The Bills beat the Bucks.

I promised a few days ago that I would be coming up with a comprehensive post on why a national health care plan that covers 100% of the population would be an improvement over what we have now. I wanted to wait until I had some facts in order. Well, the facts are now in order.

What we have now is a system where about 46 million Americans (a number which in itself represents a 10% increase over what it was just four years ago) lack insurance. This doesn't mean that none of them get sick, or that they don't eventually end up in emergency rooms or elsewhere in the system. What it means is that when they can't pay, the health care providers (hospitals or doctors) make up the loss by charging more for the rest of us. That is why even the pro-employer institute, National Business Group on Health acknowledges that the costs of health care, up 50% in the past five years, has become an unmanageable burden on employers who provide it. So not providing health insurance to so many people ultimately does not save you, if you are one of those lucky enough to have insurance, a dime; it instead only makes you pay it through your employee health insurance, while also hurting your employer.

Moreover, this is squarely hitting the middle class. The poor are largely covered by Medicaid, and when they are not, well there is an old saying that you can't get blood out of a turnip, and one way or another the cost of treating them gets shifted to people who do have insurance, as described in the paragraph above. The wealthy probably have insurance, or maybe they don't, but either way are not paying much more for healthcare than the middle class in actual dollars. In percentages, it is a lot less. Now, overall, health care was costing the U.S. 15.3% of our Gross Domestic Product in 2003 (source: Pear, R. "U.S. Health Care Spending Reaches All-Time High: 15% of GDP." The New York Times, 9 January 2004,) although it is likely higher now, and is projected to continue its double digit annual rate of growth for the foreseeable future if nothing is done.

Now, let's sit back and calmly look at the costs of the present system for the average family (median household income $44,473). The combined cost of healthcare premiums (whether paid by the wage earners in the family or their employers) in 2006 will be $14,500 ( Simmons, H. E. and M. A. Goldberg. Charting the Cost of Inaction. National Coalition on Health Care, May 2003.); this is up significantly from 2004, when we find a combined cost of $12,611 (The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $9,950, or $829 a month in 2004. Workers contributed $2,661, or 10 percent more than they spent in 2003.-- source: The Henry J. Kaiser Family Foundation. Employee Health Benefits: 2004 Annual Survey. 2004. 09 September 2004. ) I know that right now, my employer and I combine for about $1250 per month in medical and dental premiums. My employer pays premiums for me and I pay them for my wife and kids. Of course, what my employer pays might as well be money that I pay since if they didn't have to pay it, then they could pay me the same amount of money.

Now, in addition to these, all of the insurers require the payment of deductibles and co-pays. Even if everyone in our average family stays well (a big if) over the course of a year, these things add up. If we assume, say, a total of ten doctor visits per year for the whole family (assume a $10 co-pay), resulting in ten prescriptions (these vary wildly but an average of $20 each is probably reasonable-- in our family prescriptions varied from $4.63 to over $100 this year-- and all told they totaled well over $1000), and a $200 per person deductible for a family of four, we get $100 in co-pays, $200 in prescriptions, and $800 for deductibles, and probably about 20% if you have any ER visits-- if we assume one, this is likely to be a couple of hundred dollars (your share). That adds up to $1300 Not bad, and much less than our own family medical bills last year, but this assumes a very optimistic scenario. If, on the other hand, something catastrophic happens (and people do have accidents when they least expect them) and you have an insurer that like most charges you, say, 20% of the bill, you could easily end up (as we did last year) with thousands of dollars in bills.

Now, conservatives will say, that at least we don't pay taxes for medical care. Ah, but we do. We pay taxes for Medicare and Medicaid. And those go to pay for two relatively higher risk groups, who would be included in any national health care system (thereby allowing both programs to be eliminated in the process). Fiscal 2005 expenditures on the two programs were over $600 billion. I couldn't find a line by line analysis of the President's newest budget proposal (if anyone gives me one I will link it here), but if we assume that the figure for the two programs is very near this, and then consider the President's budget proposal of $2.77 trillion out today, the programs together represent 21.6% of the budget. I found the average U.S. income tax bill from the website of a Republican congressman. It is $9,445. This means that if we multiply the two figures together, our average family pays just over $2,000 for medicare and medicaid.

But that is not all. Between car insurance and homeowners insurance, Americans have to pay additional premiums (I'll estimate this at $50 per month, or $600 per year) for additional medical coverage to cover the cost of medical care for someone who you might accidentally hit with your car, or who your dog bites, even if you are a very safe driver and you don't own a dog.

Now, let's add this up:

$12,611 + $1300 + $2000 + $600 = $16,511 (I am being generous here and using the 2003 figure instead of the projected 2006 figure for premiums; if I use the later figure then we are well over $18,000. Now, divide $16,511 by our "income" of $54423 ($44473 + $9950 since your employer could include in your paycheck what they are now paying in premiums) to get that health care is costing our average family: 30.3%. And this still doesn't include the higher costs you pay because of other businesses who have to charge more for their product in order to foot the bill for health care costs for their employees (for example, if you buy a Ford or GM car, over $1000 of the cost goes directly to pay for health care insurance, which for example, Toyota doesn't have to pay. I blogged on that when when GM announced layoffs and again when Ford announced layoffs.)

Why did I use averages so much? Because an average is a middle. Some are more, some are less. Conservatives can claim that some middle class people pay less than this. That is true. But some also pay more. I know that given our own household structure and expenses, our health care costs this year were more than this. I could use our own situation to model it, but that would be anecdotal, while the averages are statistical.

Now, if we had national health care what would it cost? Well, despite our spending over 15% of our GDP on it, if you read the NYT article referenced above, you will find that other countries were much more successful:

Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.

Of course in those countries, healthcare providers (including pharmaceutical companies) have to negotiate their prices (and they make a profit, or they wouldn't operate there) instead of jacking them up to 'sky is the limit' levels as they can and do here.

But let's even assume that we remain at 15% of our GDP. Isn't this a lot cheaper than the 30% you pay now? And I will even give conservatives a bone: Canada mostly finances their system with a 7% national retail sales tax. Now, I don't in general like NRST, since it is a very regressive tax, especially as some Republicans propose to use it to replace the graduated income tax. However, if this was what I needed to quit paying 30% for health care, that would be a good trade off.

And quality? Conservatives are always pointing out how much better our system is. Well, for starters, that isn't true. Check the numbers yourself on the most fundamental measure that there is to consider how good the health care system is, the ultimate 'bottom line:' the people in the countries I mentioned earlier live longer than we do. (if you're looking for the United States, you'll have to scroll all the way down to #48 on the list, just barely above Cuba.) Waiting lines? A problem in Canada, agreed. But then I had a friend who lived here in the U.S. who needed 'immediate' knee replacement surgery, and had to wait six months for it. And not even such a big problem in some other countries.

Further, conservatives fall into the trap of assuming that single payor (as in the Canadian system) is the only type of national health care system that there is. But that is not true. I have a friend from Australia, and she explained that there they have a two tier system-- the government can and will cover everyone, no questions asked, but they do have a private system complete with insurance companies and if you don't want to wait your turn in the government system, then you can hire a private doctor to treat you more quickly. And some people do. But there, as in Canada or in the United States, the system is prioritized. If you enter the ER during a heart attack, no one will tell you to take a number or make an appointment. You will be treated immediately.

Just that in the United States, unlike Canada or Australia, if you had one heart attack, then be sure you stay calm and take an aspirin before you open the bill from the hospital, or you may have another one.