Dispelling The Health Care Rumors

April 8, 2010

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Dispelling the Health Care Rumors

I’ve seen a lot of arguments on both sides of the health care debate in the past few months. A lot of smart things have been said, and a lot of flat-out untruths have been spread. I’m here to take on the ones that bother me the most.

1) The government is just intruding on your freedom

The Truth: The mayor of East Podunk, Kentucky could sneeze and someone out there would see it as a governmental invasion of your freedom. The fact is, the government isn’t forcing you to buy health care any more than they’re forcing you to buy auto insurance if you own and drive a car, but you will pay a tax if you don’t have health care come 2014. Right now the majority of Americans have health care through their job, so if you’re reading this odds are you fall in that category. If you’re not one of those people, don’t have health insurance, and don’t want health insurance then you’re a liability on us all: if you get sick or injured to the point where you have to go to the ER, you’re a burden on everyone’s taxes, including your own.

2) This is just one more step toward socialism!

The Truth: The average person who says that has no clue what socialism really is. The US has, and has had for many years, socialist systems in place: Unemployment, social security, police forces, fire departments, and even the military. The military is like a little socialist bubble society within American society. Beyond that we already have socialist systems in place, you’re going to pay a tax if you’re not already receiving health care from your capitalistic job so that if you should be injured or get sick to the point of needing emergency medical services you won’t be an undue burden on the government. Gee, that tax kind of sounds like … insurance, doesn’t it?

3) This is government takeover of health care.

The Truth: No. Private insurance companies, pharmaceutical companies, and hospitals will still exist as private, for-profit businesses. The government is already in the health care business from Medicare and Medicaid, programs which millions of people are very happy with. Here’s two typical right-wing talking points that don’t logically work when combined: the government can’t run anything right, and health care companies are afraid the government will run them out of business. If these companies are so successful why should they be afraid of an inept and bumbling government?

4) The US already has the best health care system in the world, we don’t need any new laws or to change anything.

The Truth: The US, according to the WHO in 2000, ranked 37th in the world as far as health care goes; slightly above Slovenia and Cuba (you know, Cuba, that socialist, communist, pinko country to the south of Florida). This ranking was based on number of preventable deaths, healthy life expectancy, health performance rank, and total expenditure of percentage of GDP for health care. I know, if Canada has such good health care, why do their leaders come here to see our doctors? They don’t. The only positive proof of this I was able to find was a Canadian Parliament minister coming to the US to see a specialist for a very specific issue. I can even counter that with a personal anecdote: I had a friend go to Germany for experimental cancer treatment when his US insurance was unwilling to pay for expensive treatment that might have saved his life. Sadly, he died a few years ago because of that cancer. Yay capitalism.

5) “Death Panels” will decide when your grandma dies.

The Truth: That is so outrageously false I’m shocked that anyone actually believes it, but then I’m shocked people believe half the things that come out of Glenn Beck’s mouth. The best I could come up with is the term “Death Panel” was made up by Sarah Palin in an attempt to sensationalize end-of-life counseling and use it as a scare tactic. When people get old, they sometimes need more help from medical professionals than when they were younger. This can get expensive. To help best plan for this time often their children consult with a doctor on what to do. This is called end-of-life counseling. Here, I’ll re-label it. Let’s call it … Elderly Living Assistance Planning.

6) Non-jailed sex offenders will be able to get viagra on this plan!

The Truth: What? Are you serious? Senator Coburn of Oklahoma brought this up in yet another attempt to scare people away from the idea of health care reform. A convicted sex offender not in jail could get viagra on this new health care reform law in the same way a convicted murderer not in jail could get a gun – through someone willing to give it to them. The outrage at this issue is misplaced, as that scenario is no less or more likely 2 years ago than it is 2 years from now.

7) Costs will go up with the new health care law.

