Wednesday, June 10, 2009

Outline of Health Care and Tax Reform

First off, we have socialized medicine already in the United States via Medicare and the Veterans Health Administration both are on the verge of bankruptcy. Medicare and Medicaid have overstayed their welcome and, as reported, will be bankrupt in 10 years. Socialized medicine around the world has resulted in long lines, rationed health care, and tax rates that approach 50% in most countries. Below is my outline for Health Care and tax system reform.

To reform our current Health Care system starts with driving efficiencies and putting the patient first.

  1. Phase out Medicare and Medicaid
    a. Those 55 and older will remain on Medicare and Medicaid.
    b. 55 and under will no longer be eligible
  2. Allow Flexible Spending Accounts(FSA) to carry over year after year
    a. Keep FSA guidelines in place but allow carry over from year to year
  3. Create Medical Saving Accounts(MSA)
    a. Establish MSA’s accounts
    b. Allow up to 10% of Gross Income to be saved tax-free
    c. Oversight of MSA will be done with the Federal Reserve Bank
    i. Offer savings rate of 3%
    d. Congress will not have access to money in MSA’s
  4. Medical records to become electronic
    a. Completed by 2015
  5. Increase competition
    a. Allow the purchase of insurance offered in other states
    b. Allow small businesses to pool resources when offering health coverage
    c. Eliminate in system/out system designation
    d. Prohibit pre-existing conditions disclaimer
  6. Publish cost of medical procedures
    a. Require all medical facilities to publish price of all medical procedures
    b. Regulate industry to prevent price fixing

I know this is a high level look at a potential plan to fixing health care. To assist people in affording personal health care insurance will be done through a reform in the tax program. I have touched on this topic in a previous blog entry, Flatten the tax and A New Tax Policy, where I discussed changing the tax code.

The tax code is arcane and credits allowed enable many, i.e. Warren Buffet 13% tax rate, to pay less tax than the tier. This being case, it is time for American Congress to revamp the tax code from the current system to a flat tax. My proposal would be establish a flat tax of 15% and eliminate all tax credits. The flat tax will not kick in until one earns $49,901. Going to a flat tax with no tax credits has many benefits:
  1. Levels playing field
  2. Rewards entrepreneurial spirit
  3. Eliminates the need for 90% of Americans to file taxes on April 15th
    a. Green policy with the elimination of forms required to file
    b. Only 1099 employees will need to file
  4. Reduces the size of Government
    a. Streamlines the IRS
    b. Reduces staff