Who is going to pay for health insurance for those individuals who cannot afford it?

Great Debates
1

I could use some assistance on this one. I’m in the midst of having a discussion with someone who is rather upset about the upcoming changes coming about because of the Affordable Healthcare Act.

Her main complaint seems to be concern as to where the money will be coming from to pay the healthcare of individuals who can not afford to buy healthcare insurance.

Saying the federal government, while true, only leads to the next question… namely, where is the federal goverment going to get the money to pay for this, which leads to her stance that our taxes will be increasing. Basically, she is upset that she might have to pay more to provide healthcare to someone less fortunate than herself.

Is there any response I can give to her complaint? Isn’t the healthcare law supposed to pay for itself in some way? Is it possible healthcare costs will decrease and so will her taxes?

2

All I can give you is my personal experience.

Here in Indiana we have something called “The Healthy Indiana Plan” which provides subsidized health insurance for the working poor (that’s the short version, google the thing if you want all the details). Someone such as myself pays up to 5% of his/her monthly income towards a health insurance policy. The state (in this case, Indiana) pays the rest of the actual monthly cost of the policy. So yes, the money to pay the difference between 5% of my income and the actual cost comes from state taxes.

Does it save money? In some cases yes. For example, instead of my spouse’s diabetes being untreated and him needing to be hospitalized, going blind (it has affected his vision), suffering from unhealing wounds, and so forth up to and including dialysis, amputations, etc. he gets his daily medications without interruptions and regular appointments with a doctor. In his case his health has improved greatly - he’s lost weight and kept it off, he’s having fewer UTI’s, minor wounds are healing better, he gets vaccinations as needed to keep him healthy, and so forth.

The alternative is for him NOT to get proper care, then the money to pay for his hospitalization/dialysis/amputation/whatever comes from state taxes… but all of that is a damn sight more expensive than his current care. Either way state tax money is used to pay for medical care. There is no escaping it, short of truly leaving people to die in the gutter. So… if you must pay out of tax money which makes more sense, paying $6k a year to subsidize insurance/care or paying for a $30,000 amputation or $60,000-$120,000 a year for dialysis?

In my case it cost them - you see, I’m basically healthy so I went a few years without seeing a doctor. When I got insurance I had a bunch of things to catch up on, from vaccinations to getting regular check ups. It’s been acknowledged in this state that when someone goes from no insurance to insurance there’s usually a money-bump as they get “caught up” on the preventive stuff they’ve let slide. Arguably, it wouldn’t have hurt me to skep the doc these last few years but we only know that because we know I’m not having a problem. Without check ups stuff can get missed until it’s really expensive.

Going forward will subsidizing my medical care be money-saving in the long run? Damnifino - I do know I’m pretty happy with the current policy I have even if I can also list off some flaws with it as well. For darn sure I’m more likely to go see a doc for something minor-but-might-be-major rather than waiting until I’m positive it’s an actual emergency. So how do you prove a negative? Did going to see the doc for sniffles prevent pneumonia or not? How could you prove that? Is it really cost-effective for the state to subsidize an annual mammogram for me?

I, for one, think that in the long run society will save money by making sure people have access to medical care without being financially broken or having to wait until it’s life or death. I also think that that “money bump” when people first get insured is a real thing and opponents of Obamacare are going to seize on it.

3

This pie chart might help.

Is her insurance provided through employment? She then is having her purchase of insurance subsidized by having it paid out of pre-tax dollars. Why should anyone be doing that?

4

Q: Who is going to pay for health insurance for those individuals who cannot afford it?

A: Same as before: all of us… just shifted around more fairly.
Previously, those without insurance would wait until they were in horrible pain or deathly sick (at which point, their health care just go a lot more expensive than if they had access to preventive care). Then they would go to the emergency room (on their own, or even more expensively, by ambulance when they passed out). And then the hospital would treat them and the cost would be passed on to those who already had health insurance in the form of higher medical care bills which leads to insurance companies charging higher premiums.

By providing them accessible preventive care ‘for free’, their medical costs just went down. So, immediate savings. Then ‘Obamacare’ shifts the cost of their care from being the hospital’s burden (which is then passed on to the rest) to others: Mandating everyone who can afford it to buy into the system; lots of savings in managing costs in various places; making insurance companies spend at least 80% of income on actual health care rather than advertisements, bonuses, or dividends, and see the pie chart linked above.

5

Yes. Tell her that if she is upset about her taxes increasing by a few cents so that many thousands of people can have decent healthcare, then she is a disgusting excuse for a human being.

6

Under our current system (pre-ACA) it costs about $350 per person to cover the uninsured. That $350 comes in the form of higher insurance premiums, higher medical costs, higher taxes, etc.

http://www.factcheck.org/politics/obamas_health_care_claims.html

I have no idea how much it will cost to subsidize under the ACA, nor how much people would save if everyone were uninsured (I can’t say with any real validity that it’ll reduce the cost of every individual by $350 exactly). But part of it will come from the savings that that reform causes.

7

Try this, as things stood before, US tax payers were paying entire health care costs for any uninsured person who lands in an ER. Pretty hefty expenses, yes?

Under the new plan, US taxpayers subsidize the insurance premiums for the poorest. Covering someones insurance expenses is far less expensive than covering their hospital bills.

