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On Takers and Payers
Remember the big flap about the Supreme Court ruling on the Affordable Healthcare Act (AKA – Obamacare – ACA)? The issue that made the headlines was that the Supremes ruled that ACA was legal, provided that the penalty for not having health insurance was collected as a tax.
This is a big deal as the penalty ($700 a year per person) was supposed to be the discipline that forced people to go out and buy their own insurance. One either acquires health insurance, or they pay a price.
The CBO took a look at this last week (link). The results surprised me. The reality is that few people will end up paying the penalties. So the basic premises of ACA is actually a fraud.
CBO estimated that there will be 30Mn uninsured in 2016 when ACA goes into effect. Of that 30Mn, the following groups will be excluded from paying the penalty:
1) Undocumented workers.
Really? But that is 10Mn people; a third of the problem!
2) Religious Beliefs
Huh! What religion is that? If it gets you out of paying taxes, I want to join!
3) Native Americans
Okay, after all, it is their land.
4) Individuals and families with low incomes.
I can live with this. But isn’t this where we are today? Poor people don’t have health insurance today, and they don’t have to pay any fines. In 2016 they will still have no insurance, and they won’t have to pay any fines. What has been accomplished?
5) Anyone who does not file federal income taxes.
This is directed to those with income of less than $10k per year (same as #4), but there are an awful lot of people who don’t file taxes who are making much more than the minimum amounts. Most waiters and bartenders would fall into this group.
6) Individuals who can’t afford the cost of health insurance.
The annual cost of health insurance must be less than 8% of an individual’s income for the penalties to apply. What is this new insurance policy going to cost? If the answer is $250 per month (too low in my opinion) it means that anyone with an income less than $37,500 is excluded. If the cost of that Ins. policy is $500 a month (a more reasonable estimate), then anyone who has annual income of less than $75,000 would be excluded.
With these carve outs the number of individuals who would be subject to the penalty falls to 6Mn (80% drop). But it gets worse:
Among the uninsured individuals subject to the penalty tax, many are expected to voluntarily report on their tax returns that they are uninsured and pay the amount owed. However, other individuals will try to avoid payments.
Oh boy! How many of the remaining 6Mn will “voluntarily” pay the penalty, and how many will seek to “avoid” it? At least half will avoid it. There is not much risk of getting hit by the IRS if one’s income is < $75,000. The IRS does not have the manpower to chase after those who “avoided” the penalty. The CBO recognizes that the actual amount of fees collected is subject to:
the ability of the Internal Revenue Service (IRS) to administer and collect the penalty.
The only people who are going to end up paying are those who have something to fear from an audit.
Households with income that exceeds $60k are estimated to constitute about one-third of people paying penalties and to account for about two-thirds of the receipts from those penalties.
The CBO reckons that Uncle Sam will collect about $8Bn a year in fees. This money will be used to offset some of the costs of the uninsured. The Penalty is also the “stick” of ACA that forces people to get insurance by one means or another. I see it differently:
- Post the introduction of ACA there will still be 30Mn people without insurance. These people will still get sick or injured; they will continue to be a drag on everyone else.
- The fees/taxes that are supposed to provide discipline and revenue for ACA will accomplish very little. I will be amazed if the penalties total more than $2Bn a year (peanuts). There will still be 30Mn people without insurance, and they will get sick (not peanuts).
- The Administration and Congress have cooked up a deal that got amended by the Supremes that will result in a great new opportunity for people to cheat on their taxes. Millions will take advantage.
- ACA is a wealth redistribution program. ACA will create more TAKERS; the PAYERS will foot the bill.
++
Mitt probably lost any chance he had with the election with is words about the “other” 47%. But the fact is the country is divided between Takers and Payers. The CBO head, Doug Elmendorf had this to say about the dilemma the country faces:
Formidable? I would say impossible.
Four years from today the Taker - Payer ratio will exceed 50%. The argument then will be the same as it is today. In order to pay for the cost of government, taxes will have to be much higher than the historical norm. But the necessary higher taxes will drag on the economy, and growth will be far less than potential. Sub-par growth means high unemployment and low tax receipts. The vicious debt spiral will continue.
