Let’s imagine you take a significant portion of the elderly and disqualify them from tax-funded healthcare based on a means test.
First of all you have to set the line for the means test somewhere and almost as a necessity it’s going to be at a point where paying for the most expensive care out of pocket is still going to be higher than the cutoff.
But that’s fine, they can buy their own private insurance. But then you have a choice - maintain the existing ACA regulations that health insurers can’t discriminate based on preexisting conditions and have limits on how much they can discriminate based on age, which means everyone on the private market has to pay more to account for the sickest population being in the insurance pool. Or you relax those regulations on the private market (let’s say you only relax the age-based rules) which means that elderly people on the private market are going to have premiums that average their healthcare costs, which for a population that a majority of will have very expensive care for something amounts to just paying directly for that expensive care.
Why deal with that when you can keep the existing system, and if you think it’s unfair that people can amass wealth and then spend their last years on government benefits, apply that means test using taxes?
My family is going through this right now. My dad’s health is failing fast. So… he does have some wealth. Likely enough to pay for 3 years of memory care. Some of his care is covered by Medicare, or his AARP supplemental insurance, but a lot of it isn’t and if he wants dignity and quality of life he’ll have to pay for it, which I support because, well, someday that’ll be me.
However… it has made me thing about my own affairs. My dad left everything too long and now he’s not mentally competent to pay his bills, and he’s almost unable to execute a real PofA. So maybe I should go through the exercise of “How would my bills get paid if I were suddenly incapacitated for a month or two?” Because nobody knows my obligations. I do have a PofA and medical directives in place at least… but they don’t know my bank accounts or passwords.
Others have made good arguments here. I share the OP’s outrage over the fact that “them’s that got, get.” But is the OP approaching the matter from the wrong end? Would taxing the income and wealth of the rich to deliver more equal incomes throughout everyone’s working and retired lives solve the problem in the OP?
To use a ridiculous example, I’m more upset with the billions Bezos has amassed than by whatever benefits he might get from Medicare. And part of what’s upsetting is the difference in health outcomes created by inequalities in wealth. Even in Canada, the single biggest determinant of health outcomes is income. (But to be fair, Canada’s healthcare looks good only compared to the US; it does not stack up well against many countries in similar economic condition.)
Finally, ending universal access is a good way to encourage the rich to mobilize to opt out of Medicare and scheme to end the program for everyone else.
The same is true in UK for many social security elements, Pension and UHC included. Neither of those are means-tested.
Rich people get the benefits of UHC for all of their life to the same extent that poor people do even though they can easily afford to fund it privately.
Rich people and poor people alike pay into the social pot by means of taxation. The rich putting in far more of course. They both get the same access (and no refund or tax relief for any rich person who chooses to go private)
I’m on the fence about means-testing in general. My gut feeling is that if you pay, you play but I’m open to listening to alternatives scenarios.
Well, you’ve convinced me. While I’m at it, I’ll just discard the retired military medical that I spent 23 years earning. That would be 23 years of shitty pay, a tour in combat, and being away from my family months at a time.
Although one nod to means testing could be a moderate access fee that you pay to see a doctor or access other medical services, rather like the flat prescription fee we already have in the UK.
High enough to generate some income from those able to pay and discourage unnecessary usage, low enough to not put people off seeking help and waived entirely for those in various restricted circumstances.
That is a system used in various other UHC countries and I’m not opposed to it.
Dinsdale, do you get upset if well-off people get free police services? Fire services? Why should they get those government services for free? Shouldn’t they be means-tested? What about their kids going to public school? If they are well-off, shouldn’t they be expected to pay tuition fees?
Universal health care isn’t insurance. It’s a government service, just like police, fire, education, and other government services.
It would be expensive to means test, and it would be an informative burden on those with dementia.
I think the intention was to start with health insurance for the elderly and gradually cover the rest of the population. Only the political millieu changed, and now we can’t do that. But we should.
Health insurance doesn’t really work as insurance. It doesn’t cover a rare large cost, that’s not closely correlated to other costs, that can be affordably spread out over a large pool. Rather, everyone has health costs, and once you have one “loss” the odds are you will have lots more. It’s much better as a government service. The “means test” is that richer people pay more taxes, not that they get fewer benefits.
