So when we spend 27% of our GDP on healthcare, that’s magic money that doesn’t come out of our pockets. CEOs of medical companies are fronting our healthcare cost out of the goodness of their heart, I suppose?
I really don’t understand what you think is happening here. Who is playing that 27%, if not the common people? Where does that money come from, if it’s not the tax payers?
Republicans putting their hatred of Obama ahead of the common good, or even ahead of their own enlightened self interest? Hold the presses!
Also from your own link:
So – greedy insurance companies have been raising how much we have to pay for years. Instead of doing something about it, you’d rather whine about tax increases.
One point the video touches on is Americans’ attitude to taxes. People in, e.g. France, say they are happy to pay taxes because they want to treat healthcare as a human right. In the U.S., even liberals are reluctant to talk about tax hikes. Even if it is explained that $4000 of increased taxes will be offset by $5000 in reduced healthcare premiums, the “Taxes are bad” message will still resonate. (And for people with very high income, the tax hike will exceed premium reduction — that idea will infuriate right-wingers, even right-wingers nowhere near that high income.)
The video suggests that America try to change at the state level, rather than the federal level. That might be an excellent idea. However there are still two big obstacles unique to America:
(1) Vested interests like insurance companies add costs to American healthcare. But due to the “rent” collectors’ lobbying power, many reform proposals do not address these inefficiencies.
(2) Employers pay for much healthcare in the U.S. This creates a huge obstacle to reform. (Employees do not want to give up good health benefits their unions may have fought for.) This led directly to what seems an absurdity in one proposal: That employers currently paying for health will be subject to a tax that non-insuring employers are not subject to.
The “all taxes are bad taxes” attitude is very common indeed. I know a public school teacher who railed against a modest real estate tax increase meant to pay, very specifically, for a renovation at classes at her own school – including her own class, which was in a poor state that hampered her ability to properly teach, and which she constantly complained about. Why? Because she had a policy: she was against any and all tax increases.
(In a twisted way, I actually respect that. I mean, it’s bloody stupid – you can’t do your job because your classroom is a piece of crap, raising some money to fix it is a good idea – but at least she stuck to her guns even at personal cost, I guess).
It’s also an enormously stupid attitude. Shrugging and saying, “guess Americans are just rugged and free spirited. Yee-haw!” is destructive. And it’s not our entrepenurial frontier spirit that’s behind this belief; it’s an organized political movement, specially designed to fit that narrative, whose true purpose is to funnel resources into the pockets of those who use their already vast resources to rig the system in their own favor.
Also from the link -
Obama didn’t do anything about it. He said he would, but he was lying.
I am not whining about tax increases. I am pointing out that the tax increases under Obamacare (which Obama also lied about) did not do what he claimed they would. Now Warren and Sanders are claiming that they are going to increase taxes too, and that this time, it will do what Obama claimed they would.
If M4A passes and overall costs go down, I won’t whine in the slightest about tax increases. If Obamacare had actually reduced premiums by an average of $2,500 rather than see them rise by $4,400, I wouldn’t whine about that either. But we now know that Obama was lying. I am therefore disinclined to believe Warren, Sanders, et al., just because they say the same thing.
Regards,
Shodan
Do you want to address my point about the 27% of our GDP coming from somewhere? Do you agree that it is us common people who are paying the vast majority of that 27%, one way (through taxes) or another (through insurance premiums, higher costs and lower wages as employers have to pay for the insurance they provide, etc)?
If so, where do you think that the money is going? I have my theory, and I think it even explains why premiums didn’t go down like Obama promised. But I want to hear your thought, first.
Personal cost, my ass. The biggest cost there was borne by her students.
People complain about taxes everywhere. In Western Europe, those who complain about taxes more loudly appear to correlate with “people who haven’t paid a penny on income tax that they could hide”, but that makes sense: those of us who reckon that stuff such as “paying for public schools our inexistent children will not attend but our future caretakers may” makes sense, are by definition less likely to try and hide our income.