Where does this lead us? Elmendorf's thoughts:
The conclusion is that we are headed into a crisis, and when it happens we will not have the resources available to fight that crisis off. What kind of plan is that?
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Any government service I deem useful could be provided by the free market for a fraction of government cost. If you can't understand that, you are an honest to god idiot.
If you want to pay five times the value for something, be my guest.
Just don't force me to be a slave to your desire for government.
Sir!
I'm a honest to God idiot, I don't give a crap about dogmas, I evaluate what I see or experience, socialist capitalist or whatnot, don't care.
What I do care is what my hard earned bucks buy, and according to my very precise and down to my wallet survey proves, USA health care sucks!
If you don't believe me, ask my insurer why I have to pay shit load extra for a trip to USA when I can go to the most expensive countries on earth without any additional cost.
"What I do care is what my hard earned bucks buy"
Me too!
Which is why I don't want to pay for someone else's healthcare.
Take Universal Healthcare and shove it up the collectivist's asses.
Period.
There's something very misleading (wrong) here...
"Universal Health Care" is not "offered" in Switzerland
Private Health Insurance ownership is mandated by the State (like Obamacare but w/o the loopholes and with less special interest carveouts)
Also - equating OECD membership with being "developed" is elitist and empiracally innacurate, and your membership roster is actually about half a dozen countries short.
Swiss health insurance is also a lot cheaper than the American variety, and the benefits are better to boot.
Not in my experience, the Swiss insurance is currently is currently 50% more expensive than the US policy, but I'm sure DC can fuck that up too if given enough time, since the retard-in-chief is apparently incapable of looking at simple graph and figuring out which way he was supposed to bend the cost curve...
I was quoted about 300 Swiss Francs per month for myself. I was paying Blue Cross over $900 per month in the U.S. Swiss coverage was a bit better.
I only have the most basic insurance since I never get sick and can take care of a lot of stuff (EMT or herbal) myself, but for 2012 Anthem/Blue Cross is running USD110/m and Atpuri is CHF174/m, and the few medical services I do purchase (like yellow fever vaccinations) aren't covered under any plan that wouldn't cost ten times as much.
Since Switzerland is in the 2013 cutover right now it looks like 3%-5% increases across all the providers in ZH, but I fully expect Anthem/Blue Cross to jack my rates more than $3 (which was actually about the amount of my annual Obummer-Care refund).
Yes, Estonia, Israel, Slovenia and Chile have since been added. True. All of which have to some degree, if not entirely, universal health care for all citizens.
As far as equating member states to being developed as "elitist". I'm just citing who actually are the member states. I didn't make up the list, it is what it is. If you have a list you'd like to propose to them, then by all means do so.
You can contact the OECD here: http://www.oecd.org/about/budget/membercountriesbudgetcontributionsfor20...
As far as Switzerland goes. You are basically right. But the details are far different than the US "plan". From what I've researched...it's like this (general description):
Swiss are required to purchase basic health insurance, which covers a range of treatments detailed in the Federal Act. It is therefore the same throughout the country and avoids double standards in healthcare. Insurers are required to offer this basic insurance to everyone, regardless of age or medical condition. They are not allowed to make a profit off this basic insurance, but can on supplemental plans.
The insured pays the insurance premium for the basic plan up to 8% of their personal income. If a premium is higher than this, then the government gives the insured a cash subsidy to pay for any additional premium.
In case of pregnancy there is no charge. For hospitalisation, one pays a contribution to room and service costs.
(sounds completely reasonable to me)
It is not he who bleeds ,but who will pay.
The Government will never run out of fiat.
Who in the United States is denied access to health care ?
The comparison of these countries to the US is laughable. The populations are about the size of one of our smallest states.
Additionally, the greatest healthcare technology break throughs have almost without rival have come from the US system. Not any longer if Obamacare moves (heres that word again) forward. The government can't even deliver mail in this country under a budget and you want them running healthcare?
