At the Democratic debates, the issue of healthcare took center stage. There were two camps: one for Medicare for all, the other for allowing Americans to keep their employer-paid health insurance. Not one of the candidates mentioned that private health insurance paid for by manufacturers, like General Motors, and costs the American economy millions of jobs.
President Trump, on the other hand, has no healthcare plan at all. He is still fighting Obamacare. Apparently, Mr. Trump does not understand that our private health insurance system makes the United States less competitive in the world economy.
In Canada, General Motors saves $1,500-$2,000 per car because health insurance is paid for by Canadian provincial governments. This has increased Canadian auto manufacturing significantly. Canada manufactures one-third as many cars as are made in the USA, but has one-tenth of the population. In other words Canada makes three times as many cars as the United States per capita. This is primarily a result of the way Canada finances healthcare.
Similarly, all European countries cover workers health insurance, keeping those costs away from manufacturers. The massive German auto industry thus has a significant cost advantage over U.S. car manufacturers.
In Mexico, Ford, GM and Chrysler pay workers $2 an hour, less than they pay in the United States for health insurance alone. Before NAFTA, Mexico hardly made any vehicles. They made 547,000 cars in Mexico in 1990, a few years before NAFTA went into effect. Today, they make 4 million cars in Mexico annually compared to only 3 million cars made in the USA. Mexico manufactures more cars than the United States with only 40% of our population.
What Can We Do About It?
If health insurance were paid for by the government, all U.S. manufacturers will be more competitive. This means that members of the United Auto Workers will have to give up their gold-plated private health insurance. In exchange, the U.S. auto manufacturers, including Honda, Toyota, Mercedes, Volkswagen and BMW, should pay their workers more.
Presidential candidate Andrew Yang wants the government to hand out $1,000 per month to every man, woman and child in the United States. Instead of this outlandish give-away, the federal government should cover Medicare for all Americans, with no premiums and 100% coverage. This would level the playing field and allow American manufacturers to compete in the global marketplace.
Medicare for All is Not Enough
Medicare is exceptionally complicated. The government pays for Part A, which covers eighty percent of hospitalization costs. Part B covers out-of-hospital care, and it costs about $135 per month to cover 80% of the costs. Most retirees then pay for additional private insurance to pick up the 20% that Medicare doesn't pay for. I pay about $180 a month for this coverage. So even though I am on Medicare, I pay more than $300 per month for supplemental private insurance. All of these additional expenses should be covered by the federal government, as they are in Canada and Europe.
How Would We Pay for It?
Corporations are now paying a smaller proportion of the federal budget than they ever have. In 1960, when John F. Kennedy was president, the corporate income tax accounted for 23 percent of all federal revenue. Now corporations are paying less than 10% of federal revenue. The Trump tax reduction lowered the U.S. corporate tax rate to 21%. The top individual tax rate is 37%. In 2010, in the Citizens United case, the U.S. Supreme Court ruled that corporations are people under the constitution and entitled to constitutional rights. If corporations are persons under the constitution, then why should they pay a lower rate than individuals? If corporations have equal rights, they should pay equal taxes.
Because of tax loopholes, massive corporations like General Electric and Amazon pay no federal income tax at all. This must change. If we get rid of all tax loopholes and tax corporations at the same rates paid by individual taxpayers, we can provide every American with government-paid-for healthcare.