What is a tax and what is not a tax and what pays for government run health insurance?

[Stinky The Clown]

Bear with me a moment. I just want to follow this out using the more or less ambiguous terms and figures we all keep hearing.

Let's accept that there will not be single payer, but there will be insurance available by what looks like a normal insurance company but is owned by the government and operated by the government. They will simply not have profit as their motive. They will, as is every other insurance company, be funded solely from premiums and investments made with funds held as reserves against future claims. They will be bound by the same mandates - no preexisting conditions, portability, etc. - that the government is about to implement.

So, the only difference between this new government owned insurer and every one already in existence is the profit motive. All will be able to implement the same operating efficiencies and all face pretty much the same operating expenses apart from paying profits.

So ..... Tom and Sally are now paying $30,000 per year for a reasonably good health insurance policy (Yes, some of us pay about that much) purchased as a single family on the open market.

After the implementation of this new government owned insurance company, Tom and Sally can keep what they have or they can shop. So they start to look around. $29K here ...... $32K there ...... $24K for that HMO ....... $21,000 for that high deductible policy. And then there's that government company. $18,000. (Insurers average about 40% in profit, high executive salaries, marketing, etc. The public company will have none of that, hence the 40% lower premiums.)

So Tom and Sally choose the government run option. They pay $18,000 in premiums. They pocket the difference between their old policy's premiums and their new one - a very hefty $12,000.

In this example, Tom and Sally pocket a savings of $12K and pay the government a total of $18K. That is $18K to the government that they never paid before.

Is that a tax? Or a premium?

Who cares? They just SAVED $12K.

One would have to be a fool not to take that deal.

But is it a tax increase?

Who cares?

Is the fee you pay for your car's license plates a tax or a "fee"? Is the water bill paid to the government who supplies your water a tax ... or a "fee"? Is the cost of the pass to use the town dump a tax .... or a fee?

You buy the military protection (or fire protection, or police protection, or border security protection, or the protection of the Coast Guard, if you're a boater) you get by way of direct taxes to the government. In return, you get a safe country, city, town, lake, or sea shore. You pay something and you get services in return.

How is paying an insurance premium to the government any different? It isn't, really.

And after a few years, and lots of success, we'll find even teabaggers opting in to this far cheaper option, with minimum service levels set by law,a nd availability to everyone.

And when that happens, it is, by definition, single payer. And then we can stop bullshitting each other and call it a premium. It will be what it actually is.

A Tax.

And in my view, that's a GOOD thing.