I think the simplest way to fund universal health care is to use Social Security contributions. And, I suggest only one simple change - get rid of the limitation preventing assessments on income above $92,000. It wouldn’t take too many CEOs making a hundred million to cover each year’s universal health care costs.
The cap increases a little bit each year. It is currently under $110,000. Which is still regressive.
Take Warren Buffett, the richest man on Earth. His annual income is around $50 million a year. That means less than half of one percent of his annual income gets taxed. For the richest 5% who make more than $250,000 a year that means less than half of their income gets taxed. So the wealthy are getting perks while some waitress at I-Hop doing double-shifts is seeing 100% of her income taxed.
Social Security can be vastly improved by doing away with the cap.
As for Medicare, consider this piece by Dean Baker. He addresses Medicare, the Economy and the Health Care system:
Health Care as Stimulus: The Best Way to Spend Big Bucks
By Dean Baker
The need for large-scale stimulus is recognized by economists across the political spectrum… The drop in annual consumption spending is likely to be in the range of $300 billion to $400 billion.
A boost from the government is the only plausible way to replace this collapse in spending. Most economists place the size of the necessary boost in the range of $300 billion to $450 billion annually. Paul Krugman has argued that $600 billion is a more appropriate target…
The problem is that it is not easy for the government to find ways to usefully spend this much money. There are obvious ways in which the government can get money to help alleviate the impact of the downturn and increase spending such as extending unemployment insurance benefits and increasing food stamps. But additional spending in these areas will not likely exceed $30 billion.
It can probably spend another $60 billion a year on infrastructure projects, perhaps $50 billion aiding hard-hit state and local governments, and maybe $40 billion on green investment projects. This sums to $180 billion, a figure well short of even the $300-$450 billion stimulus range.
This is where health care comes in. Health care is a $2.4 trillion sector. It can reasonably be expanded by 5-10 percent in a relatively short period of time, which would imply an additional $120 billion to $240 billion in annual spending. The jobs created in this sector would provide a substantial boost to the economy.
More importantly, we could substantially extend coverage through a stimulus package, getting much closer to the goal of universal health care system. The quickest way to get there would be with a tax credit for employers who cover currently uninsured workers. Employers who already cover their workers can get a credit for increasing the generosity of their coverage. Generous credits should be sufficient to extent coverage to most uncovered workers.
At the same time, the government could open up the Medicare system, allowing all employers and individuals to buy into a Medicare-type plan that would compete with private insurers. This step, together with rules that limit abuses by private insurers, would be important in setting up a system that allows for cost containment over the long-run.
After two years the credits could be phased down to the earnings-based subsidies advocated by President Obama during his campaign. In the longer-term, steps could also be taken to fill the gaps to ensure that people still left behind get covered.