(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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