Wednesday, February 27, 2019

My Health Care Is Too Expensive!

(first published in North State Journal 2/27/19)

One of the most interesting things about health care debates is how everyone believes they are “paying too much for health care!”

In reality, 98% of all Americans pay far less than the full actuarial cost of health care for them and their families. The only people who pay the full amount are 7.5 million self-employed who do not benefit from any subsidy on the ACA exchanges and who pay for their individual health plans straight-up every month.

Everyone else has their health care subsidized by someone else, be it their employer that pays 82% of employee health care costs on average each month or the taxpayer who pays 100% of Medicaid for poor citizens at the state and federal level; at least 85% of all Medicare costs for senior citizens and whatever subsidy is available for ACA-eligible applicants.

The wonder is how no one outside of the individual market seems to know how lucky they are when it comes to paying for health care in America.

The attached chart is a very simplified comparison of what Americans enrolled in different plans pay each month for their health care. It does not take into account the myriad of options of coverage or the vast differential in deductibles or co-payments each person has to pay before getting full reimbursement coverage.

74 million poor people pay zero for their health care coverage in Medicaid since they do not make enough to be able to pay for it in the first place.  State employees in North Carolina only recently started paying any monthly premiums at all in that $3.7 billion annual program that is paid by state tax dollars but now pay $50/month for full individual coverage.

The average employee of a company, university or large institution of any sort pays approximately $120/month for their share of health care premium cost coverage. 44 million seniors over age 65 on Medicare pay $135/month for basic Part B physician coverage (Medicare Advantage adds to that base) and receive Part A Hospital coverage for free essentially since those benefits are paid for by current payroll tax deductions from every wage-earner in America.

A federal employee pays $243/month for health care insurance despite internet memes that assert federal workers and Congressmen get “free health care for life!” which is false.

The only people in the American economy who pay the full freight of the actuarial average cost of health care of over $7000/person/year are the people who are self-employed or who work in small businesses that do not provide health care benefits.

They pay at least $600/month for an individual plan. Up to $2400/month in some cases for a couple.

When health care costs go up 5%, an employee of a large corporation might see an increase of $5 in withholding for their health care coverage in each monthly paycheck. $60 per year.

A person on an individual plan would see an increase of $360/year by comparison.

Most Americans have a pretty good deal when it comes to health care coverage. As long as “someone else” keeps paying for most of the monthly premium, that is.

If people were forced to pay 75% of the real cost of their insurance coverage, we would see a massive revolution in how health care is delivered and paid for overnight.

The future unpaid-for liability of close to $100 trillion for all entitlements is enough to bankrupt America. Add in $33 billion in unfunded liability for the North Carolina state retiree health plan and it becomes pretty evident that we have a ticking time bomb on our hands that we, the living generation, have to fix before handing it off to our children and grandchildren.

Moving away from “other people paying for my health insurance coverage” to a more patient-based system is one step towards forcing discipline in the health care industry.

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