I meant the outrage over the extremely wealthy also benefiting from “free” Medicare. The OP has a point about the apparent unfairness of it. Thus my example of Bezos collecting such benefits. My point was, this injustice is deeper and extends to the great disparities in incomes rather than Medicare. I’m on your side on this one; Bezos, not you, is “the them’s that got” in this instance.
We waste a lot of time, manpower and money on means testing for benefits. Better to means test more effectively through the income tax code (which we’re not currently doing now).
Good points on all counts. The people who bitch the loudest about “socialism” are more than happy to reap the benefits. I’m pretty sure that most of them couldn’t accurately define the word. For that matter, the term “communism” was never meant to equal “totalitarianism”. A lot of very respectable people in this country subscribed to the communism ideal in the 1920s-30s.
In addition to the excellent points about how expensive medical coverage would be for elderly people, this is really the key. As soon as it’s means tested, that means it’s mostly going to “those people” (whoever they are, poor, minorities, immigrants, etc.) and there will be even more pressure to kill it completely than there already is. Right now, we all qualify, so it’s OK, but if it looks like welfare, it will be dead.
I’m OK with this (even though what I pay is above the average), because the amount people need to take out of the system is also variable, dependent on what ailments befall them etc. To me, it’s inherently fair because people generally get care proportional to their need, and generally pay an amount they can afford.
Good points about the expense and extra bureaucratic burden of means testing itself, which people who advocate for it often forget.
My household is a fortunate one; we have a comfortable amount of money saved for retirement, we get a significant income from business dividends, and Mr. Legend was until recently still working full-time. Because of this, when he was diagnosed with Stage 4 prostate cancer and his oncologist recommended a drug that my employer-provided insurance balked at paying, I thought we could just self-pay. I’m here to tell you that unless you’re rich rich, you could go broke in very short order with one serious illness. Even after the approval went through, our copay for the drug would be over a thousand dollars a month if the manufacturer didn’t have a (non-means tested) patient support program in place.
The drug in question is one of the ten that Medicare has announced it’s going to be negotiating the price of. I’m waiting with bated breath to see how that will shake out.
Thinking about my 80 year old mom trying to fill out the forms to prove she’s eligible gives me headaches. And, she would get help from my siblings and me – lots of people wouldn’t have that help and would just fall through the cracks (meaning, go broke from uncovered expenses or die early).
So, worse, more costly coverage (due to the new bureucracy needed), larger threat to kill it off since it’s welfare, and people who should qualify not getting covered. What’s not to love?
This is how Canada manages its Old Age Security payments. Everybody gets them when they reach 65. For the wealthy, the payments begin to be recovered on a progressive basis through the income tax process. The 2023 threshold for this “recovery tax” is about C$83,000, and starts at 75% of 15% of the amount that your income exceeds the threshold up to a maximum of the total OAS payments you received, which would be reached at an income of about C$155,000 for 2023.
My wife and I manage quite comfortably in our retirement, and are still below the recovery income level, so this works well at providing income to seniors while still not being an unneeded benefit for the wealthy with a minimum of administrative burden and wrongful denials of benefit.
It just occured to me that we do, to some extent, means test Medicare. For those of us who have amassed great weatth, we’re paying quite a bit more for Medicare (in my wife’s case, over $550 per month)
What is IRMAA?
The Medicare income-related monthly adjustment amount, or IRMAA, is a surcharge on Medicare premiums for Medicare Part B (medical insurance) and Part D prescription drug plans. It applies only to Medicare beneficiaries who have a modified adjusted gross income above $97,000 for an individual return and $194,000 for a joint return. If your earnings are below this threshold, IRMAA doesn’t apply to you.
US Social Security becomes taxable at certain income levels, too, subjecting up to 85% of the benefit to income taxes. This doesn’t really affect the rich as much as it affects people who chose to save into the wrong types of accounts.
For example, it’s trivial to sell assets in a taxable brokerage account, and choose tax lot numbers the result in lowered capital gains, or in a down market, even a capital loss. And we have post-tax retirement accounts that can become quite valuable, and withdrawals are not taxable as income, despite 25 years of growth. If your taxable account is flush enough, you can even borrow against that instead of taxing capital gains, and let it settle after your death.
Of course, those are both after-tax savings, so one might argue that that’s fair. But even pre-tax savings don’t require taxable distributions until you’re 75 (for my cohort), so it’s relatively easy to live on social security alone while avoiding taxability.