Americans prefer health coverage to a tax cut; & a ratio that represents more equitable funding
Modern Physician
May 30, 2003
Most Americans would prefer more health coverage to a tax cut, poll shows
By Leigh Page
Almost two-thirds of Americans think the federal government should extend health coverage to the uninsured, while only one-quarter would want the recently passed tax cut, according to a new poll by researchers at Stony Brook University in New York.
Among those who want an extension of coverage, more of them prefer a major effort involving a tax increase to a more moderate effort that would not, says the study, released Tuesday.
Specifically, the study of 810 adults nationwide finds that 36% of all respondents support a tax increase to expand healthcare.
The poll also finds support for an expansion across the political spectrum. It says 72% of Democrats, 65% of independents and 53% of Republicans prefer action on health insurance to a tax cut. And even 27% of Republicans are willing to pay higher taxes for it.
The study also finds that 71% favor government requiring businesses to offer health insurance to all of their employees, a proposal that died in the healthcare debate in the Clinton administration. This “employer mandate” is favored by 69% of Republican, 77% of Democrat and 72% of independent respondents, it says.
http://www.modernphysician.com/news.cms?newsId=866
Comment: It appears that Americans have accepted the rhetoric that we don’t need a “tax cut for the rich” when we have unmet social needs such as inadequate health care coverage. When framed as a “tax increase,” support declines, although it does not vanish.
Rather than discussing the need for tax increases to fund health care, we should be discussing the impact of reform on total health care spending, public and private combined. Converting public and private spending into a ratio would emphasize that we don’t want to know only the public part of health care costs; we want to know the total health care costs and the respective components. Dismissing private spending from the debate while discussing the change in taxes makes no more sense than if we were to dismiss taxes from the debate and discuss exclusively the changes in private spending. If we want to know what health care is going to cost, we need to know both.
This concept has an important application to the finding that there is very strong support for an employer mandate. Even though many proposals include tax policy, the general misperception is that employer-sponsored insurance is funded predominantly by the employer and does not impact taxes. In fact, not only do tax benefits support employer-sponsored plans, but almost all economists agree that employees also fund health coverage through implicit salary concessions. The public needs to understand that they are not avoiding “tax increases” by receiving “free” health care coverage from their employers. Between taxes and salary concessions, they are paying the full tab collectively. Even worse, both the tax benefit and the salary “reductions” of employer-sponsored plans are regressive methods of funding health care. Lower-income individuals pay a disproportionately higher percentage of their income for health care than do higher-income individuals.
But a properly designed tax component (public) would tend to be more equitably funded since it would be progressive, whereas the salary component (private) would remain a regressive method of funding health care. In fact, all private health care spending is regressive since the percentage of income spent has an inverse relationship to total income. Thus a high ratio of public to private health care spending would represent a more equitable method of funding care, whereas a low ratio would represent a less equitable system.
We really do need to convert the debate into terms of total health care costs and a ratio that represents how equitable the funding really is. There will certainly still be some who believe that government and taxes must be minimized at all costs. Since it is now firmly established that the administrative excesses of our current fragmented system of private plans and public programs create more costs than a single payer system would, we can legitimately ask advocates of private funding (low ratio) whether they would prefer to pay less through an equitable system of funding health care, or pay more merely for the dubious benefit of saying that they are paying into a private system, even though to egregiously wasteful private health plan bureaucracies.
Let’s change the focus of the debate from merely concentrating on taxes to a more informative debate that identifies total costs with a ratio that represents how equitable funding would be. That debate would still include tax policy, but it would place it in a more meaningful perspective.