Taxes and healthcare

Jon Stewart’s interview with William Kristol put Mr.  Kristol in the awkward spot of arguing that only soldiers deserve the quality of care available to them through the Veterans Administration.  Everyone else should suffer in the private market.

Kristol couldn’t say so, but what he really  means is that he does not want a single-payer solution regardless of its efficacy.  In the same interview, he hints at this idea when he argues that Medicare costs too much and we cannot afford to go into more debt.  In other words, America cannot adopt a system like the VA because it costs too much.

That line of argument is, like much of what the opposition to reform argues, hogwash.  There is a common misperception about VA costs in America.   Though I could not easily find information from the VA itself, this Fortune article from 2006 states that VA per patient costs were about 17% lower than for the nation as a whole ($5000/patient versus $6000).  There is no reason to expect that these positions have reversed over the previous three years.  People hear “government” and conflate that with “inefficiency,” but the VA shows that these two are not necessarily synonymous.

Nonetheless, it is true to say that we cannot afford a VA-like solution given our fiscal structure, but it is not true that VA care is more expensive than standard insurance provided through the private sector.  Kristol was saying that we cannot afford VA-quality health care for our country without finding a way to expand our fiscal base, which we have seen is a huge political challenge.  [In my mind, the VA system - single payer, salaried doctors, robust IT, long-term care - is the best system we could emulate, but I realize that that will not come to pass.]  To expand our fiscal base, we need to raise our taxes.  For opponents, universal healthcare is unaffordable because they do not want to pay for it, not because it will bankrupt the country.  Yes, universal healthcare will, on the whole, cost more than our current system, but the relative cost (the cost per patient) would actually be lower if implemented correctly.

So we can afford healthcare reform, if we have the political willpower.  I do agree with critics who argue that expanding coverage without controlling costs is only marginally better than having 47 million uninsured people.  Reform is really about two issues: health care inflation and the lack of insurance.  Broken down that way, the Blue Dogs are right to be concerned about expanding coverage if that coverage will do nothing to control health care inflation costs.  In other words, raising taxes without attempting structural reform of health care in order to flatten costs is not a good policy.  If that is the main obstacle, the question then becomes: What taxes do we raise?  Raising income tax would be easy and suffice, but it probably is not the best way to increase revenue for this initiative.  We should probably tax employee health benefits, which would probably have the added benefit of demonstrating to employees just how expensive and broken our current healthcare is.  It would also make sense to increase taxes on “unhealthy” foods (perhaps anything with high fructose corn syrup).  Presumably, a tax on unhealthy food would also lead to less consumption of said food, which would improve the aggregate health of our population; after a few years, our better health would positively affect health care costs.

We need, and deserve, universal healthcare coverage, and we need the revenue to pay for it.  We need to raise our taxes.