How a 3% Medical Tax on Everyone Could Yield $1.8 Trillion in Savings

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Senator John Marty (D-SD66) penned an interesting piece entitled “The Anniversary of Medicare – A Time to Reflect and Act” … (highlights below) :

during the next five months, many previously uninsured Minnesotans will receive health care coverage through the MNSure insurance exchange of the Affordable Care Act (ACA).

but there will still be a couple hundred thousand Minnesotans without coverage, and many more who have coverage will not have affordable access to some needed services. Although the ACA will close some gaps in our dysfunctional health care system, gaps will remain, and many people needing care will fall into those cracks.

Senator Marty then makes a pitch for Minnesota Health Plan (MHP), a Medicare-style plan for everyone … and if you have not already done so, here is a petition requesting Governor Dayton and legislative leaders to develop a single-payer system.

While individuals states may become the incubators of a single-payer system, the potential cost savings for the country is a staggering $1.8 Trillion.

$1.8 Trillion … that’s what Economics Professor Gerald Friedman of the University of Massachusetts at Amherst has determined based on an analysis of HR 676: The Expanded and Improved Medicare for All Act (which has over 40 co-sponsors including Keith Ellison (D-MN-05) and Rick Nolan (D-MN-08).

In 2014, under the single-payer system created by HR 676, the savings would be enough to cover all 44 million uninsured and upgrade benefits for everyone else.

95% of all U.S. households would see an INCREASE in their net income in spite of what they may perceive to be an onerous taxes. It is only the top 5 percent that will be paying more in taxes than they will be receiving in health care benefits.
The taxes range from instituting a 0.5 percent tax on stock trades and 0.01% tax per year to maturity on transactions in bonds, swaps, and trades; to a 3% payroll tax on the bottom 40% of income earners … and yes, if you earnings are greater than $225,000, a 6% high-income surtax applies.

As the Professor Friedman’s report suggests, rather than fixating on just the taxes proposed in HR 676, it is much more important to look at the change in income that each person faces as a result of these tax policies. According to his analysis, even those with an household income of $216,922 will still see a savings by slashing the administrative waste associated with the private insurance industry and reducing pharmaceutical prices to European levels (Gosh, does anybody remember Gil Gutknecht’s plan drug reimportation legislation – HR 2427 ?).

As President Obama reminded us on Friday,
There is no doubt that in implementing the Affordable Care Act, a program of this significance, there are going to be some glitches. No doubt about it. There are going to be things where we say, you know what, we should have thought of that earlier. Or this would work a little bit better. Or this needs an adjustment.

The President also said :
The one unifying principle in the Republican Party at the moment is making sure that 30 million people don’t have health care and, presumably, repealing all those benefits I just mentioned — kids staying on their parents’ plan; seniors getting discounts on their prescription drugs; I guess a return to lifetime limits on insurance; people with preexisting conditions continuing to be blocked from being able to get health insurance. That’s hard to understand as an agenda that is going to strengthen our middle class. At least they used to say, well, we’re going to replace it with something better. There’s not even a pretense now that they’re going to replace it with something better. The notion is simply that those 30 million people, or the 150 million who are benefiting from the other aspects of Affordable Care, will be better off without it. That’s their assertion — not backed by fact, not backed by any evidence. It’s just become an ideological fixation.

Yet, with John Marty, Keith Ellison and Rick Nolan, they are not satisfied … they know we can do better.
Heck, according to a 2008 study in the Annals of Internal Medicine, 59 percent of physicians support legislation to establish a single-payer system. Several industrialized countries have also had established single-payer or universal healthcare systems for at least 30 years, including the United Kingdom, Canada, Australia, Sweden and Norway.
So while the House GOP is willing to vote on a repealing the Affordable Care Act — at least 40 times over 102 days in session, they still refuse to tell us, the Replacement.
In the absence of that, HR 676 deserves a vote.

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