The Truth: What’s to prevent costs from going up now, say … the way they have the past 10 years? Since 2000 there has been a 100% increase in the cost of health care to the average individual while the average wage increase is a fraction of that. Yet, health insurance companies have been reporting record profits and your average health insurance company officer makes tens of millions of dollars a year. At least with an open market system we’d have a chance at real capitalistic price wars. Right now the CEO’s paycheck is padded each time a pencil-pusher gets a pat on the pack for denying you coverage on something. I’d rather have a complete government takeover – I trust the “inept, bumbling” government with my health more than I trust someone to pick my health over greed.

21 Comments (+add yours?)

  1. kosmo
    Apr 08, 2010 @ 09:21:05

    I, too, found the characterization of end of life couseling as “death panels” to be absurd. This isn’t a Logan’s Run sort of deal where the elderly are being actively killed. It’s an OPTIONAL benefit. Need it – it’s there for you. Don’t need it? Don’t use it.

    Can you imagine what would have occurred if this benefit had NOT been included? People would have complained that their 95 year old grandpa needed to see a psychologist/psychiatrist to talk through these issues and was stunned to received a $400 bill, since it wasn’t covered by insurance.

    There are many aspects of health care reform that can be debated intelligently from either side. The issue of death panels cannot – it was simply an incorrect interpretation of the provision.


  2. Laura
    Apr 09, 2010 @ 10:43:10

    Great article! I am printing it for my Glenn Beck loving husband.


  3. Peter Rabbit
    Apr 09, 2010 @ 11:54:46

    I agree with all of the comments as well. Good article. The two things that I don’t like in the Healthcare bill without including how much I don’t like Obama.

    1 – I don’t necessarily see how it addressed the rising cost of health care which I thought was the point. I would have liked to see more on capping lawsuits, controlling the cost of services and just in general ideas on bringing cost down.

    2 – I think the plan to pay for this is a big dream and I don’t like how so many of the payments are based on things that don’t have anything to do with healthcare. So you are planning to tax my dividends more to pay for healthcare? How does that make sense? I can see taxing Cadillac plans or adding a tax on things like tanning that are not required medical procedures but to me most of the way they plan to raise money for this plan makes no sense and I would be shocked if somehow they were not reversed by the next president which would leave us again with a huge monetary problem.

    As much as I like capitalism, I would be very content with the government saying that we need to improve health care, this costs money, so your taxes are going up X%, period. It is getting old that we try and get money only from the ultra rich (which by the way for those living in a major city you must be loving how 250k is considered ultra rich). Since when did America not support people trying to get ahead? When did it become a crime to succeed?


  4. Peter Rabbit
    Apr 09, 2010 @ 12:00:33

    Sorry forgot to mention.

    I used to live in NYC (now Chicago) where a long tenured teacher and a cop working some over time can bring in 250k. So before you comment on how greedy I sound by trying to avoid tax on the ultra rich consider whether you think a cop and a teacher with 2 kids are really the people we are trying to tax.

    I would be fine with 250k if it was indexed as in Iowa that may still be real money but in LA, San Fran, Chicago, New York, Boston and a few other cities this is merely what is required to be slightly upper middle class.


  5. kosmo
    Apr 09, 2010 @ 13:15:53

    I think it would make some sense to index things (even for normal tax purposes), although I’m not sure how to do this without having tax cheats take advantage. For example, let’s say The Casual Observer starts making tons of money. I “rent” space in a building in NYC to serve as my tax home.

    I understand what you’re saying about the cost of living in those cities, but those situations still must be somewhat unusual. This IRS stats show just 3 million returns out of 138 million filed last year having an income of 250K. So it’s not like there can be a million households make $250K in NYC, 500,000 housholds making $250K in Chicago, etc – you start bumping against that number of 3 million households pretty quickly.

    I wrote an article about this a long time ago – basically just slicing and dicing stats from the IRS.


    And take a look at this list of the counties with the HIGHEST median household income:


    This tops out at just above 100K median household (NOT per capita) income. So even in the richest counties in the US, the cop and teacher in your example are still someohow on the upper end of the scale.


