Wednesday, April 11, 2012

Medicaid and Marginal Tax Rates

Suppose having medicaid is worth $300/month to a person making $17,000/year.  $300/month is $3,600/year,  if the person earns $1,000/year more he is $2,600 worse off.

So why not offer all Americans health insurance with a deductible based on their last years income as outlined here.  That would eliminate the this big problem and perhaps push people to better control medical expenses.

One argument against such a system is that it would leave people with too little money in years with high medical expenses but Here is a story about a guy lives a middle class life on $7,000/year.

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