Alabama, instead of going for a trickle-down economy, has settled on a suck–the-poor-dry scheme. We have the lowest overall state taxes but the highest income tax on the poor. While trying to run our state on the backs of the poor and charitable donations from other states through federal funds, we have also cut money to the essential services that keep the poor afloat enough to continue slaving at their low-paying jobs.
So now, our Governor says, the well is running dry. Is it because we have sucked all the water out of an already thirsty ground? Is it because corporations, many based out of state or even out of country, are hoarding that water in their big tanks? No, he says! It is because of tornadoes.
Well, I’ll be. In the face of such drivel, one hardly knows how to respond.
Our Governor and Legislature have ruled out many potential solutions on principle. When principles conflict with reality, it’s time to check out those principles again.
They’ve said they absolutely will not raise taxes. Even a simple $1 a pack tax on cigarettes, which would bring our state tax on tobacco up to average, would net us an estimated 200 million a year. That’s the kind of tax they usually love, because it would again hit the poor harder than the rest of us. True, it could ultimately save poor smokers years of life and money if the tax helped encourage them to quit—oh, maybe that’s why they don’t want it. Without poor people, whatever would those deserving tobacco companies do?
We could, without raising taxes, end the so-called “incentives” and tax breaks we spend to bring business into the state—especially the ones that pay our workers minimally, provide little or no health insurance, use the labor to create profit for themselves, and return nothing to our state. Maybe the movie corporations will use our labor and money to film us in our falling-down shacks.
I’ve had a dream for years that when things finally got bad enough, even the most conservative states would have a moment of epiphany—they would say “Oh! You know, if we had Medicare for All, we could balance our budgets!” Suddenly, they would find wonderful conservative reasons and manage to make it all look like their idea—fine by me.
I’ve looked at some of the numbers to see if I could get a rough ball-park idea of Alabama’s potential savings under Medicare for All. First, we appropriated about 1.3 billion dollars of state money to Medicaid in 2011. This was supplemented heavily with federal matching funds. For teacher health insurance, we allocated about 899 million dollars total. State employee health insurance (not including teachers) cost us about 359 million dollars.
If we replaced the teacher health insurance with Medicare for All, at an estimated employer matching (Alabama) cost of 4.75% of payroll, a rough estimate of the cost is 222 million for teachers—this is 25% of what we are paying now. (See this link for a description of Medicare for All funding sources). That’s a savings of 677 million off current teacher insurance. I can estimate this because the report lists average teacher salary. For the other state employees, those numbers are probably out there somewhere, but if I use a cost even as high as half the current private insurance (it is likely far less), Medicare for All’s cost to the state would be 180 million dollars.
So if we just take our 2011 Medicaid appropriations at 1.3 billion, our teacher insurance savings of 677 million, and our underestimated state employee savings of 180 million, we have a savings of 2.15 billion dollars. That’s still an underestimate, because we should remove the current Medicare employer tax, much of the Department of Mental Health expense, the state contribution to All Kids, and some of public health.
Two billion dollars at a minimum. Read that again—TWO BILLION DOLLARS. Woo-hoo!! We’re in the money! How many tornado shelters would that buy?
I am not including some peripheral savings that might add up to a lot more. For instance, I know many people on disability who applied ONLY to get health insurance. But many want to work—they want to feel part of things and contribute. How many might be able to do just that (and pay state taxes) without the fear of un-insurance hanging over them? The disability money is federal, but the regained productivity and associated taxes would benefit our state.
We could save money we are now spending to regulate health insurers. And we would remove the number one cause of bankruptcy and foreclosure—health care costs.
Now, doesn’t that sound like a plan? First fix our current taxes to get ourselves out of the immediate hole, and then advocate Medicare for All?
Here’s the problem, though. The people in charge are impervious to evidence and reason. It will not matter how much money we show them. They will just keep pushing non-solutions like selling off our cost-effective Medicaid to out-of-state swindlers (yes, it’s on the horizon again), making it easier to carry guns everywhere, chasing immigrants around and torturing women who try to get abortions. A friend told me if it doesn’t have GGIA in it—God, Guns, Immigration and Abortion—our legislators aren’t interested. I think he’s right.
If we could prove to our Governor and Legislature that in 2 months, without raising taxes or removing tax breaks, we would have a massive earthquake and all of Alabama would fall into the ocean, even they believed us beyond a shadow of a doubt, here’s what would happen. They would shrug their shoulders. They would say it must be because of abortions, gun control, Mexicans or God’s will. They might even jump into the sea themselves before they would admit they were wrong.
Alabama, listen up. The well is dry. We cannot afford these people we have voted upon ourselves.
Follow along in this report and tell me if I’m wrong.
Page 18 History of employer cost for teachers’ and state employees’ health insurance (“employer” here is the state of Alabama)
899 million for PEEHIP (teachers) and 359 million for SEHIP (other state employees)
Page 7, Estimated cost of a teacher unit: average salary for 2011, $ 46,914
4.75 % estimated employer (Alabama) contribution for Medicare for All– 46,914 X 0.0475 = $2228 per teacher
To estimate the total cost of Medicare for All employer contribution, I used the PEEHIP cost of 9024 per teacher, divided by the 899,261,904 total PEEHIP employer cost, which should be proportional to 2228 per teacher divided by the total Medicare for All employer cost. This is 222,025,213.
222 million is about 25% of 899 million.
I underestimated the other employee Medicare for All cost at 50% of current employer cost to be safe—180 million.
See Medicaid Appropriations on page 68. Notice how little we contribute from state funds, versus Federal and Local.
Other sad stuff in this report—look at the Rainy Day money, the absent COLA for teachers, the absent funding of teacher supplies. Look at how much we are sustained by federal money, overall.