How to Pay For Universal Health Care

Plans to ensure that universal health care is deficit-neutral involve a combination of new revenue sources, spending cuts, penalties and fees. Americans spend more than $2 trillion a year on health care, with almost half of that coming from Medicare and Medicaid. Healthcare spending is roughly ten percent of the total U.S. economy and rising, as healthcare costs increase faster than inflation and wages.

Instructions

Taxes

• 1

  Increase taxes on people in higher-income brackets. Progressive tax plans vary, but could start at a one percent increase for those making more than $280,000 per year.

• 2

  Add Medicare taxes to capital gains and rental income, which are currently subject to income taxes but not the Medicare tax. Another proposal institutes a standard increase in Medicare taxes paid by employers and employees.

• 3

  Create the so-called sugar tax: a three percent tax on items like soda, candy and cookies, which all contribute to health problems like chronic obesity.

• 4

  Subject employer-provided health benefit packages worth more than $8,000 for individuals or $25,000 for families to taxes.

• 5

  Levy market-share fees against insurance, pharmaceutical, and medical-device companies. For example, the pharmaceutical industry is expected to contribute a total of $2.3 billion a year to the government to pay for healthcare reform, with each company paying its share based on what percentage of the market it controls.

• 6

  Deny tax credits taken by individuals to pay for health insurance if that person makes more than three times the federal poverty level. The government would save money by forcing people currently receiving tax credits for health insurance to pay for it out of pocket or accept an employer-provided plan.

Savings and Penalties

• 7

  Adjust the formulas by which Medicare and Medicaid determine payments to providers, pharmaceutical companies and healthcare providers, saving $200 billion over ten years.

• 8

  Cut payments to private insurance companies that assist seniors with Medicare Advantage Fees paid to insurance companies have proven more costly for similar services than Medicare plans that do not cooperate with HMOs and other private options.

• 9

  Penalize people who fail to sign up for health insurance, or midsize companies that refuse to provide insurance to their employees. A fine of 2.5 percent of gross income could provide more than $100 billion in revenue.

• 10

  Have employers pay half the Medicaid costs of an employee who signs up for public assistance over private health insurance, or refund to the government the entire amount of any tax credit an employee receives to pay for private insurance. Sometimes called the "Walmart clause," this ensures that employers pay for some of an employee's healthcare coverage, as it would with a private plan, rather than directing him toward public programs like Medicaid.