Republican Healthcare Reform
The problem with propaganda is that people are smart and instinctively recognize the truth when it comes strolling along. Everyone knows that employees lose their employer-based health insurance if they get cancer and become too sick to work. Obamacare was created to continue this flawed and dangerous system because a few special interests are making enormous amounts of money. Workers’ wages cannot increase because all increases are dedicated to their rising health insurance premiums. It’s time for new ideas. Albert Einstein said, “We cannot solve our problems with the same thinking that created them.”
Lee Iacocca sounded the alarm in the 1980’s when he said, “No company can have a $1,500 [per vehicle] health-care albatross around its neck.” Warren Buffett said, “The ballooning costs of healthcare act as a hungry tapeworm on the American economy.” All products and services produced in America are embedded with the high cost of employer-based insurance which not only makes them less competitive on global markets but also more expensive for our citizens to purchase domestically. It’s time for new ideas. The good news is that the current system of employer-based health insurance is so inefficient that workers will immediately receive enormous rewards as we transition into something much better.
The exclusion of employer-based health insurance from Federal Income Tax and Payroll Tax is unsustainable in the future as premiums rise faster than inflation. For example, in Pinellas County, Florida the health insurance cost for county employees is $30,000 annually per family. The Federal government loses $12,000 a year in taxes (25% Income + 15.3% Payroll). Health insurance premiums only go one direction, just like your age; UP! When this premium doubles to $60,000 the loss to the Federal treasury will climb to $24,000 annually per family. The time for change is now.
In 2000 Governor George W. Bush was running for President and supporting tax credits for the purchase of Individual Medical insurance and Medical Savings Accounts (MSA) for all Americans. Every vote was required to pass the Medicare Modernization Act of 2003. Each “Yes Vote” created a prescription drug benefit for seniors and also created MSAs for all. MSAs were renamed Health Savings Accounts (HSA). IRAs and 401Ks are old taxed accounts. HSAs enjoy tax-free deposits, growth and withdrawals. HSAs are unique as they enjoy total tax freedom.
On February 28th, 2017 President Trump’s remarks to a Joint Session of Congress included, “We should help Americans purchase their own coverage through the use of tax credits and expanded Health Savings Accounts — but it must be the plan they want, not the plan forced on them by our government….We should give our great state governors the resources and flexibility they need with Medicaid to make sure no one is left out.”
Unfortunately Obamacare Reform efforts were stalled in 2017. 2018 Obamacare premiums have sky rocketed upwards averaging 45% increases in the State of Florida. Some Florida families have health insurance premiums in excess of $40,000 a year. It is common for Florida teachers and other employees to pay $1,000 a month or $12,000 a year to add their families to their employers’ health insurance. Obamacare is plunging too many Floridians into a financial crisis so we must continue the Obamacare Reform agenda as rapidly as possible. President Trump should lead this effort and here are the adjustments to Obamacare Reform that are suggested.
Tax Credits and Enhanced Health Savings Accounts (HSA)
Tax credits may be used to purchase any Individual Medical (IM) product available in the States that the consumer chooses. Any unused tax credit is deposited into the consumer’s tax-free HSA. Tax credits are age-based as follows: 0 – 29-years-old $2,000; 30 – 39-years-old $3,000; 40 – 49-years-old $4,000; 50 – 59-years-old $5,000; 60-years-old $6,000. Tax credits are advance-able and refundable which means everybody qualifies.
Example: A 30-year-old couple with 2 children would receive $10,000 in tax credits to purchase insurance. With “Healthy Discounts” this family can purchase insurance for less than $6,000 a year in most of Florida. The unused credit is deposited into the family’s tax-free HSA.
Tax credits grow each year by the Consumer Price Index plus 1%.
High Risk Pools for Pre-existing Conditions
Federal funds are block granted to the States to establish High Risk Pools (HRP) for affordable insurance for those with pre-existing conditions. States may add funds to their HRP as they did prior to the ACA. People with pre-existing conditions have (4) funding sources for insurance; 1. Age-based tax credits; 2. Federal block grants to HRP; 3. States’ funding of HRP; 4. Consumers’ personal premium payments for the purchase of insurance.
Benefit -1, Millions of Working Florida Families will Immediately Save $12,000 Per Year
For many employer-based health insurance has become too expensive. For example, school teachers in Florida typically have to pay $1,000 a month or $12,000 per year to add their families to the schools’ health insurance. The age-based tax credits are generous enough that many families will have 100% of their health insurance paid plus receive $4,000 in their HSA if they choose a higher HSA deductible. This means a Florida teacher saves $12,000 a year in premiums they are currently spending plus the $4,000 HSA deposit for a total savings of $16,000 a year. Republican Reform targets wealth to America’s middle class families and working poor. Some families save even more. The current Obamacare price in Tallahassee for the lowest cost Silver Plan for a 60-year-old couple with Obamacare is $35,292 a year. This couple will get zero Obamacare income-based tax credit if they earn $65,000 a year. However, they would qualify for $12,000 in age-based tax credits that would pay 100% of an Individual Medical product that lasts for the year and is currently available in Florida. This couple would save $35,292 a year in premiums.
