Healthcare Revisited – Summary of Preceding Several Weeks’ Posts
Medicare for all is an interesting idea, but I’m not certain it will be as effective overall when compared to some of the other “proven” systems. It will almost immediately reduce some administrative and “profit” factors, but this will only have a small impact on costs. Baselining is the idea of not re-inventing the wheel and makes common sense. By evaluating several effective systems, it allows us to choose the very best aspects of each. In addition to evaluating the systems “process” it will be important to understand how savings can be achieved within each individual component that contributes to costs.
Regardless of which system is chosen (or designed), we will improve our quality of care.
Currently, we have several “special” interests that are making big money from our current system. They will not go along with any system that threatens their activity and profits. They are Insurance companies, drug companies, the legal profession, physicians, and hospitals. Achieving pricing equity even close to the five baseline countries will negatively impact significant industries. For this reason, any new system should include a “phase-in” period which would allow these industries to adjust.
Why do I say that this topic is by far the most important issue facing us today?
“As of 2019, the per capita cost of healthcare in the US has exceeded $11,000 for every adult, child & infant. Our per capita cost is almost three times the average of the EU Countries and more than what is required for a family to provide for other essentials. Nationwide we are spending almost $3.5 trillion a year on healthcare.
If a family of four had to pay their share of this cost, they would be facing almost $44,000. Allowing for reasonable funds to provide for basic housing, food, transportation, clothing, repairs & maintenance, insurance & a modest contingency fund it is evident that anything less than a family income of $75,000 per annum will require some form of subsidy just to cover the basics.
Currently, about 1/3 of the cost is being funded by the government in the form of Medicare & Medicaid. Another 1/3 (or slightly more) is funded through company healthcare plans, and the remainder is paid by citizens in the form of premiums, deductibles, and co-pays. From a company point of view, this high cost to them reduces the funds available for wage compensation.”
Our healthcare system and special interest involvement imposes a heavy tax on the public in 2 ways. First, it causes Government funding for both Medicare and Medicaid to be at least $500 billion more than it should. Next, it results in insurance premiums, both for employers and private payers, to be at least 1 trillion dollars higher than they could be. Of the $3.5 trillion that is paid out annually at least $1.5 trillion of it goes into the coffers of special interests.
“Families on private health plans pay an average annual premium of $4,968 or $414 per month. The average deductible and co-pays for these plans is $ $3,879”. Source: https://brandongaille.com/average-cost-private-health-insurance-per-month/
Between the premiums, the deductibles and copays the average family will pay almost $9, 000 per year for health insurance, and this does not include the amounts that are being provided by companies or being subsidized by the government. This regressive healthcare tax is a heavy burden on the middle class. Employers are also facing the decision to pay higher wages or continue to fund escalating insurance prices. In many cases, employers are forced to hold increases on wage levels and increase employee funding participation in insurance plans.
Assuming that we can change our system and eliminate the current $1.5 trillion in tax, the next question is how to distribute the savings. $500 billion will occur through a reduction in the current level of Medicare and Medicaid spending. The remaining $1 trillion should provide employers and private pay individuals with a reduction or elimination of premiums. That amount would add an average of $6,300 to every wage worker annually if distributed equally.
This one issue has the potential to reduce the national budget deficit to an acceptable level and at the same time, increase the average wage for the middle class.
One final comment. While the actual amount of medically related bankruptcies is in dispute, there is no doubt that it comprises a significant portion of all bankruptcy events.