By: Economic Policy Institute
Author: Edith Rasell
Published: October 21, 1998
Financed by: Economic Policy Institute
Legislation analyzed: none, plan analyzed developed by the authors.
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A publicly-funded, universal health care system is possible. However, to improve equity, new funding would be needed for the 24% of health expenditures that are current paid by funds from regressive sources. These replacement funds could be raised through an increase in the federal personal income tax, the most progressive way to fund health care. For the average, middle-income household, taxes would rise by $731. In other words, for fully 60% of households the increase would average less than $731. For another 20%, the increase would average about $1,600. Only the 20% of households with the highest incomes would face a larger tax increase. In exchange for the tax increase, premiums and out-of-pocket spending would be eliminated. Costs would be redistributed from the sick to the healthy, from the low- and middle-income households to those with higher-incomes, and from businesses currently providing healthcare benefits to those that do not.