  6. Peter Rabbit
    Apr 09, 2010 @ 13:44:59

    Few things to keep in mind.

    1 – This includes returns so a kid making 5,000 that files separate from his parents counts as a return.
    2 – This just doesn’t represent the cities in a fair manner.

    In NY I guarantee that 50% of the families are not living on under 30k which is what this implies. So if you assume those people making under 30k are either not in a major city, were only employed part of the year or under students and such then your 3% basically doubles.

    When I think of ultra rich I think of the top 1% not the top 6%.


  7. kosmo
    Apr 09, 2010 @ 13:54:16

    1 – You’re correct about this … but it also leaves out legitimate household that don’t have to file – such as a retired couple with social security, Roth IRA, and pension.

    2 – I’m not really sure what you’re suggesting here.

    In any case, I’ll accept your assertion at this represents the top 6%, for the sake of argument. I don’t fully agree with it, but we’ll go forward from that point.

    The top 6% might not be the ultra-rich … but I would have difficulty using the term “middle class” to describe them, when 94% of households are earning less.


  8. Peter Rabbit
    Apr 09, 2010 @ 14:15:55

    As I said I lived in NY and to feed a family of 4 you are no way middle class making anything below 60k or at least not the middle class the rest of the country thinks of.

    In the stats you posted 73% of the people made under 60k which for a single person filing is enough to be middle class but as I said a family of 4 no way.

    To put it in perspective. A maxed out NYC teacher makes 100k before any over time or summer job. Are you telling me that you consider a family of 4 with one parent working and being a teacher as upper middle class because guess what that person would be making more then 88% of the people in your IRS table.

    I don’t think you realize just how little this IRS table applies to a NY or any other major city.


  9. kosmo
    Apr 09, 2010 @ 14:45:07

    Whoa. When did we go from 250K to 60K?

    My point is that there are only 3 million households that fall into the 200K range, and obviously fewer that fall into 250K+ range (simply because some are in the 200-250KL range). You simply CAN’T have a million of those households in NYC, 500K of them in Chicago, 500K of them in LA, etc. You’re already at 2 million households … and you haven’t touched Vegas, San Francisco, Dallas, Boston, DC, Miami, etc – not to mention vast tracts of “flyover country” where some affluent people do live (such as Mr. Buffett in Omaha). The math just doesn’t work out. (I know, you didn’t suggest these precise numbers.)

    Do a higher percentage of households in those cities earn more than 250K? Certainly. Does it approach 30, 40, or 50 percent? Almost certainly not.

    What percentage of NYC teachers are maxed out? I suspect a relatively small percentage …

    Let’s delve into NYC a bit. According to this Wikipedia entry

    You’ll see this quote:
    “New York City has a high degree of income disparity. In 2005 the median household income in the wealthiest census tract was $188,697, while in the poorest it was $9,320”

    How big is a census tract? According to this:

    “Census tracts usually have between 2,500 and 8,000 persons” (note – this says USUALLY – these particular tracts might be smaller or larger)

    So, in the most affluent part of NYC, the median household income is below the 250K figure.

    Household income consists of all income within that housing unit, so the 16 year old kid mowing lawns would not stand along and drag down the median. And the median, by nature, is less prone to outlier skewing than the mean.

    I don’t dispute what you’re saying about the teacher and cop can make 250K … I’m just not sure how common this is. The maxed out teacher probably has decades of experience, which the vast majority of teachers wouldn’t have (since most of them are still climbing the ladder), for example – and the cop might be putting in more overtime than anyone else in the precinct.


  10. Peter Rabbit
    Apr 09, 2010 @ 15:18:08

    Maybe your definition of middle class is different then mine.

    Living in a 800 square foot apartment with two kids and having no savings to me is not upper middle class and far from rich but that is about where you get for 100k in NYC.

    For 250k you can have a house, college savings and eat more than Chinese takeout but you are far from having your own limo driver.

