Its been a quiet week for the average Joe. Most people have taken this week (or next) off for vacation. Not too many email responses lately. With Fourth of July tomorrow, most people would rather think of fireworks and BBQs than health care. For those history buffs, two of the key father figures in our country, John Adams and Thomas Jefferson both died on the Fourth of July on the 50th anniversary of the signing of the Declaration of Independence.
With the drafting of such a document, our fates were set in motion to be one of the most powerful countries on Earth. We also have tremendous liberties that many people in the world only dream of. I am thankful that I live in America and actually choose to remain. With all of our problems and shortcomings, we still have it really good. Now, for health care....
You have likely heard all the hoopla about health care on both sides of the argument. 40+ million of uninsured, soaring costs, soaring malpractice, yada yada. The big issues in Congress is the so-called public option, cost of the program and taxing people with health care benefits. These are not easy issues thus the reason why Clinton wasn't successful in the 90s going down this path. Some say we should move toward systems that Canada or Europe have. Those systems have their limitations and the quality of care has been questioned. If we can look at some numbers, of that 40+ million folks that don't have health care, there is approximately 10 million that are illegal aliens. Hmm, now we are in the 30 million range. Our current arrangements cover the poor (Medicaid) and the over 65 (Medicare). Of that 30 million, there are some folks who just won't pay for it. Now for affording it, that is debatable. I think a health care voucher or tax credit might be a better approach. What about the people who have it now? Well, I can say that even with health care, you don't go to the doctor or hospital for any wiff of disease or ailment. It does cost money and any argument that says people would use their health care willy nilly is hollow.
What is the big rush on this? The proponents say that it would help the economy in the long run. I don't believe it, yet. The key issue is who pays for it? All of us through the raising of taxes, the hopefully to be defeated cap and trade and taxing of health care benefits. The other underlying issue people tend to forget is that Obama's popularity is strong and with the majorities in the Congress, the time is now to get their programs through. If they don't do it this year, people might sour on the whole idea. I am soured on government thinking they can solve any problem. Having to deal with a sick mother, I can tell you first hand that government can't handle the programs in place now. Hmm, let's add another program that we can mismanage.
What does this have to do with finance? Its the cost. Health care costs will rise and so will your taxes. The other potential bad news is if there is an ability for citizens to pick a public health plan, how will your current insurer react? They will either jack up your deductibles or your premium to compete. If they can't compete, they will fail and in turn that reduces supply of payors. For the business owner, you will be put in a pickle with deciding on plans and the added costs of your premiums. What do I suggest? I suggest that there are better ways of fixing healthcare by focusing on tax credits, vouchers, malpractice law and looking at what states have healthcare now and improving it.
Have a Happy Fourth! Stay tuned as I'll focus back on the financial headlines of the day....
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