A couple of years ago, a bump grew on my forehead. It didn't hurt, and by the time someone noticed it, it had stopped growing. Concerned friends and relatives began to push me to see a physician, fearing it might be cancer or some other dangerous condition. Finally I relented and my worst fears were realized — I had taken time out of my all-too-limited life to find that what I had was nothing more than a bump on my head. This didn't satisfy anyone, and I continue to be bothered about getting it removed. The question is whether I should do so, and whether everyone else should help to pay for it with tax dollars.
I spoke with my health insurance company, which said I would have to go to the doctor who would confer with the company on whether a removal was "medically necessary." My observation is that for purposes like this, "medically necessary" depends in part on how hard one is willing to push, and how adept at working the system one is. I also observe that if the procedure were not covered by insurance and I paid for it myself, I would probably pay less that the insurance company would be charged.
If I did have the bump removed and it wascovered by insurance, taxpayers would, in effect, cover more than one-third of the bill for bump removal. That is because employer-provided health insurance is tax-free income, a large subsidy for those fortunate enough to have it. Even if it wasn’t, I could deposit money into a tax-exempt account and use it to pay for bump removal, getting the tax subsidy in any event. In a prior post, I had written that taxpayers, via the tax break, were going to be paying for one-third of my children’s braces via these two breaks.
What would the political parties say about the bump on my head?
Well, to judge by past stands, the Democrats would say that a government program should ensure that every bump on every person's head should be removed at public expense, no matter how much the politically helpful health care industry chose to charge for it. But if the Republicans were unwilling to support universal health care today, then at least the widest range of services should be provided to those fortunate enough to have coverage, to provide a precedent for later. More extensive health care for some, thus, is better than a more limited scope of services available to all, to the Democrats. And that is what we have.
And, to judge by past stands, the Republicans should say that I should pay for my own bump, to provide a consumer incentive to keep down health care costs. But I should be able to pay for it with a pre-tax health care savings account, a program that would provide a greater tax break the higher one’s income, and grow to a large enough amount to allow basically healthy people like myself to remove all their bumps, while those who suffer from severe chronic conditions lack the money required to stay alive. The Republicans, in other words, want to eliminate transfers from the better off to the less well off, and from those fortunate enough to be healthy to those unfortunate enough to be sick, in the guise of consumer empowerment.
I bring up the bump because of a front-page story in the December 5th edition of the Wall Street Journal. A young woman in Tennessee was stricken with Lupus, a debilitating disease that, with current medical techniques, can nonetheless be managed over a near-normal lifespan. The woman had planned to go to college before the disease hit, and worked for several years in a low-wage job with health insurance, but later became too sick to work and lost that insurance. She was, for two years, eligible for TennCare, that state’s version of Medicaid, but when costs rose rapidly that state cut eligibility, removing tens of thousands of people from the rolls, including the young woman. Unable to afford to go to the doctor for routine screenings, she developed an organ infection that is a deadly but treatable symptom of the disease, and died in her early 30s.
Had she been over 65, or a public employee, or an employee of a firm that provided government-subsidized employer provided health insurance, she would still be alive. Before she died, while she was working, some small fraction of a cent of her federal taxes may have gone to my child’s braces. If I bother to get the bump on my head removed, some similar person somewhere will help, in a tiny way, to pay for that as well.
At this point, the state and local government finances of the State of Tennessee are with mentioning. Whereas New York State has elected to overpay for non-vital Medicaid services despite having the federal government pick up must 50% of the cost here, Tennessee elected to slash a more limited program even though the federal government picked up 64% of its total in FY 2006. Whereas New York State led the nation in Medicaid spending per beneficiary in 2003, according to data from the Center for Medicare and Medicaid, Tennessee was second from last.
As I have written here, New York’s state and local taxes as a share of its residents’ personal income are either at or near the top among states each and every year, with Wyoming and Alaska coming in higher when oil-based taxes are rolling in. Tennessee has among the lowest taxes in the country each and every year as a share of income, usually the lowest, but in FY 2004 the second lowest, according to data from the U.S. Census Bureau. Justifying the decision to cut this young woman, Nikki White, off, a spokesman for the state said that extended coverage nearly bankrupted Tennessee. But that is only because Tennessee residents insist on paying so little in tax, especially compared with New York.