    As far as the teacher you are not entirely right. You need something like 22 years of experience and your degrees. So assuming you start teaching at 22 you could be just 44 and making that money. My sister is 40 in the teaching system (she is a school phsycologist) and makes much more than a max teacher and trust me she struggles with two kids and has zero savings.

    You need to live in NYC to understand the indexing that would need to take place. Here you can have fun with this site:


    I put in 250k in Brooklyn (not even Manhattan) and asked what that means to someone in Cincy Ohio (just picked a random middle American city) and it said 128k. You move up to Manhattan and you get 100k. Now that is a nice cost of living adjustment. Your salary gets cut in half. So people not living in Manhattan can now understand how 250k is not a lot of money. This is why the stats you are quoting are meaningless without indexing. Chicago is not nearly as bad as I thought but San Fran is basically like NY. I am guessing Obama makes the same arguments that you do.


  11. kosmo
    Apr 09, 2010 @ 15:45:30

    But the census tract data IS indexed specifically to NYC.

    And we’re not talking about 100K, nor are we talking about 60K. I’m STILL talking about the 250K point. Someone else might be talking about the other numbers, but not me.

    You do realize that 70% of the adults in this country don’t have a college degree, right? So the teacher is a step ahead of the game from day 1.

    The 250K in Brooklyn would be 135K in Iowa City. That’s more than my household income. And, despite that fact, we’re raising two kids and saving some for retirement and college. Are we flush in cash and without financial worries? No, of course not. But we don’t worry about the check bouncing when we buy groceries, either. And our household income is almost certainly higher than that of anyone in my family (I’m the youngest of 8 kids), far higher than any level every reached by my parents (who worked much harder), and more than most people in my social circle. I feel extremely fortunate to be at the level we’re at. Are we within the top 10% of households statewide? Most likely.

    There are an awful lot of people without degrees working in retail, on garbage trucks, doing data entry, etc. They far outnumber those with professional jobs. Certainly the people at Amoco who ring up my hot chocolate are making substantially less than me. And many of these people aren’t students working their way up – this is the job they will continue to have for many years.

    I think people underestimate the exceptional nature of the people around them.

    I suspect that we’re never going to see eye to eye on this issue, though.


  12. Zarberg
    Apr 09, 2010 @ 15:50:25

    Not agreeing or disagreeing with anyone here, but I lived in Brooklyn from 1997 – 2002, making around 72K. I had a fairly low rent ($800 a month, thanks to a great find on a 3 bedroom apartment that I shared with 2 college friends) and lived comfortably, not at all extravagantly.

    Most of the people I know living in NYC with under a 100K/year income are either in outlying areas of Brooklyn/Queens/Bronx or have a rent-controlled apartment in a family name that hasn’t had a major rent increase in 20+ years.


  13. Evan @ 40Tech
    Apr 11, 2010 @ 18:16:08

    Just to dispel one of the talking points in one of the comments above, so-called tort “reform” won’t lower health care costs. Many many studies put the cost of lawsuits, preventative medicine, etc. at anywhere from one-half of one percent, to 1.5% of total healthcare costs. Remember, as a country we spend somewhere between 3 and 4 TRILLION per year on healthcare. And if you look at even the smaller picture (just the doctors’ insurance costs), the nation’s largest medical malpractice insurer has already admitted that caps on lawsuits won’t lower premiums.

    Tort reform is one of the talking points that is trotted out there frequently, but even those on the right who are somewhat moderate know it isn’t the silver bullet that some try to make it out to be.
    .-= Evan @ 40Tech´s last blog ..What’s On My iPhone — Part 3 =-.


  14. Martin Kelly
    Apr 11, 2010 @ 20:32:57

    The disagreement that I have with this entire discussion is that our health care system is broken and that the federal government can fix it by establishing taxes and assign penalties to people who choose not to participate.

    Even the most extreme estimates only have about 1% of the population not having “health insurance”. The political discussion that started last summer and ended in the current law was concerned with a lack of “health Care”, not insurance. A problem affecting 1% of the population should not drive a complete overhaul of the system. If we used that measure, the post office would have been shut down long ago, and no one would be allowed to drive any vehicle on any road.

