US Healthcare – vs Health Insurance

An interesting query/comment was put before me today that sparked the need for a blog – Healthcare vs Health Insurance – as a mandate. How could a basic coverage plan work and still be fair?  

  1. Basic coverage would exclude prescriptions, cosmetic procedures, dental, vision, and ambulance services. Long term care would also not be covered.
  2. Individuals making less than a specified amount, lets say $50,000 per year, would pay into the system a percentage of their gross income. All others would pay a progressive flat fee with a cap. Tiers for family’s would be progressive up to a maximum of two children per couple. All couple’s with more than two children would pay a flat fee for each successive child.
  3. Insurance company’s would no longer be the middleman unless someone wanted supplemental insurance coverage through an independent private insurance company.
  4. In order to access coverage an insurance card would be issued to each individual including children, with a picture updated annually.
  5. Medicaid and all forms within that conversation would be eliminated.
  6. Servicemen would be covered with the military picking up the cost 100% for any member earning below a threshold – say $50,000.
  7. The VA would be eliminated.
  8. Congress would NOT vote on the proposal, instead a vote would be made by all legal taxpayers, their status verified via a comparable analysis of Social Security numbers within the IRS computer system.
  9. In order to make this work over the long haul, the entire government pension system would be – eliminated. This would be voted on by taxpayers, not Congress.
  10. The government would fix the value of services.
  11. The cost of prescription drugs would be tied to a global mean amount so that US citizens are no longer subsidizing the world’s cost.
  12. Medicare would remain intact.

Currently, the federal government spends $1.1 trillion for healthcare, $583 billion for Medicare over receipts, and $430 billion for all other healthcare. Individuals cough up an additional $2.4 trillion per year. Of course this includes the average annual expenditure of Hollywoodites requiring $500k of plastic surgery per year, so the number has some skew room.

It is estimated that the US spends about $12,000 per year for each person on healthcare. That is double the next developed countries output.   That would indicate that the US spending could be cut in half from $3.5 trillion to $1.75 trillion which includes ‘Hollywood excesses’.

However, simple averages in healthcare spending do not necessarily reflect true cost:

According to Kaiser, “In 2016, 5% of the population accounted for half of all health spending. The 5% of people who spend the most on health care spend an average of around $50,000 annually; people in the top 1% have average spending of over $109,750. At the other end of the spectrum, the 50% of the population with the lowest spending accounted for only 3% of all total health spending; the average spending for this group was $276.”

Even when comparing spending for people over the age of 65, 10% of that population accounted for 50% of the spending. People with a prior diagnosis of a disease spend upwards of 300% more than those currently diagnosed. And spending costs for those over the age of 65 is 2-3 times greater than those aged 35-45.

Between 2010 and 2016, Health insurers saw an increase in revenue from Medicare and Medicaid surging from $92.5 to $213 billion – an increase of 77% with the advent of Obamacare.   That income is mostly generated by taxing taxpayers to pay for the splurging costs incurred by those who have no wage, illegals, and/or welfare recipients.

As of 2017, the top six executives at United Healthcare raked in $1.75 billion in compensation.

In 2017, the US national gross income was roughly $19.6 trillion. From a simplistic standpoint, even an 8% tax levy on all gross income would pay for the entire healthcare costs assuming the above reductions in cost put the total annual cost on par with developed countries. If Trump’s tax overhaul were to bring back to the US income that is currently untaxable in foreign off-shore accounts, the flat percentage would be even lower.

How did Health Insurance even arrive in the US?

The brainchild result of FDR’s policies, insurance was invoked because FDR levied price and wage controls that stagnated capitalism in the employment industry.   In order to provide a benefit that another employer did not, so as to encourage a higher tiered worker, companies opened Pandora’s Box for the Insurance scheme.

Founded in 1929, Blue Cross and Blue Shield was the brainchild of Democrat Justin Ford Kimball.   As VP of health care facilities in Dallas Texas, the recipients were teachers who were guaranteed 21 days of hospital care per year for $6.   The tax exempt status of Blue Cross helped achieve increased costs.   At the time, it is estimated that the above average wage earner spent roughly 2%-3% of their income on healthcare.   Most people utilized friends, neighbors, midwives, Indian medicine, herbal cures, etc…

Eliminating the Middleman is key to lowering healthcare costs.   Obamacare did the opposite, it made more money for the Insurance Industry while enslaving the worker and businesses to an ever burgeoning cost that is now double any other industrialized country in the world.

Double. Let that sink in.

Simply rolling back Obamacare will NOT have the reduced cost effect that is necessary to bring the healthcare of the US to par.   And while this is not Medicare for all, or Universal coverage, it is an elimination of a middleman that has profited serendipitously at the expense of you and I.

My annual percentage is now over 20% of gross income.

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