Who is uninsured and who pays?


It’s not just Federal Taxes that will go up.   State and local taxes will too. 


We all know that there is going to be a cost for healthcare reform.   Collectively we all know that major reform is necessary and that most of the criticisms of the current system have some serious validity.   The majority of the issues will be addressed by mandating coverage for all, eliminating preexisting condition clauses, and allowing for guaranteed access to health insurance.   It isn’t the need for reform that is contended here.   It is how these changes are implemented that are, and should be, seriously debated.  


We believe that the implementation of current legislation is predatory, unfair, and a power grab to federalize the health care industry.   Please note, not the insurance industry, the ENTIRE HEALTH CARE INDUSTRY.


The argument that a federal bureaucrat is less desirable than an industry bureaucratic is a debate that can last for years, so let’s avoid it.   Let’s focus simply on what it means to each of us. 


Aside from the federal tax burden and structure, each State will be burdened with additional responsibilities that will require significant amount of additional revenue.   Medicaid roles will likely grow by 40-50% based on the mandatory enrollment of those currently not enrolled and the expansion of the rules of eligibility for Medicaid.  


Under the current structure, the State and Federal government share the cost of Medicaid by a formula where wealthier States pay 50%, poorer States pay as little as 23%.   The additional members into Medicaid would most likely increase the ballooning Medicaid costs by another $200 billion annually.   You can figure that half of that will fall to the State to be paid.   States with higher uninsured percentages might see their actual Medicaid costs rise by 100%.  


Let’s do some Math for my home State of Illinois using population averages.   The current Total Medicaid Cost per year, estimated $350-400 billion.   Illinois is about 3.25% of the national population.    That puts Illinois at total costs around $12-$14 billion.   With Illinois being in the middle of uninsured and income qualification, Illinois would add about 50% to their roles, adding perhaps $6-$7 billion in annual costs.   Of that $6-$7 billion, the State would need to fund another $3-$3.5 under the new federal plan, per year, increasing at 12% per year.     In States like California, the additional burden could exceed $25 billion per year using the same formulas.  


With sales tax revenues in each State falling (prediction) due to higher federal tax burdens, leaving less disposable income and purchasing power, this plan looks to be worse each day.  


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