    I agree with the original premise of the original article, that most of the bill is misunderstood or misrepresented. I just wish we had known what was in the bill before it became law. I do not believe that this law represents the end of America, but I also do not believe that our taxes are not going to go up dramatically to pay for this law.

    One thing that I cannot let go by is Zarberg’s claim that the WHO report is somehow accurate, putting Cuba ahead of the US in health care. A major part of that report is the amount that the government of a country spends (positive) and the amount individuals spent (negative), therefore any of the socialist nations will score higher. With this law, the US will jump from 37 into the top 10 without providing one more ounce of care to anyone. Just as a note, that same report claims that North Korea is in the top 50 because so few people die of disease, they die of hunger and execution.


  15. Zarberg
    Apr 11, 2010 @ 20:38:36

    Do you have any reference material to cite the claims you’re making?


  16. Peter Rabbit
    Apr 12, 2010 @ 08:13:03

    I think both Zarberg and Kosmo proved my point for me. I am not claiming that 250k makes you poor in NYC but that it doesn’t make you ultra wealthy. So the fact that Zarberg as a twenty something year old shared a 3 bedroom with 2 more people and was making 72k (in 2002 which is a long time ago) and that Kosmos is admitting he is not wealthy when he looks to be close to the cost of living adjusted Iowa City equivalent of 250k is my exact point.

    I doubt either pegs themselves as the ultra wealthy yet both are already close to the dollars we are speaking of. If Zarberg were a family of 4 then assuming his wife made what he did and he was not ready to share his apartment with 2 kids and 2 college buddies then his 72k back a decade ago starts to look not so hot anymore.

    Anyway, really I have history on my side. Just look at the AMT. Originally it was inacted to punish the very very rich, in fact really it was born out of the government noting that 155 people with high incomes were not paying any taxes. Today it is estimated that without the fix that was just put in 39% of all married households with children would be affected by the AMT.

    Anything monetary that is not indexed for inflation and geography is just a bad idea.


  17. kosmo
    Apr 12, 2010 @ 10:32:33

    Ultra wealthy? No.

    Better off than a substantial majority of Americans? Yes.

    And it’s important to note that I am NOT quite at that level. If I was at that level, I’d feel even more fortunate. A lot of this feeling is probably based on my background – we’re MUCH better off than my parents were.

    I fully agree that indexing for location would be optimal. But how do you do this without having people cheat the system? That’s the rub, unfortunately. If the entire tax system suddenly indexed itself for geography, I guarantee that the “population” of New York City would swell overnight.


  18. kosmo
    Apr 12, 2010 @ 11:30:51

    For the record, the two points I’m making are:

    1) Even in NYC, 250K isn’t struggling. When indexed for cost of living, my household is below that level and I definitely wouldn’t considering myself to be struggling. Much, much closer to thriving, especially after we get out of the yoke of daycare costs. In theory, the NYC family of four living an identical lifestyle should be in an identical situation.

    2) I’m a fan of indexing thing for the cost of living of the city … but I’m not sure how this can be done in a way that doesn’t encourage large scale tax cheating.


  19. Peter Rabbit
    Apr 12, 2010 @ 16:11:15

    I think the point is still being missed. The Obama platform has been we will tax the ultra rich. 250k in certain measures is not even close to ultra rich and in 3 to 5 to 10 years when this law will still be around 250k may be middle class. Inflation can be a very powerful thing.


  20. kosmo
    Apr 12, 2010 @ 16:27:18

    The point isn’t being missed, we just disagree.

    If my household income was 250K, I’d definitely consider myself to be damn well off. Go ahead and index it for geography and inflation. I have no problem with that.

    The tax brackets actually *ARE* adjusted from time to time to reflect inflation. You are correct about the AMT issue, though.


  21. Alvin Redenz
    Jun 30, 2012 @ 11:34:58

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