Tax unhealthy eating habits

About 40 million Americans are without health care coverage, which in turn is cost-shifted to those who carry the coverage.

This situation, among others, has forced health care costs to escalate every year. This article addresses a solution to the health care problem in America. It also addresses employer group plans but would work the same with individual contracts.

Everyone needs to be covered by some kind of national health care up to a maximum of about $20,000 annually. About 90 percent of all medical claims will fall into this category nationally. Employers will buy group policies with a $20,000 deductible and a maximum benefit of $1 million to $2 million. This will reduce employer costs and employee costs by 60 to 70 percent because of the $20,000 deductible. Now, employers, how would you like to reduce your medical insurance costs by this amount?

States do hiring

The first $20,000 of coverage through the national health care system will have 100 percent coverage because we are covering everyone and many Americans cannot afford any out-of-pocket expense. Each state will hire an insurance company to administer the claims associated with the national health care coverage.

The insurance piece bought in excess of the first $20,000 of coverage will have 10 fully insured medical and three prescription plans to choose from seven different insurance companies (there are really only seven insurance companies left that are players in the marketplace today).

Every company will offer the same plan designs (much like Medicare supplements) with the only difference being costs. Offering only 10 plans will reduce cost in the operations areas of insurance companies which will in turn help minimize rate increases. Those companies who self insurance will not be limited to a certain plan design except for the first $20,000 of coverage.

So, how are we going to pay for this national health care benefit for the first $20,000 of coverage annually? The only fair way to financially support this program is through a user tax. This user tax would be assessed on food based on its nutritional value. The worse the nutritional value the more tax you pay.

For example, a standard of criteria has to be set based on nutritional value. There are five categories that could be established:
0 – 25 = 0 tax, 251 – 500 = 25 percent tax, 501 – 750 = 50 percent tax, 751 – 1000 = 75 percent tax, 1001+ = 100 percent tax.
If nothing else would happen, this in itself will educate the public on the nutritional value of food that they consume daily. This concept will force food retailers to offer better choices and will in turn result in healthier Americans. Purdue University researchers published a report last year that stated that 71 percent of all medical costs are related to lifestyle and this is definitely lifestyle driven.

If only 200 million people pay $1 a day in tax for 365 days, that is 73 billion dollars a year in funding, and this is being conservative.

Be patient

It will take five to seven years before we see the effect of healthier consumers and lower medical costs, which in turn will result in affordable medical premiums. If premiums do not go down or people are eating healthier then we just raise the national health care benefit to $25,000 and lower the category ranges while keeping the tax consistent.

This concept is not new since we have been using it on the use of cigarettes for years. Look at the tax on cigarettes today and the cost of a life insurance policy if you are a smoker. We are taking this a step further and applying it to a food intake. The result will be a healthier America and a health care program paid for by those who abuse the nutritional criteria. Now, I like that idea of cost shifting.

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Andy Denny of Seymour has been involved in the insurance industry for 33 years.