Carcare and Caraid

  • What if the global-warming greenies take control and mandate that from this point forward, only electric vehicles can be sold in the United States?
  • And in order to make that happen fast, they invent Caraid and Carcare — modeled on Medicaid and Medicare, of course.
  • What will vehicles cost after the creation of Carcare and Caraid? Not $30,000. Because Carcare pays $10,000 (33 percent) and Caraid pays $7,500 (25 percent) per car — just like Medicaid and Medicare underpay for medical services.
  • The medical payments game of teeter-totter between the private sector and government programs should be as level as possible.
  • We need to end the private health insurance hidden premium tax once and for all!

Could you imagine?

Allow me to veer in a slightly different direction this week, down another less-traveled road (pardon the pun). What if the global-warming greenies take control and mandate that from this point forward, only electric vehicles can be sold in the United States? What if they mandate the end to gasoline-fueled cars? (A bad idea for a variety of real-world reasons, more on that in the future.) And in order to make this happen ASAP, they create Caraid and Carcare — modeled on Medicaid and Medicare, of course.

Before the new government car purchasing scheme takes effect, new cars on average (for easier math and argument sake) cost about $30,000 each. What will they cost after the creation of Carcare and Caraid? Not $30,000. Why? Because Carcare pays $10,000 (33 percent) and Caraid pays $7,500 (25 percent) for these vehicles. Remember, they modeled their payments (or lack thereof) in the mold of the government’s health care subsidy programs mentioned earlier.

Then, like the health care system, more than half the cars will be purchased by the government (40 percent by Medicare and Medicaid, the rest by federal and state governments for their workers). The average price of a new privately purchased car will skyrocket to more than $60,000. Unless Carcare and Caraid pay more. Think about how hard it will be to buy those brand-new electric vehicles for those (you and me) who are non-government program purchasers. On the other hand, those getting “free” cars from the government will be pretty darn happy.

Just as Carcare and Caraid should pay the same as other buyers of cars, so should Medicare and Medicaid when it comes to health care services. Unbelievably, these two government programs are purchasing about 40 percent of the $3.5 trillion health care goods and services in the United States. That $3.5 trillion is about 18 percent of our economy.

Now that we understand the problem, the good news is that the solution is quite simple: The government and large health insurers (and everyone else for that matter) should pay the same rates for the same medical services. The government should pay its fair share. It isn’t fair for hard-working Americans who struggle to pay for their own insurance or have to go without insurance because they can’t afford it while the government pays so much less. Insurance premiums for private payers would be 30-40 percent less if the government programs simply paid their fair share of the burden.

The medical payments game of teeter-totter between the private sector and government programs should be as level as possible. Millions of Americans with private health insurance policies should not pay more (nor less) than what the government pays for the exact same medical services. We need a national, rational, transparent health care payment system — not Medicare for All.

As a nation, we need to end the private health insurance hidden premium tax once and for all!

Frank Lasée
President
The Heartland Institute

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