If the portion of New York State outside New York City were a separate state, its public school spending as a share of income would be the highest of any state by far. New York City is below the national average today, and during much of the 1990s would have been close to the lowest among states in public school spending as a share of its residents’ income if it had been a separate state. During many of those years, Tennessee was the only state that would have been lower. In FY 2004, it was the second lowest.
In other words, Tennessee is equally as extreme as New York, in the other direction. The business community seems to approve, as the state continues to attract extensive business relocations, although the top execs generally live and work in other places with better schools and health care. Its auto industry, for example, is booming while that of the Midwest shrivels. But Tennessee residents seem to approve too. Democrat Phil Bredesen won election in 2002 by promising to cut TennCare, and eventually forced many adults off the rolls. He was re-elected in 2006 by a wide margin. Later he had a health scare, and received top quality care at the Mayo Clinic, paid for government-funded insurance no doubt.
There is, however, an honesty to Tennessee’s attitude, in that Nikki White (who, by the way, was White) died in Tennessee, rather than being encouraged to travel to New York City and apply for Medicaid as many from the South Atlantic states do, for care funded (my estimate) 37% by federal, state and local taxes collected in New York City and 18% by federal, state and local taxes collected in the rest of the state.
Unlike New York State’s education finance formula which cheats my community, or federal Social Security and debt policies which have cheated my generation, I’m the purported winner here. I suppose I should gratefully suck up every health care subsidy I can get, thrilled that the U.S. spends more on health care as a share of GDP than any other country, and perhaps go to Tennessee and spit on Nikki White’s grave grateful for the taxes I didn’t have to pay for her (and other’s care). Or look forward to other young people with chronic conditions close to home suffering for my benefit. But that’s not what I set out to do with my life.
Moreover, looking at the situation more broadmindedly, am I really a winner? For 20 years, a large part of my compensation at work has been in health insurance rather than pay, yet I have consumed virtually no health care. What if my wife and I happen to become unemployed, and are without employer provided health insurance, in our 50s when we might actually need it. What if one of our children was to develop a chronic condition like Nikki White’s? I remarked previously that today’s winners, from CEOs with their overlarge paychecks to public employees with their rich pensions, are incapable of even enlightened self-interest, and continue to demand more and more until something cracks. They can’t even imagine a future in the shoe is on the other foot. With the nation’s highest tax burdens, we have put a lot into the community. Would the community be there for our children? Having already flunked the education test, my gut feeling is no. At least in Tennessee, they haven’t paid for what they aren’t getting. Here in New York, we have a health care industry threating retaliation if incoming Governor Spitzer cuts Medicaid spending from number one to still far above average.
Thinking again about my virtually unlimited health care at a virtually unlimited price with public subsidy, and Nikki White’s inability to get basic, vital health care at a reasonable cost (private insurers would not take her), I’m reminded of some ideas in Basic Rights, a book by philosopher Henry Shue I read in college (and which I can turn around in pick off the bookshelf right now).
Professor Shue didn’t hold that all inequalities are morally wrong. He established a “priority principle” with basic rights and needs at the top, followed by other rights, culturally significant preferences, and mere personal preferences. An economic and political system that gives the mere preferences of some priority over the basic rights and needs, the vital interests of others, constitutes a “degrading” level of inequality that in effect denies the humanity of those whose vital interests are denied. “A refusal on the part of an affluent person (one for whom most spending goes to mere preferences) to use any of the wealth at his or her command in order that others may be enabled to enjoy their basic rights would be an insistence upon the maintenance of an inequality that would be degrading: an inequality constituted by protected affluence and unprotected subsistence.”
Shue called his theory the “moral minimum.” And he was writing about impoverished countries in the world, not just less well off people in rich countries, so his view about what constitutes basic needs versus mere preferences was Spartan indeed, placing me and mine squarely among the affluent.
As I wrote about New York State school aid, the winners expect a high level of service from our political system. They not only expect to win, but also expect to be kept in blissful ignorance of the consequences of their victory for the losers, and to be told they deserve everything they get and more. But for those willing to see things as they are (or not able to close their eyes in any event), how can anyone be happy with a health care finance system like ours? If there were no government-financed or –subsidized health care, Nikki White might still have died. But at least she wouldn’t have had to pay taxes for those getting public subsidies for their mere preferences, such as the removal of bumps on their forehead, which from my point of view might not even be my preference.