It ought to be self evident really, but the Right has done much to muddy the waters unfortunately.

So it is much cheaper to cover someone’s insurance costs than their actual hospital bills, multiply by hundreds, or thousands and it becomes pretty clear why it’s a better deal for the US taxpayer.

8

Before the AFA, someone who didn’t have health insurance would often go to the emergency room for treatment which is a very expensive and very inefficient way to get medical treatment. If that person could not pay the huge emergency room bill, the cost was passed on to the taxpayers. So you had American tax payers subsidizing people’s healthcare, but the people were getting really inefficient health care at very expensive prices.

9

So the cost is going to be reduced from $350.00 to a few cents?

10

No, the cost to fund all this works out to just a few cents per paycheck because it’s spread out across the entire country. We’re splitting the cost about 300 million ways rather than making fewer people pay more as individuals.

11

I’d be extremely doubtful that it will be just a ‘few cents’. However, I’d be confident that it’s less than $350 per capita.

12

In theory this sounds perfectly reasonable. In reality, when looking at other countries with government run healthcare, over time you get a more expensive and less efficient system. Not just healthcare, mind you, but pretty much any government run system. I just wish we (me included) could be persuaded to take care of our neighbors without nanny state involvement. That is the real answer.

13

No, but if it’s already costing $350 per person to cover the uninsured for the least cost-effective care, taxes shouldn’t increase much to subsidize insurance for those who can’t afford it. Remember, that $350 also includes people who could afford insurance ,chose not to buy it , and then needed care that they *couldn’t *afford. Those people will have have to buy insurance, which may be a significant increase in cost to them , but that won’t affect the OP’s friend, who apparently already has insurance. Her total cost might actually be lowered a bit - the cost of care for the uninsured is not only paid through taxes but also through higher prices for care and therefore higher premiums.

14

Moderator Note

njtt, comments of this kind are out of place in General Questions. No warning issued, but let’s refrain in the future.

Colibri
General Questions Moderator

15

This is probably better suited to Great Debates than GQ.

Colibri
General Questions Moderator

16

Why do you think aspirin cost $50 and tongue depressors are $20 each on your hospital bill? Because the hospital has to make up the cost of those who can’t pay, by passing costs on to the rest.

Obamacare first forces the young and healthy to buy insurance. These new customers add money to the system that instead would have been spent on beer and pizza (i.e. lifestyle). So there’s some new money there.

As others mention, by allowing basic care (doctor visits, etc.) people who otherwise would not have insurance will now get care before it becomes a full-blown crisis. This saves the whole system a lot of money.

The basic system in most other countries is based on common decency - we provide welfare so even the worst off on’t freeze and starve in the dark; similarly, we address their medical issues.

However, be under no illusions: this is how it works. Your tax dollars cover medical costs. There are only a few ways to cut costs-
Reduce the pay to doctors. Until they go on strike…
Reduce the amount paid to insurance companies for paperwork and overhead.
Ration the procedures (“waiting lists”).

The history of medicare in Canada has been a see-saw between cutting costs and dumping money in to address the shortcomings of a starved system. Doctors make a lot less than the USA - but they have a much simplified billing system, they don’t spend time arguing with a plethora of different HMO’s and insurance providers, and there is one set of rules.

Despite denials that rations exist, for things like hip replacements and knee replacements (and even chemotherapy) you can go on a waiting list.

The main thing is - if it gets to teh point where there is one big system - medicare - covering everyone, then yes her taxes will go up; but the amount you pay in taxes will be about to equal what you currently pay for an employer health care system.

The USA had the luxury of paying for Interstates, a big military with a lot of fancy weaponry, and lots of other expensive government spending where in the rest of the first world, government spends that tax money on health care and universities.

So I’m betting soon the military will feel the pinch of the health care crisis.

17

Even as a conservative I have to admit that we are years behind on healthcare for the poor in this country. I don’t mind e few extra taxes to cover this at all. I do wish that the healthcare providers would clean up their acts. Over billing and over charging is rampid. People in this country are being held hostage byt the healthcare industry, I have no idea who is getting all the money, I am always hearing about hospitals loosing money etc.

18

Really? because the NHS costs less per capita and covers 100% of the population. Even if you want to jump queues and pay extra for private healthcare on top of the NHS is costs you pay less than the typical USA citizen pays. In what way is that “more expensive” or “less efficient”

I just hope you aren’t being slippery with the term “government run” as many UHC systems are something of a halfway house.

Which countries are you using to come to your “more expensive” conclusion?

19

That would be great- but it will never happen, because as a society we have a bit of a split personality. We don’t want to be forced to buy something ( health insurance , fire protection , flood insurance, and I’m sure any number of other things) but when people face those misfortunes without having bought the insurance or fire protection we are not so willing to leave them to deal with it on their own or with the assistance of people who volunteer their help. We want the government to get involved or the hospital to provide free care or the volunteer/other city’s fire department to save the property of people who wouldn’t buy insurance or pay the fee. Which only encourages free riders- some of those young and healthy people who don’t have health insurance because “they don’t need it” would probably have it if they would otherwise be denied care they couldn’t pay for.

20

Europe has UHC; U.S.A. does not. It almost sounds like you attribute that to a greater sense of charity in the U.S.!

Want to buy a bridge?