All this amounts to is a power grab by the democrats to eventually include more people (doctors and nurses) in their unions.
As for Switzerland it might sound "reasonable" if that is all there was to it- but Switzerland is one of those places where the devil is in the detail (sort of like the $1000 speeding ticket and posible jail time for driving 16mph over the speed limit in the wrong place)
If the premium (which doesn't even include the deductible) is more than 8%they of one's income then have to go the Geminde (town government) if they want to ask for the financial assistance, and then they will start asking questions like, do you own a car, if so what kind, do you mind if we take it to cover the money we are giving you...
The range of treatments detailed in the Federal Act is also not straight forward or by any means exhaustive, something a simple and widespread as perscription glasses (which probably run SFR 400-600 per pair) are not covered, while a basic eye exam is, subject to the plan deductible (which can run into the thousands of SFR)
While one cannot be denied the basic health insurance, pricing vaires by age, sex, canton of residence, for the same coverage from the same provider
As the for the OECD, you equated membership with being developed.
Here's a no-brainer list of economically "developed" countries that aren't OECD members
Bahamas, Bahrain, Cayman Islands, Cyprus, Gibraltar, Guernsey, Hong Kong, Isle of Man, Jersey, Kuwait, Liechtenstein, Malta, Monaco, Qatar, Saudi Arabia, Seychelles, Singapore, Taiwan, United Arab Emirates
And here's a more nuanced list of countries that are more developed than certain OECD members, but then there are so many ways to slice and dice "developed" subject to debate...
Brazil, Croatia, Georgia, Lebanon, Panama, Peru, Russia, South Africa, Ukraine, Uruguay
Some countries take driving a great deal more seriously than the U.S. We do things like using stop signs to slow down traffic in residential areas rather than enforcing the speed limit. Of course then people just roll through the "all way" stop sign at every corner.
And France is broke as a joke, just like these here United States of Fascism.
Of course France is broke, as are most western countries. The difference is in who will survive the debacle, the people or the banks.
buya
Bruce, you need a graffiti picture that says, "Fucked."
I'll find one....
Great article Bruce. It is one of the most significant tax bills ever to hit the nation and yet very little is written about it in MSM. Your title is spot on about the Takers and Payers. Reminds me of an interview with jack Welch a few months ago. He said this election will be a turning point in our history. 'It's a bttle between the unions, government employees and entitlement people on one side and everyone else on the other."
I thougth it was interesting he lumped "unions, government employees and entitlement people" togther.
Actually, such things can be made to spec
We provide people all manner of benefits and entitlements but only healthcare provides that the poor get essentially the same care as the private paying consumer. For example a public housing project apartment is housing but it is not the sort of housing I would care to live in nor are many public schools the sort of education I would accept but a derelict off the street is ( and was ) put in a hospital bed next to mine. Now why should a street person suffering from an alcoholic/drug overdose be brought by ambulance to a privately owned hospital to receive care. I'm not saying do not treat such people only that they should not get the same level of care ( $4000 per day hospital rooms) as private pay patients. They should be placed in a ward and given minimal treatment.
Some of those projects are real nice looking when they are built.
And they often have air conditioners dripping and dryers puffing in the windows, while the hard working market renter down drips sweat and huffs and puffs while hauliing laundry to the laundromat.
Rhodesia used to be a nice place too. Detroit was once "The Paris of the West." I can see.
The problem is NO competion on health care costs.
The US system is FUed because of Govt.Just as the US system evolved from Govt.
wage freexes distorting remuneration.
How does imposing a Govt.monopoly(thats where its going) solve this ?
Probably the most socialised system in the world is the National Health Service in the UK.
But private healthcare costs are 10% of here.The British Govt. does not interfere in
health insurance,mandate its coverage etc.
The providers have to compete with each other, and the NHS.
I'm certainly not praising the NHS,even with its many flaws its way better than the ACA
is likely produce.
If you were a true elite rather than a faux elite, you wouldn't need to share your hospital with anyone, let alone one from the "lower class".
