I Solve the Health-Care Crisis

Well, really, it seems so obvious to me.

If an honest, hardworking taxpayer isn’t lucky enough to have insurance through a job, then OF COURSE there needs be another reasonable option.  And it has to be something other than COBRA, which really is ridiculously expensive.  That only kicks-in when your job goes bye-bye - and who can afford it under those circumstances?  Only the rich jobless.

And paying for private health insurance is difficult.  It’s very expensive, and only available to perfect physical specimens.  If there’s the slightest chance you might need medical care, no insurance company will cover you.

I think there are two obvious sources of funds that could be used to cover the cost of universal health-care -the child tax credit, and the mortgage interest deduction.  Yes, I’m saying to look to our annual tax return for the solution.

Giving up these two “deductions” would free up a lot of money to help pay for universal health-care.  It would be a fair trade-off.  Though many of us would be giving up something, the value of what we get in return would be much greater.

For instance, I have a ginormous young mortgage, so my annual interest deduction is fairly large.  But a few days in the hospital for a bad case of swine-flu would no doubt cost MUCH more money than the value of my deduction. I admit that having this deduction is pleasant for me.  But it only lasts for a few years. Plus, I plan on paying off this mortgage as quickly as I can.   Not having that nice deduction anymore wouldn’t exactly send me into a  financial tailspin, and I suspect that’s true of most homeowners.

Eliminating the mortgage interest deduction might also have the effect of keeping another “mortgage crisis” from happening again.  For one thing, maybe the deduction has the effect of inflating house prices to some extent.  I think it does have the effect of making people think that they can buy more house than they can really afford.  I remember when I was buying my first house, a mortgage broker told us that the bigger the mortgage we took on the better, because we would get a bigger deduction.

Maybe some people who shouldn’t really be buying a house anyway would be deterred from taking on a  mortgage if there were no mortgage interest deduction.  Maybe interest rates would get really low, and not be so volatile, because there would be less people competing for home loans.  Maybe people wouldn’t run up so much credit card debt, because they wouldn’t be buying lots of stuff for the houses they can’t afford without a mortgage interest deduction.  There’s a domino effect.

With kids, the health insurance would be even more valuable to a parent than the tax credit.  Kids are always getting sick, and landing in the emergency room (though I don’t have any children I know that’s true, because I was a kid once).  One little ear infection equates to big bucks. And kids have two ears.  Ouch!

And as far as kids are concerned, it seems that most people who have them regard them as gifts from God.  Who ever heard of getting a gift, and then getting paid for it?    With that in mind, it should be easy for most parents to exchange the child tax credit for the prospect of guaranteed health insurance for themselves and their little Gifts.  Also, I’m pretty sure that most people don’t think to themselves, “Gee, I really want another tax deduction.  I’m going to have a kid.” Eliminating this one probably would make people mad, but people are still going to have kids even with no tax incentive for doing it. And kids get sick.  They need health insurance.

Then there’s the whole question of who should qualify.  Well, since my whole theory revolves around the tax return, I would say that anybody who files a generally honest tax return every year would qualify.  I think that would encourage more people to file, and also to not cheat too much on their taxes.  Since more people would be filing, this would also bring in more money that could be spent on universal health care.

Also, maybe to lessen the pain of giving up deductions, this could be an either/or proposition.  As in, if you have employer health insurance, you can keep your deductions because you won’t be costing the government anything.  But I don’t know if that would work.  Probably it’s really an all-or-nothing type of deal.

Every Frugal knows that if there is something out there you really, really want, than that usually means  you have to figure out where you are going to get the money to spend on it.  You can’t just get something for nothing.  Universal health care is going to cost a LOT of money.  Well, there you go–I just found it for you.