Gary Stewart
Special to the Bonanza

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August 1, 2012
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Guest Column: Obamacare likely to be paid through higher taxes

INCLINE VILLAGE, Nev. — There are a few unstated facts about Canadian health care. First, how is the cost of care paid? The answer — taxes.

Canada has Federal income tax, in most cases provincial income tax, sales tax in most provinces and finally a national goods and services tax. The national tax, GST, is about 7 percent. This means a product purchased in a province with a 7 percent sales tax will have a total sales tax of about 14 percent. The GST is applied to all products and services including food. The GST is the primary source paying for health care in Canada. The individual income tax rates in Canada are also considerably higher than comparable rates in the USA.

It is true many Americans will get medical services, and especially prescription drugs in Canada. What is not stated is many Canadian citizens get their medical care in the United States and did so even when currency exchange rates were unfavorable to Canadians. The primary reason was the waiting time. People could/would not wait 6 months or more for medical treatment in Canada.

What about the Romney plan in Massachusetts? The reality is many companies there have dumped health care plans and forced workers to the government plan. Most workers find the government plan unaffordable.

What lies ahead for Obamacare? About 10 percent of companies plan to drop health care plans and others are considering the idea. The Congressional Budget Office (CBO) now estimates we will still have 30+ million uninsured after Obamacare is fully implemented.

Finally, how will we pay for Obamacare? Most likely through higher taxes.

Do we need to change health care? Definitely. A person needs to be able to take existing coverage across state lines. In some cases this already happens. If you have Anthem/Blue Cross in Nevada you really have coverage from a Colorado company marketing in several western states including California and Nevada. In contrast, if you have Kaiser insurance and move from California to Nevada you have to drop Kaiser coverage and get coverage from a new source. If you try to keep Kaiser you will be forced out.

Why is this likely the case? Very simply stated, local health care sources don't want Kaiser competition. Kaiser builds and owns medical facilities. If allowed to cross state lines it would be a job creator. Anthem pays insurance claims of local providers while Kaiser sells health care through its own program.

We also need transparency in medical costs. A recent lab test was billed to insurance at $937. The agreed reimbursement rate paid by insurance was about $54. The difference was listed on the insurance statement as “patient savings.” The $54 was to be paid by the patient and applied to deductible. The insurance “game” allows a medical provider to conceal the true cost of services. An uninsured person would pay $937 — a Medicare or Medicaid patient would likely pay considerably less.

We also need to reform the medical tort claim process. A responsible party should certainly pay. It would seem though every third TV commercial is from a law firm recruiting plaintiffs for class actions against pharmaceuticals.

— Gary Stewart is an Incline Village resident.

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Tahoe Daily Tribune Updated Aug 1, 2012 02:32PM Published Aug 1, 2012 02:31PM Copyright 2012 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.