Obama’s Universal Healthcare Proposal


In Sarah’s first online post since quitting her job as Governor of Alaska, she writes that Obama’s Healthcare Plan is “Evil” because of its support for euthanasia. Obama later explains, “Nobody is going to be forcing you to make a set of decisions on end-of-life care based on some bureaucratic law in Washington.” What’s interesting to note is how this story has garnered so much more attention rather than the costs and implementation of Obama’s healthcare plan. I have admittedly not paid attention to this debate, but feel I should. In this post, I attempt to provide a brief understanding of this controversial topic, along with various viewpoints.

THE SKINNY ON UNIVERSAL HEALTHCARE:

WHAT IS IT?
* Universal health care is also known as single-payer system, united health care system, or national health care. Universal health care is similar to the current US Medicaid program for low-income folks, and would apply to all citizens of the US regardless of the ability to pay.

WHY HAVE IT?
* Supposedly 50 million or so Americans, or almost 20% of the country’s population is without healthcare. People will argue that it should be the right of every American to have coverage, just like the Canadians and the British.

ADVANTAGES
* With a single Universal Healthcare system, Americans will save money because the new system will slash billions of dollars in administrative costs. Furthermore, 50 million people will have coverage.

DISADVANTAGES
* To provide 50 million more people with free healthcare, someone has got to pay for it. Some don’t believe big government will be able to run the new system as efficiently as the private sector.

With this quick understanding, here are various opinions from real people I’d like to share with you.

Young Doctor: “Sam, it’s been 10 years after I’ve graduated from college, and I’m still studying. You know that I originally wanted to be a Pediatrician, but after all the time, money, and studying I’ve spent, I now want to be a Radiologist (Radiologists can earn between $500-1million/yr compared to $150-250,000 for Pediatricians). Besides, look what big government has done to doctors over the years. They’ve made it easier for patients to sue us for malpractice, resulting in our insurance premiums going sky high. Meanwhile, our wages have been compressed due to the proliferation of HMOs. Don’t people know that we doctors just want to help people? Sometimes we make mistakes, but that doesn’t mean we should go bankrupt for it! If more people knew how much hard work and discipline it takes to become a doctor, I think they’d have more appreciation. I’m against the Universal Healthcare system. It’ll simply dilute the quality of healthcare, suppress doctor’s wages further, and deter us from specializing, when America is in dire need for more specialists!”

Elder: “I’m 63 years old Sam, and haven’t had a steady paying job in 5 years. My back hurts constantly, so it’s tough for me to even take side jobs moving and lifting things. Even my fingers aren’t as nimble as they used to be, making it difficult to work as an electrician. I served several years in the military in my 20’s, and the government promised me when I enlisted I would never have to worry, and that I would always be taken care of. I’m under insured now, and I don’t know if I’ll be able to make it until 65 when Medicare kicks in. One slip or fall, and I have no way of paying. I’m already $15,000 in debt from my credit card to pay for my home repairs. I think I have a cavity, but I just can’t afford to see a dentist, so I just bear it. I feel horrible asking my only son for money, but I do anyway, otherwise how am I going to survive? If the new administration can establish the Universal Healthcare system sooner, rather than later, it would help me a great deal. I wouldn’t have to stress about getting injured anymore, and I can just work to survive.

Tech Millionaire: “Sam, I’ve taken a ton of risks in my life, going bankrupt twice before, until I finally hit it big with a particular company that got bought out. I know what it takes to struggle and work hard, and I deserve the money that I’ve made. I am paying a lot for the healthcare insurance now, but that’s my choice. I have the best network of doctors in the world, and I’m willing to pay a premium. Is America not all about freedom of choice? If we implement Obama’s plan, I wonder if my doctor’s will be forced to take on a lot more patients? If that’s the case, I feel I will be crowded out. Will Obama’s administration also try and put caps on their incomes as well? If so, I’m afraid they won’t want to work as hard, exacerbating the situation for existing clients even further. The idea to tax me another 1.5-5% on the money I make is absolutely ridiculous. I already pay 36% federal + 9.6% state + another 5% for social security/Medicare for a total of around 46%. Don’t I pay enough taxes already? I’m against Socialism, which is where we are heading.”

Single Mother: “When I was in college, I gave birth to my beautiful son. The father and I tried to make it work for 3 years after graduation, but things didn’t work out as planned. He got arrested for theft and he cheated on me, so I left. I went back home to live with my mother for a couple years while waitressing at the local diner. It was really scary because we had no healthcare. I’ve been on my own two feet for the past 5 years working as a paralegal. We live in a quaint little one bedroom apartment, and I’m proud to have made it through. I don’t make much money, and for the first two years on our own, it was quite difficult because daycare alone took up about 40% of my annual salary! My son is now in public school, but I still need help in the afternoon before I get home at 5:30pm. Times are tough, and I’m thankful to have a job. I’m in full support of Obama’s healthcare plan because if something happened to my son when we didn’t have healthcare, we wouldn’t have the means of our own to pay. In the world’s wealthiest country, all Americans have a right to healthcare coverage, regardless of their financial situation. I pay my fair share of taxes, and would be willing to pay a little more if it can help others.”

