Showing posts with label health care. Show all posts
Showing posts with label health care. Show all posts
Thursday, September 24, 2009
Tuesday, March 17, 2009
Health Care Options in the US, Bankruptcy or Death?
As one of the followers of this blog asked, I shall comment on my views on the pernicious state of health care in this country. First, the ground level must be established, which is that the US spends the most money in the world of any nation on health care, in both absolute and per capita terms. We are the only industrialized nation on the planet without a universal system, and with a very weak public health care system. On the positive side, those with the means to pay can get the best care in the world.
Given these realities, what causes the inequality between the the health care system for the average American versus the wealthy and how to correct this imbalance. A first problem arises in the nature of the insurance system. Insurance acts as a subsidy, so it pushes the demand for insurance to the right. This makes perfect sense, since consumers who are paying less than full costs will consume a larger amount to gain greater satisfaction, and hospitals will charge more because insurance will cover it. For those without insurance the cost of health care is priced out of the range they can afford, so the options for care are bankruptcy or death. Some social darwinists will argue that this is a price to be paid for being poor, and that the poor have medical care-namely the emergency room.
This makes a lot of sense when a visit to the ER, with nothing more than talking to a doctor for ten minutes costs 500-1000 dollars. So let's do a little math exercise here. Suppose that individual X works part time while going to college at ten dollars an hour. Their pay for the year before taxes is around 20,800. Let's subtract the circa 15% that all of the taxes and social security and unemployment insurance taxes out and we are down to $17,680. A single visit to the ER can costs 5% of their take home pay or more for the year. Subtracting the costs of a car, food, housing, and this figure rises to 15-20% or more. How is that any kind of equitable system?
My main issue is the insurance system which is used here. First, there is no real choice because individuals who have any kind of serious conditions are unable to be accepted by insurance within an affordable price range after they are dropped for a pre-existing condition here. In Israel, this is solved by having four nationally regulated HMOs, so individuals who pay into a health care plan there have transferability between jobs and the result is that individuals are not trapped to their jobs for insurance as happens in the US. Further, there are no mechanisms to prevent the denial of service on the basis of pre-existing conditions, so companies have a monetary obligation to drop individuals who will cost them more money. Why cover someone with cancer when they are costing more than they pay in?
Another problem is that we have little choice in how the public money we pay for health care is used. Finland uses a system I prefer the most, which is a publically funded healthcare system with the ability to use the taxes paid for part of a private plan if an individual so desires. They have higher taxes than here, but since nobody has guaged the actual tax levels paid between federal, state, city, Social Security, unemployment, worker's compensation, registration fees, etc. we do not know how much more these countries really pay. Considering that medical expenses are the number one cause of bankruptcy in the US, perhaps paying higher taxes is not as onerous as Rush Limbaugh and other corporate mouthpieces would lead us to believe.
I would write more, but it is 4 AM and dealing with the insanity that is the US insurance system casues great fatigue.
Given these realities, what causes the inequality between the the health care system for the average American versus the wealthy and how to correct this imbalance. A first problem arises in the nature of the insurance system. Insurance acts as a subsidy, so it pushes the demand for insurance to the right. This makes perfect sense, since consumers who are paying less than full costs will consume a larger amount to gain greater satisfaction, and hospitals will charge more because insurance will cover it. For those without insurance the cost of health care is priced out of the range they can afford, so the options for care are bankruptcy or death. Some social darwinists will argue that this is a price to be paid for being poor, and that the poor have medical care-namely the emergency room.
This makes a lot of sense when a visit to the ER, with nothing more than talking to a doctor for ten minutes costs 500-1000 dollars. So let's do a little math exercise here. Suppose that individual X works part time while going to college at ten dollars an hour. Their pay for the year before taxes is around 20,800. Let's subtract the circa 15% that all of the taxes and social security and unemployment insurance taxes out and we are down to $17,680. A single visit to the ER can costs 5% of their take home pay or more for the year. Subtracting the costs of a car, food, housing, and this figure rises to 15-20% or more. How is that any kind of equitable system?
My main issue is the insurance system which is used here. First, there is no real choice because individuals who have any kind of serious conditions are unable to be accepted by insurance within an affordable price range after they are dropped for a pre-existing condition here. In Israel, this is solved by having four nationally regulated HMOs, so individuals who pay into a health care plan there have transferability between jobs and the result is that individuals are not trapped to their jobs for insurance as happens in the US. Further, there are no mechanisms to prevent the denial of service on the basis of pre-existing conditions, so companies have a monetary obligation to drop individuals who will cost them more money. Why cover someone with cancer when they are costing more than they pay in?
Another problem is that we have little choice in how the public money we pay for health care is used. Finland uses a system I prefer the most, which is a publically funded healthcare system with the ability to use the taxes paid for part of a private plan if an individual so desires. They have higher taxes than here, but since nobody has guaged the actual tax levels paid between federal, state, city, Social Security, unemployment, worker's compensation, registration fees, etc. we do not know how much more these countries really pay. Considering that medical expenses are the number one cause of bankruptcy in the US, perhaps paying higher taxes is not as onerous as Rush Limbaugh and other corporate mouthpieces would lead us to believe.
I would write more, but it is 4 AM and dealing with the insanity that is the US insurance system casues great fatigue.
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