I can address this if you like, but it seems rather silly and/or irrelevant.
Assume your 27% is correct for the sake of discussion. The 27% is paid by two overlapping but not identical groups. The largest as of today is the taxpayer, since the federal and state governments spend somewhere over half of all that 27%. The other group is health care consumers. This is not the same as taxpayers - I pay Medicare taxes but do not receive Medicare, and I pay for Medicaid although I don’t use it. But I do pay for my private health insurance. And I pay more than I need to for my own health care, both in taxes (to cover Medicaid recipients who don’t pay taxes) and Medicare recipients, as well as in premiums for uninsured or underinsured health care recipients, charity care, etc. So, one way or other, taxpayers, and people with private insurance, are paying the whole 27%. (Actually, since we are running a deficit and since Medicare and Medicaid are two of the largest items in the government’s budget, some of it is going to be paid for by future taxpayers, but it’s taxpayers nonetheless).
All this is trivially true. So what?
Warren and Sanders and other Democrats are making two related claims.
[ol][li]Under various incarnations of M4A, all health care will be paid for by the taxpayer. Those taxpayers will still have to pay for those who don’t pay taxes, but that is the case now. But there will be no private insurance in the mix, so no higher premiums to cover the uninsured - that will all be covered by the taxes being paid.[/li][li]The other claim is that under M4A, the total amount by which taxes are increased will be less than the total amount of taxes + insurance premiums that we pay now. IOW we will be spending less than 27% in total.[/ol]It is this second claim about which I have my doubts.[/li]
If we implement M4A and we still spend 27%, we are no better off than we are now. If we implement M4A and spend more than 27%, we are worse off. It is only if we spend less than 27% that we will be better off, because then Warren’s promise that overall costs of taxes-only will be lower than taxes-plus-premiums.
So, no magic money involved.
My point about Obamacare was that Obama promised that if we implemented Obamacare, the average family would save $2,500 a year (i.e. their overall costs would go down - sound familiar?) and also “if you like your plan you can keep your plan” and some other lies. So we implemented Obamacare, and guess what - overall cost for the average family did not go down, and even if you liked your plan you couldn’t keep it, and health care costs went back to pretty much the same rate of increase that they had long before Obamacare was a gleam in anyone’s eye.
To reiterate - if it is really true that my taxes will go up by less than whatever my taxes plus my health insurance premiums amount to, I will not be doing any whining about tax increases. If they go up the same, or more, then I will not whine - I will point out “I told you so”.
Because I don’t believe that [list=A][li]Doctors and health care providers will accept being paid at Medicare rates, because currently they lose money on 65-80% of their Medicare patients, and []the reduced administrative costs of Medicare are partly not lower, but hidden, and in any case are nowhere nearly enough to allow doctors to make money, and []I do not believe for a split second that Warren can bring about her plan without raising taxes on the middle class and not just billionaires and employers.[/list]So that’s my response to your 27% point. [/li]
The only magic money I can see is the magic money we will get to pay for M4A by getting doctors to lose money, and administrative savings that don’t exist.
So yeah, it would be really peachy if my taxes went up by less than I pay now in premiums. The trouble is that Obama already pulled on one, and Warren wants to pull on the other one - the one with bells on it.
Regards,
Shodan
I’ll leave you guys too it, but I wanted to point out that it’s 17.8% of GDP, not 27%. I’ll also just point out that, on average, Americans pay about 6-7% of their actual take home pay towards healthcare. This is going to more heavily impact the poor and obviously be a lot less, as a percentage of their take home pay to the wealthier citizens.
Yep, you’re right, I don’t know where I got 27% from in those two posts. I had 19% (though your source looks better). Either way, it’s far more than the 9% average.
I’m interested in your 6-7% figure, though. Where is that from?
OK, great, so we are on the same page. You agree that it doesn’t matter if you’re paying through taxes or premiums, you’re still the one paying.
