I wanted to quickly discuss two recent posts about health care.
First, this tweet is totally correct:
This is true. So what about writing a bill that would bring that number down rather than drive it up? https://t.co/bwwxpPdrml
— Ezra Klein (@ezraklein) June 27, 2017
Whenever you see that Obamacare fails to cover a certain number of people, your next question should be: why does it not cover everyone? Obamacare covers people largely in a few ways:
- Medicaid expansion.
- Requiring those who lack employer-based coverage or Medicare to buy coverage on the individual market.
- A system of exchanges to organize the individual market.
These give rise to a few ways in which people could fail to be covered:
- Obamacare contained a provision under which states that refused to accept the Medicaid expansion would lose all their Medicaid grants; the Supreme Court ruled that this was unconstitutionally coercive, after which some states (mostly conservative ones, including some large conservative states like Texas and Florida) chose not to extend Medicaid coverage to their residents.
- Not everyone who was required to obtain health-insurance coverage did so; some chose to pay the mandate fine instead.
- Obamacare does not extend financial support to undocumented immigrants.
There are, then, a few obvious solutions to these problems:
- Conservative states could choose to take the Medicaid expansion.
- The requirement to obtain health insurance could be made easier through financial assistance (call this the ‘carrot’ approach); alternatively, the fines for not obtaining health insurance could be increased (the ‘stick’ approach).
- Essentially another form of the carrot approach from above: create a ‘public option’. That is, the government could set up its own health-insurance plan that would be a decent, cheap option for people who lack such options.
- Extend coverage to undocumented immigrants. (Sidebar: I’ve not looked for studies, but it wouldn’t surprise me if extending coverage in this way would be better for the country as a whole. If undocumented immigrants aren’t, say, getting their kids vaccinated, then that harms everyone else. By insuring more people, we may improve public health.)
No Republican plan, and certainly not the recent AHCA or BCRA, do any of these things. (See this Urban Institute report for a breakdown of the uninsured.)
Another thing I wanted to mention was this Vox piece comparing the tax cuts going to the 400 wealthiest Americans to the people who will be thrown off Medicaid. It’s true, and is a little more precise with the numbers than I’ll be. But I like being able to do quick sanity checks using cursory scans of publicly available numbers. So check this:
- The IRS has been tracking the tax returns of the 400 highest-income Americans for some time. Here’s the latest table. You’ll see that as of 2014, the total adjusted gross income for the 400 highest-income filers was about $127 billion. Very little of that was earned income; it was mostly dividends, capital gains, and so forth. Let’s say that about $120 billion from those top 400 earners was investment income.
- Two of the main ways the Affordable Care Act is funded are through a Medicare surtax of 0.9% for people earning $200,000 or above ($250k for couples), and through a 3.8% tax on investment income. Ignore the nonsense about, say, the tanning tax. That’s not where the real money comes from, and I’m inclined to believe that all the focus on it has been intended to distract from the taxes on wealthy people.
- Assuming $120 billion in investment income from the 400 highest-income filers, and about a 4.7% tax on all of that income, that’s $5.64 billion in tax revenue from the 400 highest-income filers.
- How many Medicaid recipients can $5.64 billion pay for? If I’m reading this table from the Kaiser Family Foundation correctly, Medicaid beneficiaries cost $5,736 each, on average. They’re cheaper in some states, more expensive in others. $5.64 billion divided by $5,736 per beneficiary is just south of a million beneficiaries — 980,000, to be inappropriately precise from numbers that were thrown together like this.
You could pay for nearly a million Medicaid beneficiaries just by applying this one small tax to four hundred taxpayers.