Healthcare reform: Some unclear on the concept

The backlash against President Bush's healthcare reform proposal, as expressed in his State of the Union speech last month, has been swift and widespread. From the progressive left comes the very real challenge that the plan calls for no real restraints on insurance premiums, but merely hopes to offset those steadily rising numbers by offering everyone a tax credit, so that those skyrocketing rates continue, being paid for with pre-tax dollars. From the conservative side, there is concern that the Bush plan may penalize those who already have good insurance coverage through their employers.

But perhaps the most ludicrous criticism stems from the claims by the American Association for Retired People and other advocacy groups, that the Bush plan might endanger Social Security funding. According to a McClatchy Newspapers column by Dave Helling, entitled Benefit Dilemma, the question being raised is, "Would you trade health insurance today for tomorrow's check?" He quotes AARP legislative policy director David Certner as saying, "We don't think there should be a trade-off between a health benefit today and a pension benefit tomorrow."

The concern they are raising is that since the tax deduction ($7,500 for individuals, or $15,000 for a family) applies not only to the withholding taken out in weekly paychecks, but to the FICA payroll tax as well. The reason for this, as the article notes, is that if FICA were excluded from the deduction, about a third of all taxpayers would get no benefit at all from the tax-break.

This has AARP and other "elderly advocacy" groups up in arms, since it appears to put working folks in an iimediate bind: choosing between good health today and comfortable retirement later on. The argument goes as follows: If you pay less in payroll taxes along the way, your eventual benefits from Social Security will be smaller. Even supporters of the Bush plan, from such pro-liberty thinktanks as the Cato Institute and the National Center for Policy Analysis, admit that this is "possible" as a result of the proposed system. http://www.cato.org/pub_display.php?pub_id=7171 Michael Cannon, Cato's director of health policy studies, reportedly admits the problem could exist, although he notes that ""Social Security benefits don't help you if you're dead."

And this is where the argument fails, actually. Although AARP is vested in the continuation of Social Security as we know it, the reality is, those current benefits are funded by the ongoing "contributions" of today's working folks,. There is no "lockbox" . and there's no guarantee that twenty years down the road the money will be there for those wishing to "retire" under today's requirements. The "trust fund" is a figment of politicians' imaginations, not a true sequestered funding-source, either now or in the future.

However, there is a much larger question involved here, one the AARP seems to overlook. "Retirement" today has very little to do with ending productive behavior in the world. For most of the Baby Boomer generation, all this means is a shifting from conventional employment to something the heart always wanted to do; more often than not, this means embarking on a whole new career-path, not sitting back in the rocking chairs and waiting for death, as has been presented as the model for retiring in the past.

And the most important factor, or at least one of them, for someone making a decision to continue as a producer in society, is continued health and wellness. Without a sound body and mind, one is hard-pressed to become that writer, artist or whatever that has been crying to be unleashed from within; if illness or frailty is holding you back, the chances are that creative spark will have a hard time reaching the surface. Even for those who do not feel that special creative bent, retirement life in the future is well enhanced by good health, and if not dealing with a roster of physical ailments allows one a much greater chance to keep doing something of value to the world. (In other words, the only people truly affected by this choice are those whose retirement plans consist of "doin' nuthin' the rest of my life"; as studies show, those people won't live very long, without something they truly care about doing to keep the life-spark alive.)

The AARP is of course irate about this, since their existence depends on keeping the "elderly" convinced that they need someone to look out for their interests. Like any other political pressure group, this requires a docile herd of sheep, rather than a hale and hearty assortment of strong and vital individuals, who just happen to be advanced chronologically. As an alternative to the Bush prescription, they are pushing for replacing the proposed tax deduction with a direct tax-credit for healthcare, one which would not touch FICA payments, thereby leaving the retirement issue out of the picture. His expectation is that younger workers at lower pay-rates might apply the credits to paying taxes and then use the extra money for healthcare.

However, this model still promotes the idea that working hard now is the road to leisure and stagnation later on. If the intention is to produce healthier and happier people today, there seems little point in promoting that sedentary life of payback in our later years. For those who truly intend to remain at least somewhat productive, despite advancing years, this diversion of funding to deal with today's issues seems only a logical outcome of that shifting paradigm.

Bottom-line, solving the healthcare mess now, and then focusing our energies on having longer, healthier lives down the road, seems a far better course to take, than continuing to walk the same weathered pathways that have given us the current crisis in healthcare. Although the Bush plan is far from perfect, it does at least in this aspect have the right goals in mind: helping people pay for their own health and wellness, by reducing their tax-burdens otherwise.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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