One Percent Health Care Solution

One Percent Health Care Solution

Solving The Health Care Crisis Today

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The Problem

In 2007 Governor Schwarzenegger and his team offereda somewhat complicated solution for California’s problem of people lacking healthcare insurance. The plan involved a mixture of funding sources including most of the funding sources developed in many other previous plans. That proposal, while applauded, failed to be passed by the state legislators. Remarkably, it was rejected by (sufficient) prominent legislators from both the Republican (no surprise) and Democratic (big surprise) parties to kill it.  The most hopeful product of the prolonged debate was the state legal division ruling that “Provider Fees”, i.e. fees based on a percentage of moneys received for care to be paid by doctors and hospitals, were indeed Taxes! Of course they are. The legislature must achieve a two-thirds majority in order to pass any new tax. Republican legislators did not support the Governor’s plan, not because of the Provider Fees, but because they envisioned adverse effect on small businesses. The Governor’s plan would have required small employers without a health plan to contribute about 4% payroll moneys to a state fund to cover part of the cost of their employee’s medical care.  Small businesses are the primary source for the new jobs we need to grow our economy. Thus the Republicans legislators had a point. However, if they didn’t like 4% they  disliked a lot more the 7.4% tax proposed by the Democrats.  A business would have to fire at least 10% of its employees to cover a 7.4% annual tax burden created by its remaining employees. That’s the math. Decimation has never had popular appeal. Moreover, the newly jobless (former) employees still need healthcare coverage, plus a whole host of other unemployment benefits. And wow are their numbers growing now!

There was not much reason for us to love any of these plans because they would all have made our healthcare even more expensive. Why should we collectively add a new payroll tax when we are already paying almost twice as much for our own healthcare as we ought to pay? This statement is an absolute fact known to everyone remotely involved with American medicine.  Just because small business owners are “small” is not a justification to tax us further when the system does not really need more money.  Furthermore, the agreed upon 4% revenue tax on hospitals would bankrupt a lot of them.  The 2% tax on doctors would have mainly benefited Nevada, Idaho and Montana Medical Societies as physicians give up on California. I once suggested physician provider fees at a California Medical Association meeting. The measure received a single supportive vote (my own). We could not expect enthusiasm from any Provider Tax for any tax in 2008 and even less now. Nothing has changed since 2007.  All of the health plans now being considered in Congress will add billions of dollars more to a system that is already saturated with excess payouts.

Unless the new plan gives the real providers (doctors and hospitals) a net gain it will not do any good. The 1% plan does exactly that without adding more money. As you read on you will see how this works. Please read the entire plan and send the blog address to your friends and your elected officals! The address is