Bill Moyers: "Look Who's Really Writing The Healthcare Bill - It's Big Pharma & The Insurance Lobby"
no shit sherlock.....does anyone really think lobbyists from big insurance and pharma (and Drs. groups) write health care law? and take a wild gues who writes 'financial reform' law....bankers' lobbyists too.....
Have you considered that perhaps the true injustice is that you have to pay $4000 per day for a hospital bed?
The true injustice is that government intervention in healthcare drives up costs several fold.
My birth cost my parents about a weeks work. The recent birth of a friend's first child cost about three months work.
As Harry Browne used to say: Government breaks your leg, then offers itself to you as a crutch.
Wake up little tomatoes.
No mystery, the hospital and everyone else providing services to the wino has to charge the private pay patient twice. Once for the care they provided me and again for the care they provided the wino. Its how are healthcare system works. From each according to his ability to pay, to each according to his need.
Marx is doing a happy dance. Can't decide if its Groucho or Karl.
Doesn't matter -- they're both Jooze.
Yup. It's getting crowded in here with all these elephants in the room.
Not once since the liberals ramrodded ACA into law have I anticipated anything but a healthcare system that will be even more totally FUBAR. Government mandated insurance ranks right up there with the most evil of predatory schemes. You cannot operate a vehicle without it. You cannot negotiate to buy a mortgaged home without it. And worst of all, the responsible are forced to underwrite all forms of human irresponsibility.
No wonder so many choose to go off the grid.
How does going off the grid exempt you from auto and health insurance? You still need to drive on the government roads and you may still need the services of a doctor or hospital. I'm not being confrontational. I'm just really trying to understand what you mean by going off the grid to avoid such intrusions into liberty?
Believe me; I know from experience. When someone rear ends your car there is a much better chance that they are driving a junker and don't have automobile insurance than that they are rich and in a hurry.
P.S. In Virginia you don't have to have automobile insurance. The DMV just ask that you send them $400 per year for not having insurance; this $400 is not buying any insurance it's just a tax.
P.P.S. People who don't have insurance don't usually pay the $400 either. They just get one more charge added to the tickets.
When you go off the grid, you become as self-sufficient as possible. This might require you spend a lot of savings, or maybe even borrowings for some people. But once you've got your little self-sufficient plot in the boonies, you don't need to earn much... or anything. And as always, if you don't earn much, you're not taxed... or required to buy health insurance under Obamacare.
The system is designed to ROYALLY screw the middle class. So if you spend your bucks to change your lifestyle into a comfortable but super low-cost lifestyle... you take yourself out of the theft crosshairs. This approach doesn't eliminate ALL hassles in a totalitarian police-state, but it sure does eliminate quite a few, and reduce many others.
Of course I prefer my way, which was to move out of the USSA 3 years ago. But I still set up a self-sufficient lifestyle in the extreme boonies, and it has been just fabulous. I love it.
Until the day the State comes to confiscate your land for not paying property taxes... You can't truly be off of the grid. Only two states, Nevada and Texas, allow for limited allodial title, and you still have to pay property taxes. I do agree that you can be off the grid, with respect to your own physical needs. I also agree that the system is designed to screw the middle class. Out of curiosity, what part of the world are you in?
Well, I'll tell you the several places that I chose between after checking out many possibilities. One is empty south pacific islands. Quite a few options exist here, including some as large as ~20 kilometers long with high regions well over 1000 meter altitude. Of course most practical options are quite a bit smaller and lower. Another is the boonies of Mongolia. Several portions in the high andes are fabulous.
I spent days to weeks in several places before I made my final choice. In some of the places in the high Andes that I considered, I found micro-villages of ancient people who were the most amazingly honest, genuine, benevolent people you can imagine. No, scratch that, you can't imagine unless you've lived with them for awhile and treated them well. Once they know you are also honest and benevolent, you find they don't care about any other of your personal characteristics whatsoever.
