If politicians would do what is best for the country and the people then the solution is quite simple and will save the country billions. How I would do it you say?

Repeal Obamacare tomorrow and flip everyone to Medicare and have them pay what they are currently paying today for their crappy plan for access to Medicare. We can keep all the good things from Obamacare such has no preexisting conditions,  kids can stay on their parents plan, etc. without breaking the bank and giving subsidies to middle men that are only looking to make a profit.

Instead of using an insurance program that is efficient and that works, we decided to give subsidies to private insurance companies. That was the problem from the beginning. It did not nothing to curb costs and only lined the pockets of big insurance companies and the for profit health care system.

By flipping the 16+ million Americans to Medicare it will cost very little to do so and those 16+ Americans can pay what they are currently paying to the private insurance companies + US government subsidies directly to Medicare. Just by doing that we should be able to maintain the coverage of  millions of Americans without costing the US tax payer a cent. If this doesn’t pay completely for the program (wish I doubt) here are some other ideas for how to pay for the program:

  1. After a year, premiums and deductibles for people below the age of 65 could be calculated to pay for the system but also raise funds to keep it solvent in the future. So the income from premiums would fund most of the program + some. T
  2. Give access to private insurance to compete across state lines and let Medicare compete against them to reduce costs and increase their efficiency.
  3. Increase Medicare taxable wage to $500k instead of $118k.  By raising it so high we will be able to reduce the FICA tax of 12.4% to potentially to 11%-10%.  This would raise incomes for workers at the bottom with more take home pay and save companies billions. What CEO would say no to reducing their 6.2% FICA matching tax to say 5.5%. We could cap the FICA corporate mathing tax to the first $250k.
  4. Making it illegal to not accept Medicare. Some private for profit companies have been pushing out Medicare patients because they rather make a bigger profit. Saying no Medicare is like saying no the US dollar or the Government of the United States.
  5. Lifting the idiotic baring Medicare to negotiate drug prices and services. According to the WSJ, lifting this rule  “the federal government could save between $15.2 billion and $16 billion annually if it negotiated with drug makers for Medicare Part D medicines and obtained the same prices that are paid by Medicaid or the Veterans Benefits Administration”.
  6. Reforming the mortgage interest deduction to limit it to one home and only homes and capping the deduction to $50,000 in interest per year. The deduction was created to boast home ownership and help lower income household but actually gives a huge tax break to households making $200,000 or more (over 70% of those households use the deduction). This is a great deduction for middle America but it should not be abused to let the richest’s in America deduct up to $1,000,000 in interest on their first and second home.  By capping it, the system would be able to increase revenues by tens of billions a year. If you bought a home for $1 million at say 4% and financed it at 100% your annual payments (interest + principal) would be a little over $57,289 so plenty of upper middle class households could use it if capped at $50,000. By the way you can use the deduction on your yacht or if take out a HELOC on pretty much anything you want. How many middle class Americans have yachts or own a second home?
  7. Raising the capital gains tax from 15% to 20% for cumulative gains over $250,000. So if you report making over $255,000 in capital gains may it be from selling 1 stock or 500 stocks you will pay 15% on the first $250,000 and pay 20% on 5,000. You could even scale it . Say 16% from $250k-$500k, 17% for $500-1 million, 19% from $1-$5 million and then 20% for anything over $5 million. Either way, the government will be able to raise plenty of money without hurting the middle class, family farms, and small business owners.

All these tax proposals and ideas are simple, don’t hurt the middle class and still generate plenty of revenues to Medicare is more efficient and gives better quality healthcare than the private insurance companies.  A Gallup poll showed that American with government insurance and healthcare are more happy than those with private insurance.

By eliminating subsidies to the private sector (Obamacare + Medicare part D) you are giving Medicare a chance to not only stay solvent but actually reduce costs across the whole healthcare market and insure almost every American for a lower cost than in today’s system. So dear President elect Trump, before you do anything think about it.

 

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