which are about someone getting deported so they have to marry an American citizen. First off, in real life, if Bullock was the executive boss somewhere in the US, she’d have an H1-B work permit and as long as she didn’t get fire/laid-off, they wouldn’t deport her. Because for Canadians, Mexicans and 18 other nationalities which most want to come to the US, our government says, “we have enough of your people” and doesn’t issue immigration applications (so the whole idea of people who are here illegally should go home and get in line, well guess what, pal…there ain’t no line).

If you’re “lucky” enough to live in one of the other 174 countries on the planet, you could APPLY for immigration, but the US, a country of 325 million people, only allows 55,000 people to apply, and again, this is only an application….not 55,000 people allowed to IMMIGRATE, but 55,000 people allowed to apply, if all 55,000 applications are rejected, well que sera sera.

But even if every single one is accepted, well, that’s an allowed growth rate of only 1.7 hundredths of a percent of our population, in a country which is in the lowest 10 to 15% population density on the planet. But even so, that doesn’t help you if you’re from the 10% of the world where people most want to come from. If you are from one of THESE countries and want to immigrate, you have three choices.

1) Become employed by an American company that is willing to get you an H1-B Visa and pay to ship you over.

2) Marry a US citizen, but do it while in YOUR country, because if you come here illegally to marry someone, you have broken the law and they will deport you.

or

3) Sneak over the border. If you get caught, make sure you show up for your deportation hearing. At the hearing request and adjustment in status. Pay thousands of dollars in countless court filings over the next decade and HOPE you get lucky.

If you don’t get lucky, it doesn’t matter if you’ve been married to an American citizen for a decade and have several US born children. The Conservatives will just make up a divisive term like anchor babies and the US government will arrest you, in front of your entire family if necessary (and even if it’s not necessary, just to be pricks about it), and deport you. Then you have to wait 10 years before you can even visit again, or you will get arrested. If you decide to apply for a humanitarian parole, which is supposedly on the books so that if some sort of family medical emergency which is a matter of life and death should arise requiring your presence in the US, that you might eventually be granted this temporary exception, IF you have both your state Senators write on your behalf and have a US citizen pledge full responsibility (including criminal and financial) for you while you’re here. Of course, in real life, it never actually works.

Source – personal experience trying to help some friends who were victimized by this shitty system.

Side note, these same friends were also victimized by the health care system. Even though this woman, a mother of two, married to an illegal immigrant who did everything the way you’re supposed to do it, worked 3 jobs, as much as 80 hours a week, as did he, just to support their kids and pay their mortgage, the day he was deported, she suffered congestive heart failure. Her inability to take care of her kids and her own father pledging his personal responsibility for the guy was not enough to get him back into the country. If she’d had health insurance at any one of her part time jobs, she could have afforded to have seen the doctor 5 months before she suffered heart failure when she first came down with pneumonia, which eventually attacked and nearly destroyed her heart. It took her a year to get Social Security by the way (for anyone convinced it’s so easy to just become a lazy non worker and suck off the government teat), and then because she borrowed some money from her father, they considered it a gift, not a loan, and took away almost a year’s worth of benefits for her. She lost her house. Such a great system we have!

Garebo's avatar

@pdworkin: Sorry to hear that from you, maybe I am too sentimental with my native culture and upbringing. Yes, you are right, their is a bit of ethnocentrism in my belief system, and I am sure their is with yours whether you know it or not, but I think it is natural for people to be comfortable in their surroundings. Just like any incoming emigrant surge, they prefer to be with their culture and usually avoid homogenizing. Good for you, being such a hardy globalist, II am sure you will enjoy your new world order.

mattbrowne's avatar

No. But people with better incomes have to show solidarity. This is how it works in Germany. Everyone gets health care. Even the unemployed.

bea2345's avatar

@mattbrowne – hark to that “Even the unemployed.”

alive's avatar

re: solidarity. that is the difference between americans and europeans.

the american ‘buzz’ word is “patriot.” while the european buzz word is “solidarity.”

Strauss's avatar

Another negative effect of the health care system as it is right now it our ability to compete on a global scale. Since health insurance is such a large portion of our costs in the economic chain, it adds cost without adding to the value of anything manufactured in the US

mattbrowne's avatar

Actually, in American history solidarity was important as well. How could the pioneers have survived in unchartered territory?

alive's avatar

@mattbrowne i am not talking about the act of solidarity. when i say “buzz word” i mean the discourse. the discourse in europe often includes the word, and ideology of solidarity, while in american discourse we do not use that word, or that ideology.

mattbrowne's avatar

@alive – Makes sense. Thanks for the clarification!

bea2345's avatar

And there is another thing that is getting lost in the scramble: if some people don’t have health services, all are at risk. As an example: there is a squatter community at the top of a hill overlooking the house where I used to live. At the time – some 15 years ago – the people had no pipe borne water. They would come down into the village to the standpipe and it was a common sight to see them toting these heavy bottles and buckets. On occasion they used the river for bathing and washing clothes. Then the public health clinic in the district reported some cases of highly contagious waterborne disease: overnight the authorities established a gigantic water tank in the community, and every now and then the Fire Services would appear with a water tender and fill it. As an aside, the Fire Service men had to scale a steep hill to access the tank, dragging the hose with them because the footpath was pretty nearly perpendicular.

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