Also, governments simply don't mess with them. Some of these micro-villages have never had or spent a single penny their entire lives. They have been visited by outsiders before... though rarely... and they more-or-less understand what the outside world is like. Now and then young ones leave for the city. Some return in a few months, others never return. They don't pay property taxes and the government has no interest in them. In fact, there seems to be an understanding that "they were here" long before any formalized government was established, and are explicitly left alone.... completely left alone. And indeed, what would any government want from them?
They live a simple, happy existence. Similar situations exist in Mongolia and other places on this planet with extremely low population density. If you're willing to bring your own high-tech self-sufficient living goodies (which ain't cheap to establish... as in $200K or so), you can live an extremely comfortable, stress-free life. Which I am.
Hint: If you are stupid enough to "register" anything (especially real-estate), you have begged for serious trouble. If you ever identify your location on paperwork, you are terminally insane! Also, design and build everything in a manner that it can be moved if necessary, just in case. By doing so, you assure you won't ever have to move. BTW, if you want to live without property taxes, but still want to live in a "real country" and "non-boonies", there are several countries where you can do that, including Fiji (no real-estate taxes).
Many of the best places have horrific governments in theory, but in practice they're great. Take Fiji for example. They have some psycho-dude who declared himself king several years ago. But he spends all his time and effort screwing around with other self-delusional wackos in and around the capital city, and the entire pseudo-government is like a clueless bunch of keystone cops. So around the capital city you might have some hassles, but pretty much anywhere else, especially remote islands, you're pretty much as free as you can get. The crazy result of the current state of the world is this --- the very best places to live in practice are often horrific on paper or in theory, and the very best places on paper and in theory (like the USSA) are horrific places to live (if you care about liberty and the day the SHTF).
Finding the great niches isn't easy. It took me a long time and a lot of exploring in person to find the best places. I've only mentioned a few of them above. I'm always on the lookout for someone seriously serious about setting themselves up a self-sufficient place somewhere I'm not. But so far I haven't found many that aren't somewhere in the western world... which I don't trust.
There are thousands of people who purchase cheap bare minimum car insurance for 30-60 days, just long enough to register the car with the state each year. Then drop it til next year's registration date rolls around. They have the sticker on the license plate, so they just roll the dice to avoid a ticket imposed by the popo for expired insurance. That's why you are wise to pay for uninsured motorist coverage. Anyone can walk into an emergency room for medical care...get a bill and trash it. Both avoidance strategies are epidemic here in CA.
Humans will quickly figure out how to beat the ACA tax....sure as night turns to day.
Thanks for that information. I'm in Canada so I had no idea about this. I'll have to see if we have something similar here - probably do. I guess there are ways to opt out. It's all a matter of weighing the risks and determining what is more important - liberty or a continuous safety net that is getting too expensive in terms of taxes and individual freedom.
Bingo, Rainman!
How about Texas where over 25% are driving with zero auto insurance. I visit my son there often and have been hit three times in that state in the past 10 years and none of them had insurance.
Glad you explained how they get by with that temporary insurance then dropping it method.
Good call on the auto insurance scheme. And if you ever get a big fine for not having insurance, just leave the USSA, move somewhere else, then rinse and repeat.
Speaking of 'move somewhere else,' notice how there's no exception for expats who don't have a U.S. health plan because they don't live here?
Expats already lose out from not being able to collect on benefits such as Medicare. Now they have to pay again for useless health coverage?
In one of life's little ironies, IIRC there were only two countries which taxed citizens on their total income, even if earned abroad.
The US was, of course, one.
The other was Gadaffi's Libya.
I believe expats are excluded. Not by name (expat), but by not physically living within the borders. For sure, no expat is gonna pay for not having health insurance!
corporate cash piles? how about a levy on unused cash? pay it to employees, or pay it out in dividends, or reinvest it in the business (r+d, capital, etc)....financial securities dont count.
How about those that want government pay for it and leave those that don't want government alone.
Of course, your type knows how to spend someone else's money better than they do. You and your ilk are gods.
http://en.wikipedia.org/wiki/Panarchism
Panarchism is a political philosophy emphasizing each individual's right to freely join and leave the jurisdiction of any governments they choose, without being forced to move from their current locale.
Isn't that what happened to Detroit?