Benefit – 2, the Price of Products and Services will Drop
The current cost of products and services are higher because the high cost of employer-based health insurance is embedded into their final cost. Republican Healthcare Reform will strip these high embedded costs out of American products which will make our products and services more competitive in world markets. When products and services are lower for Americans their hard earned dollars will purchase more and last longer. When American products are more competitive we will increase the hiring of workers.
Benefit – 3, Local Taxes Will Drop
One of the biggest expenses for city, county and State governments is their cost for employee health insurance. When the Republican Healthcare Reform lifts the cost of employee insurance off the backs of local governments all local taxes will be able to be diminished.
Benefit – 4, Older Workers Become Employable Again
Employer-based health insurance discriminates against older workers because their health insurance costs are more. Companies prefer the lower health insurance costs of younger workers so it is more difficult for employees over 45-years-old to find employment if they lose their job. Employers won’t care about the age of an employee if the employee has his own health insurance with age-based tax credits. This change will help older workers find new employment.
Enhanced Health Savings Accounts (HSA)
All Republicans agree on making HSAs bigger, better and bolder by increasing the amount that may be deposited each year. The maximum deposit doubles so singles may deposit $6,900 and $13,300 for families. When employers pay employees in their paychecks they must pay payroll tax, workers’ compensation and unemployment taxes. Employees must pay payroll tax, Federal and State Income tax in most States. When employers make HSA deposits to employees all of these costs are eliminated (CA*). HSAs are compensation without taxation. It’s smart when employers and employees work together and cut the IRS out. HSAs earn interest or may be invested in mutual funds for the possibility of a higher return. HSAs turn high taxes and health insurance premiums into assets for employees.
Republican Healthcare Reform’s Medicaid Plan for States
In Florida we will educate the healthy Medicaid population about the benefits for them with age-based tax credits and HSA deposits. Education is the key. Florida saves money when the Medicaid person chooses the age-based tax credits and the Floridian has a much larger list of medical providers to choose from. The medical community will be pleased to receive higher reimbursement rates than Medicaid offers. One Florida Medicaid provider, Centene, has seen their stock price jump from $6 a share in 2008 to $106 in 2017. That is a whopping 1,700% increase in less than 10 years yet they continue to raise prices. We want to get Medicaid back to its original goal of helping the truly needy and older citizens that require the help.
Republican Healthcare Reform’s Plan for Florida’s High Risk Pools (HRP)
In addition to the Federal Block Grant to the State of Florida to maintain our High Risk Pool (HRP) for those with pre-existing conditions Florida will also fund the program with a HRP Tax on all health insurance premiums in the State. The goal would be a 2% tax on all health insurance premiums that is not permanent insurance like employer-based health insurance and Short-Term-Medical (STM). The people on these insurance programs are more likely to use the services of the HRP. The HRP Tax on personal, portable and permanent Individual Medical insurance would be reduced to 1% because these people are less likely to use the HRP.
Republican Healthcare Reform’s Plan for Young Florida Families
The big question is: Who would spend the money that is growing tax free? Some people that spend $100 at the dentist don’t spend the funds from their HSA VISA Card. Instead they pay with a different VISA and save the dental receipt because they have the freedom to let the HSA funds continue to grow and then they can take the $100 out at any time in the future. Some HSA clients have $150,000 in their HSA and have never taken any funds out and they may have $40,000 in Qualified Medical Expenses. Of course people have the freedom to use their own strategies.
A 25-year-old couple maximizing their HSA, $13,300 per year, will have $3,712,087.83 in 40 years with 8% growth. These people will be better prepared for 21st Century Medicare than today’s crop of Baby Boomers with zero HSA balances. Remember, 65-years-old is young in a 21st Century lifespan and at 75-years-old their HSA balance would be $8,241,634.53.
Prosperity for Florida
Lifting the cost of health insurance off the backs of American employers will make our economy soar like never before. America needs a salesman to sell the idea of Republican healthcare reform so our Nation can begin our healing process. President Trump is exactly what the doctor ordered. Floridians need more options, more choices and more freedom, including age-based tax credits. Republican Healthcare Reform’s solutions will empower Floridians to save premium, eliminate taxes and build wealth. Modernizing our inefficient healthcare system with Republican Reform will make America great again.