You are a member of a
presidential commission appointed to consider a mandatory national health
insurance plan, and the question of how to fund the plan is being discussed.
Specifically, three separate options are being considered to generate an
average of $4,000 per worker: a flat mandatory premium, a doubling of the
current 7.65% payroll tax that comes out of people’s pay to cover Social
Security and Medicare, and a 7% increase in income tax. Think about this from
the perspectives of three workers: one who makes $25,000 per year; one who
makes the same in salary but also has $1,000 in investment income; and one who
makes $85,000 per year, including $10,000 in investment income. Considering the
relative financial contributions it imposes on individuals such as these, which
of the three funding measures would you support and why?
What economic and
societal factors affect the demand and pricing of healthcare services in