How Subsidies, Taxes, and Fees in the House Bill Meet the Democracy Test

"It was when you insisted that the, uh, the young lady, Tish—that Tish must pay, too. 'Tone-stapple,' or something like it."

"Oh, 'tanstaafl.' Means 'There ain't no such thing as a free lunch.' And isn't," I added, pointing to a FREE LUNCH sign across the room, "or these drinks would cost half as much. Was reminding her that anything free cost twice as much in long run or turns out worthless."

Robert A. Heinlein

Ken Watts - Tue, 11/17/2009 - 12:14pm

IN THE PREVIOUS POST WE LOOKED at three areas of the House health care reform bill, to see just how democratic they really were.

The question I posed there was how much power these proposals transferred from the large wealthy corporations to the average citizen and patient:

TriangleArrowWealthToPeople

The first three areas were the Insurance Exchange, the Public Option, and greater supervision of the health care industry:

 

Provision Moves Us Toward Direction
The Insurance Exchange Democracy, Freedom
The Public Option Democracy, Freedom
Greater Supervision Democracy, Freedom

The two other major areas in the bill are government subsidies, and funding.

I take those up today:

  1. The government would subsidize health care for the disabled, the poor, and the elderly.
    • Medicaid would be expanded to cover a larger portion of the poor, and newborn babies who aren't yet covered by another plan.
    • Medicaid payment rates to health care providers would be increased.
    • There are measures to address the Medicare drug coverage gap.
    • Government subsidies will help the poor, on a sliding scale, to afford other plans.

    Although their effects are not as direct at the three above, each of these measures empowers all of us by improving public health in general, creating greater security for all, and taking the burden off of emergency rooms.

    In addition to the obvious benefits for the average citizen, removing the burden of health care worries from the backs of our poorer citizens will make it that much more likely that they move into the middle class.

    It's hard to concentrate on finding a good job, or building a small business, when you're obsessed with worry about health care for your children, waiting long hours in an emergency room for routine health-care, or trying to make it through the day without the medicine the doctor prescribed.


    Provision Moves Us Toward Direction
    Government Subsidies Democracy, Freedom


  2. Of course there's no such thing as a free lunch. We will have to pay for this democratization of the system.

    The bill includes various mandates, taxes, and fees:
    • Employers will have to support the system by offering health benefits to workers or paying a payroll tax to help support the system.

      This is a democratic move in two ways: it provides insurance for employees, who generally are poorer than employers, and the government will offer exemptions and tax credits to small business to offset the expense, which will help small business compete with big business.
    • Legal U.S. residents (with some exceptions) would have to enroll in health insurance or face a tax penalty.

      This allows the system to work by ensuring that the expense is spread out among the currently healthy and the currently sick. It's not an especially democratic move in itself, but it does help make the democratic direction of the overall reform feasible.
    • There would be an additional tax on the very wealthy (1-2% on income over $350,000 per year, and 1.5-3% on income over half a million per year, and 5.4% on income over a million).

      Obviously a democratic tax, since it takes a tiny bit of money (and therefore, power) from the wealthy and uses it to provide some choice and security for the poor and middle class. The power transfer is definitely downward.

     

    Provision Moves Us Toward Direction
    Funding Democracy, Freedom

Every single measure is more democratic than it is socialist or capitalist.

While government certainly wrests a good deal of power from wealth under the plan, it passes most of the power right on to the average citizen—we, the people—in the form of both choices and security.

And it uses a free market model to accomplish most of this.

On the whole, the bill would move power around health care in this country away from wealthy corporations and toward the average citizen:

TriangleHalfArrowWealthToPeople

It's not perfect, but it's in the right direction, and might push power even closer to us than the above chart indicates, if everything works well.

Next: the Republican plan...