The Tax Attic with Jerry Coon – August 27 2009

Jerry Coon, Enrolled Agent

Jerry Coon, Enrolled Agent

Should government be involved in health care?

The bill before Congress is entitled “America’s Affordable Health Choices Act of 2009.” When all is said and done, the final version of the bill that President Obama signs will influence the health care of all of us, our children, and our children’s children. I believe it’s that big of a deal. It’s an emotional topic.

From what we see on the television, people are not afraid to voice their opinions about government’s further involvement in health care. I say “further” involvement because we do have the Medicare and Medicaid programs that are currently administered by the government. Is there waste in these programs? Yes. Is there a bureaucracy in these programs that makes it difficult to deal with at times? Yes. However, do the programs run as they are advertised? I would say yes.

When a taxpayer turns 65, he/she enrolls in Medicare and usually ceases to be covered by normal health insurance. This happens every day, all day long, and usually happens without a glitch.

Many taxpayers, however, do purchase a supplemental policy because of the shortcomings of Medicare. When an elderly person in a nursing home runs out of money and is no longer able to pay for care, Medicaid somewhat seamlessly picks up the paying of the nursing home. This also happens all day long, usually without a glitch.

So, let’s start with the assumption that our federal government is already involved in the health care business, but currently it is limited to the 65-and-over crowd. They now want to get involved in the under-65 crowd. Perhaps we should be reviewing the Medicare and Medicaid programs to see if the federal government is worthy of expanding their involvement. Are they controlling their costs or do they have the same problems the private sector has with wildly increasing costs? How is the health care for the participants compared to the private sector? Just because the federal government can get involved in the under-65 crowd’s insurance doesn’t mean they should.

Of course, the federal government’s motivation for this involvement comes from two items. First, there are approximately 47 million Americans who are not covered by health insurance of any type. More people every day are joining the ranks of the uninsured or underinsured due to a number of causes, including the loss of a job, employers dropping insurance, or insurance being too darned expensive to maintain. The blunt fact is that those with health insurance are currently paying for the health costs of these 47 million people.

Another blunt fact in the health industry is that every company in the process of health care makes a profit. The business of health care is most definitely not a nonprofit arrangement. With all due respect to the nonprofit status of insurance companies such as Blue Cross/Blue Shield, Priority and Grand Valley and hospitals such as Spectrum, Metropolitan and St. Mary’s, their revenue “surplus” is anything but zero.

The point I am making is that when someone with no insurance and no money goes into the hospital, that someone is still taken care of. The care and treatment is the same for all. The hospital just isn’t going to get paid by that person. Those costs are going to be borne by the paying customers. Those costs are passed on by the hospitals to the insurance companies who pass those costs on to the paying customers. As more people fall into the uninsured category, the paying customers’ costs will increase.

Second, the costs of health care are that are being passed on to the paying customers are increasing at what seems to be an exponential rate. However, even if everyone was paying their way, would the costs still be going up? Will the federal government, being a competitor, bring these costs under control? I don’t know, but I don’t think so. They just don’t have a great history of controlling costs. A little too much bureaucracy and a little too much inefficiency is involved in the government’s process.

In the end, I hope they don’t get involved, but I am just as sure they will get involved. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent. He owns
Action Tax Service on Northland Drive in Rockford.
His phone number is (616) 866-4704 or
e-mail address is jcoon@actiontaxservice.com.

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