Up to 50% of our taxes & insurance premiums go to cover ‘lifestyle’ activities. Lifestyle is therefore the largest category of discretionary spending with the potential of reducing our costs by up to this same 50%. Lifestyle is also a far more accurate predicator of our future health care needs and social service requirements. This allows lifestyle to provide the best measure of planning & forecast over today’s ‘comparison shopping’ models. ROOPA highlights the number of savings and other advantages gained from this dual track of lifestyle and its corresponding social costs models. Welcome to the ROOPA.
Lifestyle Based Health Care Plans
Designate up to 50% of our taxes and insurance premiums based upon our own lifestyle preferences. It’s more cost effective than today’s other health care options. Most importantly, it replaces gov’t or insurance companies from making these budgeting choices in our name (wherein the controversies, corruption and mismanagement all lie).
The program itself is referred to as ROOPA: Responsibility for One’s Own Products & Actions. This is presented in our book, titled: Social Cost: The Magic Bullet to Health Care Reform. We offer a 4 page summary here for those interested.
Excerpt:
“The ‘social cost’ of obesity averages around $150 billion a year. This comes to about 10 cents per item (of junk food). Every soda pop, hamburger and candy bar will now have this 10 cent premium. (Based upon number of calories)
The more soda you drink, the more you have already paid into your own health coverage for obesity. The extra cost serves as a small deterrent, but more importantly, it’s so much more affordable than covering its medical cost after your sick (or even paying the insurance premiums necessary to fully cover it). This dime affords you free health care for all obesity related treatments. It’s the most affordable ‘pay as you go’ insurance plan. It cost a dime.”
Part I:
The Problem – It’s a Crap Shot
Shopping for the ‘Best Plan’ is a Crap Shot
Compare ROOPA’s lifestyle approach to today’s other reforms efforts. Creating a health care program that covers all people, for all ailments, is proving too expensive. The alternative is not much better. Suggesting we ‘shop for the best plan’ is to ask us to guess every illness we and our loved ones will ever have in the decades to come. It’s a crap shot.
Many people simply make the wrong bet so we end up with all the nightmares of HMO’s. Most of today’s reforms are still working from this same health care model. The efficiency-savings being offered by today’s reforms are not large enough to make this model truly affordable. This is due to having the wrong working model rather than over-reaching in our goal for universal health care.
There is another option: We pay according to our own lifestyle preferences and consumption. The advantage is that this is both more affordable and people are happy to pay for things they enjoy doing rather than things they don’t use or need.
Part II:
Solution: Pricing Social Costs
Demo 1: Obesity
10 Cents Per Soda Covers All Obesity Related Care
Obesity and smoking offer good examples. The ‘social cost’ of obesity averages around $150 billion a year. Let’s say this comes to about 10 cents per item (of junk food) . Every soda pop, hamburger and candy bar will now have this 10 cent premium. (Pricing likely based upon number of calories).
The more soda you drink, the more you have already paid into your own health coverage for obesity. The extra cost serves as a small deterrent, but more importantly, it’s so much more affordable than covering this medical cost after your sick (or even paying the insurance premiums necessary to fully cover it).
The dime affords you free health care for all your obesity related treatments. It’s the most affordable ‘pay as you go’ insurance plan. It only costs 10 cents.
Taxes vs Insurance: Market Based vs. DC
This 10 cents is NOT a ‘new tax.’ It’s much different than the Democrat’s (suggested) 4 cent tax on’ junk food.’ Taxes are set by Washington and so generally fail to accurately price the actual social cost. They either charge too much (cigarettes) or too little (junk food). Even worse, adjusting either of these imbalances is nearly impossible to change in Washington once the premium has been set by them. In contrast, insurance premiums rise and fall according to related social cost of a specific product or activity. So as companies find new ways to reduce obesity, the premiums will fall right alongside it: a tax refund.
Insurance: Market Based Social Cost
Auto insurance provides us the working model. You drive, you pay auto insurance. You don’t drive, no auto premiums. You get 3 speeding tickets, you pay higher premiums. No tickets, lower premium. A more expensive car, by a younger driver, has a higher premium. A less expensive car, by an older driver, has a much lower premium. Auto insurance is a market based approach to a lifestyles social cost. It prices-in all the different risks and savings of our habits & choices and passes them on to the user – without gov’t tempering. The difference with ROOPA is that you can now do this with your taxes & insurance premiums as well.
Budget Lock Box
Another big advantage: gov’t can raid these funds. If the local, state and federal gov’t all go bankrupt today, drivers still have ALL their benefits. Their auto insurance funds are not raided by gov’t - no matter the ‘emergency.’ Insurance is a lockbox against government ‘discretion’ (extortion).