And actually, I realize – you’re right. Just having Medicare for All would not solve the problem.
What WOULD solve the problem is if, once Medicare was the only insurer around,it used its power to negotiate drug prices, like every other country in the world does.
I am also very interested to know how you have determined that administrative costs wouldn’t go down under a single payer system. It seems like the experts disagree with you – our multiple insurer system increases complexity greatly, leading to ballooning costs.
I’m not sure why you think doctors will lose money. After all, they wouldn’t have to pay the outrageous prices for drugs and supplies that they currently pay.
I mean, sure, a single payer system wouldn’t magically solve the problem. But it WOULD give us the ability to solve a lot of these problems.
I found the average Americans pay per year for healthcare in 2017 (which was about $3,414) and used that against the average salary. Not very precise, but I wasn’t that interested in really digging up the answer, as I didn’t really want to debate any of this. And there is a lot of variation here that’s hidden in the figures (averages generally do that). For one, some claim it’s more like 10% (and some claim it’s 15 or 20 or 30%), and everyone acknowledges that regardless, if doesn’t fall evenly, but varies depending on socioeconomic class. As a percentage of your income, if you are poor (but paying for insurance plus taxes) it’s going to be a LOT higher. If you make a lot of money, then it’s going to be a lot less as a percentage. Plus, depending on whether you are healthy or not is going to wildly affect the percentage…if you have a ton of co-pays, prescriptions and such it’s going to be a lot higher than someone who is healthy and doesn’t go much to the doctor and is just paying taxes and their premiums. But part of the answer as to who pays for healthcare is the employers, since they generally pay between 60-80% of costs per employee (for private insurance as well as taxes that go to the general fund, assuming they pay taxes)…when they pay for health care at all as a benefit.
It’s very complex where the money really comes from, which is why just looking at the percentage of GDP the US pays doesn’t tell you how it would work if we went to a single payer UHC funded through taxes…or why just comparing GDP amounts doesn’t really tell you everything about what US tax payers would be paying if we made the switch. In many countries it can be 14 or 15% of take home that goes towards the healthcare portion of their general tax…which is often higher as a percentage of take home than Americans currently pay on average.
OK, but that’s not really a fair way to look at it, because you end up bearing that cost regardless. For example, I accept the wages that my company offers me because they offer full healthcare benefits. Those benefits have value – if I were self employed, or owned a business (like my parents do), I would be paying for it myself. It looks like that’s worth around $397 a month for an individual, before any government subsidies. This actually happens to just about fit what I know from people who do purchase their own insurance. That’s $4,800 a year. And the market rate for wages for my position are based on the fact that employers include this pay; frankly, I would happily pay some portion of that in taxes and negotiate higher wages from my company in exchange for these savings. Until Obamacare, I would PAY TAXES on the value of this insurance plan. That’s money that my company is spending on me, but that doesn’t come to me. I worked for that money, though. I bear that cost.
I tried looking for that 3,414 amount and I wasn’t able to find anything like that. I saw that the average American paid about that much on insurance alone in 2018, around 5,000 total when you include the 1,500 dollars the average american paid out of pocket during that year. That article says that the average American’s health insurance costs $7,188 a year, with much of that paid by their employer (but they’ve still worked for and earned that money – or, if you prefer to think of it a different way, the employer passes the cost of that health insurance on to the consumer, and since we all consume we are all hit with the cost).
That’s another factor. Medical bankruptcy is a real issue. I won’t give a particular percentage because that’s notoriously hard to define, since medical debt could be only one factor that leads to bankruptcy. But there’s no denying that it is a very significant issue. The average cost doesn’t capture the fact that if you get a serious illness, your costs will skyrocket, you will become too sick to work and lose your job and therefore insurance, etc…
Regardless of cost, I don’t believe in a system that can lead to that outcome.
