Since people are paying into the system perpetually, there's no worries about where the money is coming from. Competition among the insurance companies would make healthcare affordable as the insurance companies would tailor plans that best meet that person's needs. And sales taxes are the least regressive of taxes.
Low-income people would stop buying plasma TVs and take-out dinners and buy their own insurance plans instead of relying on Medicaid. In fact, Medicaid should be abolished and those who are truly disabled or terminally ill could be mapped over into Medicare, which itself would be phased out over time.
Do you think 65+ year-old-olds, most of whom have pre-existing conditions, would get private insurance? There's too much risk in this group for it to be feasible.