A Tax, By Any Other Name, Is Still a Tax

 

We can send people to the moon, a robot to Mars, and can spy on the leaders of foreign countries, but we can’t develop health care plans to meet the needs of people as they go through life?

Really!?

A young, single person is offered the same coverage as a 55-year old, single person? Does this really make sense?

A 50-year old couple with two college kids must – must! – choose among plans that provide the same benefits as the plans offered to a 35-year old couple with two toddlers?

Please.

Stop dancing around the issue.

Just call it a tax and be done with it.

I’m not talking about the “mandate” or the “required” coverage the Affordable Care Act (ACA) has pinned on Americans. I’m talking about the almost complete lack of flexibility in what we are forced to purchase.

The position of those who developed the offerings inside ACA is that each plan had to be simple enough as to allow a comparison among providers.

But that doesn’t fly.

The questionnaire at www.healthcare.gov basically asks the age of those to be covered, smoking habits, and lineage (are you Native American?).

That’s it.

To say that we could not have included other questions regarding things like maternity, mental-health coverage, etc., is idiotic. The reason for narrowing the choices must lie somewhere else, and like most other things, this one comes down to money.

The heart of the ACA is straightforward. Health care is expensive. Some people can’t afford it or choose not to insure against health care costs. Others buy minimal insurance coverage. The consequence of no insurance or limited coverage can be devastating.

To address this, there must be a transfer of funds from those who can pay, or pay more, to those, in the eyes of the government, who cannot afford the coverage they require.

But wealth transfers are tricky things. The people from who wealth is taken rarely think it’s a great idea.

So, in typical political fashion, we’re told that something is great for us and will make life better. Then when the program finally comes to light in full detail, we find out that things aren’t so rosy. Then we’re told that “of course there will be a small minority who see an increase…” or “even those who buy more expensive plans are getting better coverage.”

Hmmm.

Fifteen million people. That’s the “small” group that will be required to change insurance plans.

Current estimates are that half of them – seven million people – will be required to pay more.

Is seven million people a small minority?

When you’re a government statistician who gets his insurance from Uncle Sam, or a university professor who has insurance through the school, maybe so.

When you’re one of the seven million being told to pay more for what you don’t need… well, then seven million doesn’t seem small at all. It seems outrageous.

If you’re going to pass a tax, be upfront about it, debate the topic, and hash out an agreement that a majority of legislators votes on. Don’t hide the fact down in the regulations.

Of course we know why this is done… it wouldn’t get passed otherwise.

So now we have two taxes, the one applied to people who don’t buy health insurance and the one applied to people required to buy more insurance than they need.

But don’t worry… It’s now simple to compare the inflated costs of what you don’t need on a website that barely works, and you can rest easy knowing that an un-voted benefit (the premium for the unnecessary insurance) that you have paid for is going to a cause that the government deemed appropriate.

Rodney

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About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.