Sales Tax for Universal Healthcare in Oregon Seriously Considered
The single-funding proposal has some Republican support for further study
April 12, 2011 -- A bipartisan group of lawmakers are behind an idea that would look into using a sales tax to fund universal healthcare in Oregon.
Democrats took pains to describe the concept as a single-funding proposal rather than a single-payer initiative because it would maintain commercial health insurers similar to managed care organizations operating under a global budget.
Single-payer supporters appear intrigued, but not in full support yet. They asked that a system eliminating health insurance companies also be considered.
If realized, Oregon would be the first state in the country to enact a dedicated funding source to extricate health insurance coverage from employment. Vermont and Rhode Island among several other states, have similar proposals in the works for universal coverage.
Senate Bill 972, called the Oregon Healthcare Ingenuity Plan, directs the Oregon Health Authority to scrutinize the idea and come back to the legislature in 2012. The plan would then be put to a vote on the November 2012 ballot.
The idea involves a broad-based sales tax around 5 to 7 percent that would generate around $11 billion to $12 billion, enough money to provide every Oregonian with an essential benefits package, based on a preliminary analysis by the Office of Health Policy and Research. The net premium revenue for the top Oregon insurers is around $7 billion per year.
In other words, both individuals and businesses would no longer pay a health insurance premium, replaced instead by a sales tax – excluding groceries, utilities and shelter – paid by individuals based on consumption.
The concept is spearheaded by John DiLorenzo, an attorney and well-known Salem lobbyist.
“We should study this proposal because it will be a great deal for Oregonians,” DiLorenzo told members of the Senate Committee on Health Care Human Services and Rural Health last week. “All one needs is a calculator to come to that conclusion.”
For example, a person currently spending $600 a month on health insurance premiums would have to spend more than $100,000 a year for a 7 percent sales tax to match what he or she would spend on health insurance. And, a young person spending $100 per month would need to spend more than $17,000 for the tax to be a wash.
Other benefits include expected job growth when businesses would no longer need to pay the 15-20 percent of their revenue on health insurance. The state would also receive greater income tax revenue in return.
“Businesses could focus on business,” DiLorenzo said. “Women in abusive relationships could leave them without fear of healthcare for their children. People could pursue work they’re good at rather than employment as a means for an end.”
Detractors might say a sales tax would hurt businesses at the same time. And Oregon voters are notoriously opposed to a sales tax.
The state already has high income and property taxes. But compared to health insurance where the older and sicker pay more, or can’t buy it at all, a sales tax is expected to fare better in public opinion, especially if people understand they would no longer need to pay a health insurance premium, say supporters of the bill.
Ryan Fisher is a lobbyist for the Community Action Partnership of Oregon, which works on issues related to poverty, and co-chairs the Human Services Coalition of Oregon.
“What attracted me most from a low-income perspective is the disconnection between health insurance and employment,” Fisher said. “It’s certainly an idea from the moment I heard it. I just keep thinking about. I think there’s some merit to it.”
Fisher said it’s too early to tell how it might play out among progressive groups. Low-income advocates might lobby for offsets in other taxes such as the earned income tax credit. There are also questions around the benefits package.
“It’s very early,” Fisher said. “This is a 50,000-foot view at this point. What matters is how some of the details are handled.”
Sen. Alan Bates (D-Ashland), who along with his colleagues, Sens. Chip Shields (D-Portland), Laurie Monnes-Anderson (D-Gresham), Jeff Kruse (R-Roseburg) and Frank Morse (R-Albany), is the bill’s sponsor, and voiced some skepticism of how a sales tax might play out among voters.
“The public’s first reaction is going to be sales tax ‘no,’” Bates aid. “We have to get past that and have that discussion and not be fearful of doing that because we have elections coming up.”
The committee will hold a work session on the bill Thursday.
TO LEARN MORE
For the committee’s web site, click here.
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Study all you want -- we will still have to face the issues PEBB is facing now: health care costs a LOT, and we all want to use a LOT of it, especially when we don't personally feel the pain of that cost. Doesn't matter who signs the check, we still have to figure out (1) how to use less health care and (2) how to afford what we do use.
It does not matter how much money is raised or how. Until we deal with the monopoly of the health care insurance companies and come at the problems negotiating from a position of strength, all grand ideas are destined to fail.
The monopolies of the health insurance companies and the AMA are the greatest problem. With a fully accessible system of WELL CARE, and reasonable costs for services, program costs will go down over time, not rise. As the general overall health of our population increases due to increased access and education, whatever is left in the fund could be used to subsidize the outrageous cost of becoming a doctor.
