Rx For Health Care: Pain
The politics of health care rests on a mass illusion: Most Americans think that someone else pays for their care. Workers with employer-provided insurance believe that their companies pay. Retirees and the poor think that the government, through Medicare (retirees) and Medicaid (the poor), pays. No one has an interest in controlling spending, because everyone believes that it
burdens someone else. Naturally, the health-industrial complex — doctors, hospitals, drug companies — has no interest. Higher health spending raises their incomes and profits.
First, make Medicare beneficiaries pay more. Second, create a dedicated federal health tax to cover all government health spending (Medicare, Medicaid, etc.). If health spending rose, the tax would rise. Third, eliminate the income-tax exclusion for employer-paid insurance and replace it with a tax credit of lesser value. Workers would have more pretax income, but they’d have to spend more after-tax dollars for insurance.