National Health Care Ideas - A Financial perspective
At lunch today we talked about the ideas being floated around about universal heath coverage being talked about by President Obama - and others.
Now all of them are talking about "reform" - which from what I have experienced usually means more expenses for most tax payers.
Let's run some numbers:
There are roughly 315 million people in the USA.
At any given time 50% of the population are below 18 - thus they don't count as taxpayers and legally are not responsible for themselves - thus moneywise they contribute an insignificant amount of money in taxes - earned income credit etc almost always refunds back all their income tax (Social Security exempt of course).
That removes 126 million people leaving 189 million payers.
At any given time 25% of the population falls within the retired social security / Medicaid / Medicare groups - thus wiping out 78 million people who could support a national system - both by law which dictates they fall into that system and if not they would be eliminated by their low fixed retirement income which would put them within 2x or 3x of being at the poverty level (see below) (no, I am not trying to double count them like Congress does when they do their accounting.)
That leaves 111 million people to pay.
All progressive ideas of "fairness" now come into play: poverty level, close to poverty level single parents, head of household etc all end up getting exempted from having to pay since they earn so little and that then wipes out 40% of the remaining possible payers into the health system leaving only 67 million people to pay for themselves AND the other 248 million people that would be in a NATIONAL system.
Since the average cost a month for a family of 4 in private insurance is (low end) around $200 a month per person - that means each person working would have to support themselves AND 5 other people in order for everyone to be covered! Each working person would have to pay $1000 a month to have a national health program FULLY funded.
Now of course the scaling would likely work out that starting a 3x poverty level each person starts to pay so that at 5x poverty you pay fully for yourself each month and at 6x you pay for yourself and someone else, 7x you and two other people scale up to likely a cap that at $500,000+ a year you pay for yourself and 10 other people. (so you pay $2,000 a month in health benefits to support yourself and 9 other people who earn less than you do.)
And of course everyone gets the same medical benefits.
Now if you have a DUAL system where private insurance (actually it more like heath benefits, you don't just occasionally use it, they want people to use it all the time) then if you wipe out the people who already have private insurance and do not have to pay into the system then you have around 20 million people supporting 248 million people and the price per month goes WAY UP. So the only way to have it is to force EVERONE to pay into the system - and why pay twice when you only get one benefit? That is what would kill large scale private insurance as we know it today - it would become supplemental and only the 10x poverty level people could afford to pay another insurance premium above what the government would take to have private insurance / doctors etc to visit if they need to.
After all, that is what having a fare (benefit) system is all about - but no one wants to talk about the payments required into the system of OTHER people to get that "fair" system.
posted by Tom Philo at 8:12 PM
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