Prescription drugs are about 15% of total healthcare costs. (Not 20% as Klobuchar said, but close enough). That’s a significant portion. Certainly prescription drugs cost more in the US than most of the rest of the developed world, but it is not a straightforward “they’re ripping us off because they can” situation.
Regards,
Shodan
I believe Taiwan went from shoddy health insurance to a universal system pretty much overnight because they industrialized so fast. I don’t have a cite fot that, its just what I remember from a TV documentary about various health systems.
But I agree. National UHC doesn’t come from nothing normally. Usually there is a local UHC system or something like that that then becomes national.
True, but when you factor in tax credits for employers to buy insurance, the public sector already covers 71% of all medical expenses, at least in California.
In theory (heavy on the theory), if medicare for all has a 90% actuarial value, and it saves money then it wouldn’t cost that much in new taxes, we just roll that 71% in tax subsidies and tax credits into the M4A plan. But I’m pretty sure thats not true because every study on M4A finds public sector spending has to go up quite a bit.
Either way, M4A isn’t the only path to UHC. We could have a UHC system like the netherlands or Switzerland. Either could serve as a model for the US.
The big issue with US health care is how much it costs. We spend 2x as much but we don’t get better care, we just spend 2x as much (same way that an apartment in Manhattan costs more than one in Kansas city). That has to be fixed and neither political party has any interest in fixing it since it will infuriate the rich.
When Vermont looked into single payer, they predicted it would reduce medical costs by 25% over a decade vs keeping the current system. Sadly they didn’t enact it, but it could’ve proven a model for keeping medical costs in check.
Just to clear this one up, 27% was the number I could find for what percentage of the federal budget was health care. That was the number in the video for France that the narrator was sure we would be shocked by (12-15% of their budget) so I wanted to compare apples to apples.
I agree that percentage of GDP is a much better cost metric, and of course we pay way more than other OECD nation.
Cite for the budgetary number here: Expenditures in the United States federal budget - Wikipedia
That article you cite pretty much verifies they are charging us more because they can.
They discuss how R&D investments would go down if medical profits decline. That is true, but there are ways around it.
There is nothing stopping the public sector from increasing R&D spending via tax credits, investments in basic research, matching funds, etc. to make up for whatever shortfall there is in R&D.
Worldwide Pharma R&D was about 156 billion in 2016.
cost controls would make that number go down, but the public sector could step in to encourage more R&D. Medicare for all would save 400-500 billion a year to start, and that number would grow with time. I’m sure we could find an extra 10-20 billion in public funds to encourage more pharma R&D to make up for the decline.
OK, so I got back to this tonight… here are some quotes and my thoughts.
Well, since we already spend more than that… probably?
So do a number of localities in the US. Sugary drink tax - Wikipedia
Debatable. I’ve heard a number of reports that Canada’s are at least as strong. Willing to be persuaded on that. But again, anyone who’s followed Brexit and the talk about chlorinated chicken knows that US law is less strict than EU (and soon UK?) law.
I don’t believe this is true at all. I thought one of the regulations of Obamacare was community rating - that the only thing insurers can use in setting rates are: age, location, and tobacco use.
If he’s arguing that the primary reason American costs are higher is that we are unhealthier, I just don’t believe that is true. If he’s arguing that a public system would somehow compel us to use public policy to improve health through regulation… well, I guess. But I don’t think that’s really a critical part of the debate. We already have a very large incentive (Medicare costs) to improve end-of-life decision making (“death panels”) and we refuse to do it.
Clearly false. There have been many detailed plans laid out over the years, including funding mechanisms. Most recently Elizabeth Warren’s.
At the end he does get a few things right. I agree that the German model is probably the most politically viable and the most desirable. I think he papers over the idea that federal legislation wouldn’t be required to implement such a plan - clearly it would. But mandating and funding such a system at the federal level and letting states implement it (like, say, Medicare) isn’t a terrible idea. You just have to have the federal standards high enough to avoid free-riding and cost-shifting between states.