Contrast this against all of today’s program cuts to school budgets, health care services, infrastructure development, etc. As gov’t budgets collapse, so do each of these programs. The lack of budgetary independence is destroying these programs. ROOPA finances these programs by simply allowing the users to fund these things directly. They will be free of gov’t siphoning and politics and the roller coaster of the economic times.
Part III:
$4 Trillion in Savings
Demo 2: Smoking
Current Tobacco Policy:
Over Charged, Underfunded
In the case of tobacco, cigarette taxes can run double that of smoking related social cost. ($9.25 per pack in NY vs. the $5 in social cost.) Tobacco taxes are used for everything from Hawaii’s ‘Rainy Day Fund’ and public transport, to CA’s children’s health care and Special Education programs. And yet, little ever goes to smoker’s health care.
Smokers are instead charged additional health insurance premium but too little to cover their actual medical cost. This leaves service providers cannibalizing resources from other healthcare programs to treat smokers. This degrades both these other health care services as well as those for smokers. This extra cost now carries over into state and employee programs that cover smoking related illness. This adds in a greater burden to gov’t programs requiring still more premiums to our taxes & insurance policies. This is just one of many examples to the kinds of budgeting missteps of today’s budget sharing process.
It’s obviously more cost effective to simply use smokers ‘taxes’ to cover their own health care rather than today’s process of cannibalized budgeting. Let the gov’t cover the other programs from their general tax revenue while smokers cover their own. It’s supposed to be the same price difference anyway but with a much cleaner budgeting and accountability process.
ROOPA: Better Service for 50% Less
ROOPA’s Proposal:
Tobacco generates up to a $100 billion a year between tax and insurance premiums. ROOPA’s position: All of this should be dedicated to smoker’s health care – EXCLUSIVELY. This would create a $1 trillion industry over the next decade. The buying power would yield incredible savings while the massive market potential would attract a flood of new technologies, service providers, pharmaceutical & technological research along with other products for the next generation of cutting edge breakthrough. A 5% annual savings reduction would lower cost by whooping 50% within the next decade. As these costs drop, so will tobacco’s taxes = insurance premiums. These incentives will redirect the tobacco industry to gear their efforts towards reducing the social costs of smoking rather than loop holes to gov’t regulation.
This coverage would include ALL smokers, not just the healthy ones. In such a system, the sickest will find coverage based upon the nature of their ailments (ex: smoking, drinking etc) rather than today’s system for cherry-picking the healthiest and leaving the rest to the public dole.
This gives us ‘FREE’ health care for all smoking related illnesses as we saw of our example for obesity related care (in the example above). You smoke once (or a thousand times), your covered. This approach allows us ‘free’ healthcare for a range of ailments from smoking and obesity, to AIDS or drug and alcohol abuse. People can now go about their own lifestyle prerogatives knowing their tax and insurance premiums go directly for their own care. Meanwhile, the rest of us are spared these costs. Gov’t no longer decides how much is spent on these programs, nor can they siphon off ‘extra’ funds.
For a final bonus, this approach squares-off the tobacco juggernaut against the insurance & pharmaceutical companies rather than leaving all three of these industry titans lobbying gov’t who is so prone to the corruption of money. It is a simply solution to special interest corruption of our political system.
Smoking & Obesity: $4 Trillion in Savings
The combined social cost for smoking and obesity comes to a startling $350 billion a year in health care obligations. ROOPA can now remove this financial burden from both gov’t budgets and our general insurance premiums. This alone would reduce our general premiums by an impressive 13%. We will have removed nearly $4 trillion worth of claims from our tax and health insurance premiums over the next decade while upgrading health care services. This is before adding in the savings realized from the new found program efficiencies and service up-grades.
Our initial estimates suggest we can reduce today’s tax and insurance burdens by as much as 50% once we have introduced this system for other lifestyle activities as well. ROOPA culminates into the Republican’s ‘Flat Tax’ proposal wherein taxes and insurance premiums have been reduced by half. This is now supplemented with the Democrats ‘Vice Tax’ which makes up the budgetary short fall otherwise needed for all these lifestyle extras. ROOPA incorporates the best of both parties for a new world that now combines the best of them into the next generation of economic policy.
The Book: Social Cost: The Magic Bullet to Health Care Reform
These are some of the issues covered in our ROOPA book: Social Cost: The Magic Bullet to Health Care Reform. The stats were provided by Guerrilla Economics who also helped to develop the concepts. We are happy to hear your own thoughts on all this new approach to our social economic issues. If you like the general concept here, happy to provide you a more formal presentation or answer any questions.
Yours Sincerely,
Raghu
Go to lulu.com and search under
Raghu aka John Giuffre Research by Guerrilla Economics
Or
Tinyurl.com/roopabook
The website is roopa.org (needs to be upgraded which we hope to have completed shortly).