What monolopy?
My major concern relates to no factual mention of Medicare, and how this would affect those health care consumers ... what about the actual Medicare premiums? - what about any supplamental insurance premiums? - and, what about MedicaceAdvantage programs?
While this tax program is aimed at the employer and the under 65 Oregonian, what are the built-in controls on the insurance industry's propensity to outrace annual inflation rates by up to 500%?
As stated above, what's been proposed is the 50,000 foot view - the magnifying glass needs to be used.
Oregon does have higher income tax rates than most states, but our property taxes are average not high.
Public/Private Employee Unions' Surrogate, Chip Shields, Votes For Single-Payer Sales Tax
Willamette Week reports that state senator Chip Shields has voted in committee for a so-called Health Care Sales Tax to be dedicated to Single-Payer.* [Well, not exactly but that's the only logical interpretation.]
As an elected legislator Chip Shields, who voted for the Billion dollar health care bill concocted over the previous three sessions by his Democrat colleagues - now languishing mostly unfunded, has long opposed Single-Payer and a Sales Tax. However, remarkably, this session, apparently struck by lightening or more likely ordered by his financial masters who pay for his campaigns and lead the public/private employee unions, Shields not only supports Single-Payer but persuaded his senate General Government, Consumer and Small Business Protection committee to submit a Single-Payer bill, SB 888. So Shields' vote to explore a Health Care Sales Tax can only be interpreted to mean that senator Shields intended a future Health Care Sales Tax to be dedicated to an Oregon Single-Payer health care system. We really need to ask Shields' bosses, AFL-CIO leader Tom Chamberlain et. al., "What the hell is going on here?" How does this benefit the public/private unions? Of course it MUST.
Judging from the evidence of Shields' past positions on health care plans and payment options there is absolutely no reason to believe in his sincerity or commitment regarding health care reform.
Are there any Oregonians who believe that the Oregon legislature would not use any so-called "dedicated" tax fund, like say the Cultural Trust Fund money, for some general fund purpose if they "needed" to?
Are there any Oregonians who would TRUST the Oregon legislature to NEVER touch a so-called "dedicated" Health Care Sales Tax fund?
A so-called "dedicated" Health Care Sales Tax that was NOT committed to Single-Payer would be an wide open spigot pouring ever increasing private, for-profit health insurance industry premium costs from an ever increasing Health Care Sales Tax.
Richard Ellmyer
Former progressive candidate for the North Portland House seat in the May 2010 primary, who authored the no tax increase, Single-Payer type plan, the Oregon Community Health Care Bill, in 2004 and who has supported Single-Payer as the ONLY health care solution to Oregon's and America's moral and economic health care crisis. Defeated by establishment Democrat, Tina Kotek, who would not extend the constituent courtesy of submitting my Oregon Community Health Care Bill, does not support Single-Payer and voted for the Billion dollar health care tax increase legislation of previous sessions.
P.S.
Chip Shields promised me that if he was appointed as my state senator, which he was, he would submit my Oregon Community Health Care Bill. He didn't. He lied.
*
http://www.wweek.com/portland/blog-26863-lawmakers_want_study_on_healthc...
Oh Dear,
One lie leads to another. Hmmmmmmm.....Chip Shields as the proposer of this angle in Oregon is also posing the "real" sales tax issue connecting it to Healthcare issue, to set a precedent of Voter approval for sales tax in general, it would seem to me as a voter. Washington has no State income tax in lieu of sales tax. We would just ad another layer of Tax from our own plans for freedom with OUR money. Now, about the Healthcare bit. Oregon Health Plan is already in play, for the less able. Take the existing program and "stay focused" and improve on that. No new wheel inventions are nessessary. If it is REALLY about Healthcare then IMPROVE WHAT WE HAVE!!! I do system improvements in my home ALL the time and it costs me nothing!!
Questions:
How would this effect Medicare and Medicaid receipients (Federal Programs)?
Would the sales tax be a deductable item when filing State tax returns?.returns.
How would the program be administered?
Assuming Health Plans serving Oregoninas receive reimbursements from the State would their premiums and or services somehow leveled or capped for listed services?
Personnally I like the idea. Countries like Japan, France, Germany, and the U.K. have similar universal plans in existance and have lowered the % of gross national product significantly. A single payer making payments to providers or health plans health plans means much less administration costs for health services. I suggest our legislators read the NY Times bestseller "The Healing of America" by T.R. Reid as a research aid.