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Reforming Health Care and How it Affects Your Finances

By Erik Folgate

I came across an article by Pat Regnier at CNN Money whom proposes three different choices for reforming health care in America. Health care is definitely the number two most important issue in America behind the war in Iraq. Once you stop talking about Iraq, the issue of health care comes up. What do we do? Do we allow the government to take full control of it and get taxed out the rear, or do we completely put it in the hands of employers and citizens to buy health care on their own? If you put it in our hands, then we continue to have the problem where people don’t buy it, and then they go to the emergency room to seek free help. Hospitals will do pro bono work and pass the costs off on the people who do pay for insurance. This is the dilemma.

Here are his three ideas for reforming health care:

BIG IDEA NO. 1 Insurance isn’t a right. It’s a responsibility.
BIG IDEA NO. 2 The road to reform runs through Form 1040
BIG IDEA NO. 3 Create the not-exactly-national health plan

The first big idea is to mandate individuals to pay for health insurance coverage. Basically, it’s against the law to walk around without health insurance. This would be similar to having basic auto insurance coverage which almost all states require operate a vehicle. The problem that I have with this is that I don’t really think the government should have enough power to tell me what to do and what to buy. I understand the auto insurance coverage thing, because it protects you if someone causes an accident that injures others. But health insurance affects you and your family.

The second big idea involves being taxed more for health insurance. This leans more towards the universal health care idea. I am strongly opposed to letting the government completely control health care. They will screw it up. I promise you. Look at all of the programs that the government controls and tell me which one runs smoothly. The veteran’s affairs hospitals, Medicaid, Medicare, FEMA, and the list goes on. Also, look at Canada and England. Their health care system is horrible and they both run on universal health care systems. They also pay like 16% sales tax and horrible income taxes.

The third big idea is a hybrid health care plan that incorporates a universal plan that doesn’t feel like a universal plan. One idea is to have employers offer the standard private insurer plans and then the ones that don’t over health insurance plans would still pay a tax that funds a public health care system. I like the idea of penalizing or putting more pressure on employers to offer health care to their employers, but I also don’t like the idea of small businesses getting taxed heavier. Small businesses are vital smaller communities and they will be the ones to fund the lion share of a plan like this because larger companies can afford to offer health care plans to their employees.

Basically, I think you have to look at solving the health care crisis by looking at it in terms of who is receiving the health care. You can break it down to four categories of people: The elderly, children, poor and mentally ill, and middle/upper class.

The Elderly

The elderly need assistance with health care until we can put in place a plan that allows younger people to help fund their insurance coverage for their later years. I think we should continue to help fund the elderly until we put a good plan in place.

The Children

Children from poor families need to continue to have health care. We need to protect our children and continue to pay taxes to help fund health care plans to make sure that children from less fortunate backgrounds receive adequate health care.

The Middle/Upper Class

I think that the HSA makes the most sense for the middle class and upper class in the long-term. The problem is that most people don’t think in terms of 5 to 10 years from now. They think of 1 to 3 years from now. If you look into an HSA, you will see that there is a huge deductible that needs to be satisfied, but if you or your family is generally healthy, you can save up enough money in your HSA to cover the deductible, and then the plan pays for 100% of health expenses. Also, the HSA has tax deductions and you can roll the money saved in it to the next year.

The Poor

This is the biggest problem with the health care system. The people that makes around the poverty level won’t or can’t pay for health care. They just can’t afford it. When it’s either food/shelter or health insurance, food and shelter come first. I really feel for the people that have to make that decision. It shouldn’t be a decision they have to make. The problem may not lie in the high cost of health care, though. Generally, people are living in the poverty level because they are either too lazy to work hard enough, not educated enough to make more money, or they are disabled. If you are disabled, the government needs to help you out. If you are lazy, someone needs to kick you in the butt and motivate you to start making more money. If you don’t have the education, then you can seek alternative routes to becoming more educated and pursue an occupation with career advancement. Community colleges are an often untapped resource to obtain a degree at a low cost with a high value.

If we start breaking the health care crisis down into categories of people and how we can help those categories of people, it may seem like a much less daunting task than when we look at it from an overall perspective. We’ll probably never agree to have universal health care for everyone, but we’ll probably never agree put it in the hands of all people. So, we need to agree on universal health care for some, and personally expensed health care for others.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • Jeff C

    The reason health care is so expensive is that there are no incentives to keep prices down. Consumers (with insurance) don’t care how much the service actually costs, because they’re not paying for it directly . Because of this, providers have no incentives to keep prices down, so naturally, they go up.

    Insurance cannot be the solution for our dilemna — in fact, it is the primary REASON costs are so high. Any health care plan for the long haul must work in the direction of eliminating insurance, not propagating it.

  • http://www.davidbarber.org/blogger.html David

    Shocking, and more than mildly offensive. “If you’re poor and uneducated, go get not uneducated and not poor”. Thank goodness the solution is so easy. I thought perhaps the problem was bigger, but no – clear and simple. Opinions like this aren’t just ill-informed, they actively contribute to the problem.

    • Cntryoutdoors

      Right, and how many college graduates are not finding positions in their field. Higher paying positions are not exactly jumping out of the woodwork. That is why graduates are moving back with mom and dad, not because they are lazy!

  • erik.folgate

    David, I’m pretty sure that I never said that going out and “getting not poor and not educated” was the solution to the problem. Health care reform is a complex issues, as Jeff mentioned above. There are many factors and private insurance companies don’t help the cause either.

    I’m not ignorant enough to assume that everyone can wave a magic wand and stop being poor and uneducated. However, I believe that you show some ignorance by assuming that the poor can’t change their lives around. Do you think that people who are born into a poor or uneducated family can’t make a life for themselves? We live in THE UNITED STATES. Immigrants flood to this nation because of the amazing opportunities that await. Hard work and determination can bring people out of poverty. However, many do not want to accept that. They want to keep feeling sorry for themselves, and it is people like you that help them keep feeling sorry for themselves. YOU want the government to take care of them for the rest of their lives. But, the crutch of the government will not help them. Helping them get an education and develop a sold career path is what they need.

    Also, I’m not ignorant to the fact that some people have disabilities that do not allow them to get an education or perform certain work activities. I’m fine with letting my taxes help those people. But I am not fine with letting my tax dollars go towards people that take for granted the opportunities that the US offer every day.

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