You may have had a singular viewpoint at the start of this article, and I hope it has changed. Nothing is ever what it seems. If you are a well-to-do person in the highest marginal tax bracket, I guarantee you will feel differently if you befriend those who are paying the lowest marginal tax rate and have an underemployed love one. Conversely, if you are someone who thinks it’s always OK to tax the wealthy more to pay for the rest because they are “rich” anyway, try and understand where they’re coming from, and the absolute dollar amount they are already paying in taxes.

Readers, please freely share your views on this controversial topic. The more angles the better. Some of our parents and elder relatives may be underinsured. If taxes are going up (1.5%-5% for incomes $250,000-$1million+), hopefully they will be the immediate beneficiaries, along with the 50 million other uninsured when this bill gets passed. Passage seems inevitable under this administration…. or is it? I wonder if the early retirees will also be fully covered? If so, bring it on, preferably if all the billionaires can pay for it!

Something to think about. Medicare costs the government almost $400 billion a year and supports somewhere around 38-40 million people. Medicaid is nearing $300 billion and covers 53 million people How will Obama’s Universal Healthcare cost only $60billion/yr for the 50 million uninsured?

Recommendation: I encourage everyone to shop around for health insurance to save money. The internet has really helped lower the cost of insuring yourself and your family. eHealthInsurance has some of the lowest rates and best coverage. They are based right here in the Bay Area, and I have met a number of their representatives. Click to save money and ensure your financial health: Free Health Insurance Price Comparisons for Individuals and Families.

Keigju,

Sam – Financial Samurai – “Slicing Through Money’s Mysteries”

 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Anonymous says

    Great topic. Frankly this whole topic scares me although I understand how it would help a lot of people. There are so many questions without clear answers. I'm still not clear what would happen to me if this passed. Would my existing PPO disappear? Would I be cornered into going to a public clinic with inexperienced doctors?

    There are free clinics already and sadly I don't think the quality is that good. It's really insightful to see so many different view points though. I just don't trust that the government is capable of taking on something this big so fast. Everyone that has medicare/medicaid now says the system is terrible so it makes me think the govt should try and get that fixed first before throwing the entire country into chaos.

  2. RB @ RichBy30RetireBy40 says

    Anon 11:29pm – Good questions, and I don't know the answer. I can't imagine they will do away with all PPO providers. There will probably still be a dual system of private and universal for those who want to pay more for and those who can't. I just wonder how much in cost savings there will be then?

    I'm scared of big government bureaucracy and pray they do the right thing, and quickly.

    Rgds,

    RB
    RB30RB40

  3. Anonymous says

    I have a feeling that most people are apathetic. If it doesn't affect them they don't care what happens. The government will do what they want to do. This is probably a 30's age and up issue.. maybe 40's. Young folks don't care so much.

  4. RB @ RichBy30RetireBy40 says

    You may be right Anon 6:56pm. I don't feel I can post another entry until I get some more feedback. There are definitely enough people visiting the site now, and I'm surprised there isn't more debate. Maybe nobody makes over $250,000 visiting, so they're cool with the 1.5-5% tax hike.

    Cheers

    RB
    Rich By 30 Retire By 40

  5. Obama Mama says

    This is such a great balanced post. Thanks guys. I was on the the side of anti healthcare reform, but I see the other side more clearly now.

  6. says

    Your “young doctor” is slightly off. The health care industry will see a shortage of primary care physicians (or specialists) over the next few decades, precisely because specializing = more money. Potentially, universal health care would narrow the gap and encourage more young doctors to stay in primary care, where prevention is generally the intended focus (thereby, ideally, helping to bring costs down more).

    I work in public health (though on the global scale) and I confess to being in support of a single-payer universal system. The US spends far too much on health care as it is (both individually and publicly) , and it’s not really all that great or accessible, even if you do have insurance. I would also like to see a greater focus on prevention, which isn’t really profitable in our current for-profit system.

    Can the government run health care decently? It’s been done in other countries, so it’s possible. Not sure if it is likely in the US, given special interests and other ways of running up spending and costs unnecessarily. But insurance companies and pharmaceuticals running the system isn’t doing much good either.

    If I made over 250K, I wouldn’t have a problem paying more in taxes, but then, I am not the type to overleverage and could probably spare a good chunk of my salary. But the question is what kind of product will we get for that money?

    Thanks for a good post.

    • says

      Deepali – Thanks for sharing your thoughts! The inefficiency in the US healthcare system leads to higher costs. It’s obvious if one compares the procedure prices done in the US vs. the UK or Canada for example. We’ll see what happens.

      Hopefully the system will be fixed for when I get old and needy!

      You say you don’t have a problem paying more in taxes if you make over 250K now, but once you do, I bet you will feel a little differently. It’s just human nature.

      Financial Samurai

  7. Shakela says

    My biggest concern is that whenever the government gets involved in healthcare, employee’s jobs get harder. You wouldn’t believe the requirements to get reimbursed for mental health care. I’m not looking forward to a harder job and less take home pay either directly because of budget cuts, or indirectly because of increased taxes.

    However, the insurance companies get away with murder. Premiums are rising exponentially, and coverage continues to get reduced. I found myself paying out less with an HSA then I was with a traditional plan, without even taking into account the premium difference. That scares me. So if the government can figure out a way to do this without making everybody’s lives harder and raising taxes I’m all for it, but I want to see a very solid action plan before I’m getting on board.

    • says

      Hi Shakela – Well said and I agree! If we’re paying more, we better get a commensurate return. Insurance companies exist to make money off of us, otherwise they would surely fail. Thanks for stopping by!

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