In the course
of numerous rounds of golf or the mandatory
post golf debriefing over lunch, I have heard some truly ludicrous misstatements
regarding healthcare. Because of where I
live and the political persuasion of many of my friends (some of whom, in
fairness are in the throes of serious buyers' remorse) I generally am silent or
non-committal in these discussions; I know, I find it hard to believe myself.
My favorite
bullshit statements are usually in the area of "Obamacare is socialized
medicine" or, should one to dare
mention or endorse the concept of a single payer plan, the response is to
lambaste the cost and taxes that the speaker believes must attend such a measure. I say "believes"
because, as so many of the Reflexive Right do, the speaker frequently is orating
based on what they believe to be factual without ever having done the homework.
So....although they'll never read it, here are
some stats related to the issue. It must also be mentioned that all of these
chaps are retired and on Medicare, which, being a single payer system, IS "socialized"
medicine. So far this has not caused any
of them to refuse it. I pointed this out to one such soul who immediately
responded that "I paid into it!" My response that the Brits do too,
through taxes, elicited a harrumph.
First: The
Affordable Care Act is not socialized medicine since it mandates the purchasing
of private healthcare insurance. Note the word "private" as in "not
government" insurance. It is a poor compromise forced on the President at
the time, because of the intransigence of the opposition party in Congress, who
refused to even sit down and talk about it. The extension of Medicaid by the states to persons above, but close to,
the federal poverty limit would be "socialized" to a degree, if most
states did it. Many didn't for the wrong reasons, preeminent among which was.
"They're poor, screw 'em."
Second: There
is almost a unanimous belief among these persons that the British national
health service costs the nation more than whatever the US has in place. When
one considers the amount of salary which goes to the National Health Service
(NHS) it might seem that way, but it isn't in fact. Consider the example of a
middle class wage earner (or any one for
that matter): The percentage of income which goes to the NHS is 5.7% of income.
So what do you get for that? Zero co-pays for Doctor visits, hospitalization or
medical procedures, which now are frequently faster than in the US.
There are modest, especially by US standards, co-pays for dental, (Far less
than almost any US dental plan), Optical, and prescription drugs. A note here,
the co-pay for prescription drugs in the UK is typically far less than the same
drugs in the US. In the UK, if over 60, under 16, pregnant, or with any other of a long list of issues
or financial circumstances, they are
free. This includes if you walk in to a hospital off the street in need of medication.
Cancer drugs are free. Period!
Wow, 5.7% seems
like a lot, huh? Consider that the average American spends about $1300 annually
on drugs, but those with insurance spend more like $200, since insurance pays
much of the cost. But wait: How much does the "average" American family spend on the actual out of pocket cost
of health care? In 2017, it looks like the one earner family of four will contribute
(pay - call it what it is!) about $6717
to the cost of an employer sponsored group plan and an additional $4316 in
additional out of pocket costs. This amounts to right at $11,000 per year in
health insurance costs! Compared to the UK percentage, as a percentage of gross income this is about twice as much paid for much less health care. Note that
this is for persons with employer facilitated plans, those who are self
employed, just lube up and bend over.
So, for a real
world comparison of what this means, I did the following comparison using an
imaginary UK single earner family and the same family working for my former
Employer, Orange County (Florida) Public Schools. In each case it assumes a
spouse and children (number is irrelevant for this case.) I also assumed that
the teacher was a high earner in the 17 year plus bracket with a master's
degree. I will assume the teacher is me, I taught 20 years, I had yearly evaluations of "Highly
Effective" (I did/was) and a Master's degree add on of $3000. Today this would
put me at a lofty $68,766 annual salary!
As an aside, this is about $4,000 per year
less than my basic military pay would be at 20 years and an E-9 (I was). Adding
in allowances, an E-9 on recruiting duty today in Leesburg Florida would earn, before
FICA, just under $104,000 annually and have essentially ZERO health care costs!
But, back to
the teacher: Depending which employer
offered Health Care Insurance plan I choose for myself and spouse, I could expect to see (from cheapest to most
costly for employee, spouse and kids) another annual cost of from $3600 to
$11,760! This is exclusive of co-pays (extensive in the "cheap" plan)
and, in the lower tier two plans limits on choice of providers. In fact, in the
lower tier plan, add $3000 for initial copays alone before Insurance pays a
dime!
Now for the big
reveal, as they say on "Fixer Upper."
A person living in the UK earning the same as the teacher (£54,576. or $68,766) pays exactly (I used the online UK tax calculator
but assumed zero deductions, so it's the absolute max tax load) $13,236
adjusted from Pounds, annually in taxes. This is before personal savings
deductions or pension contributions or other reasons to pay less which many Britons
use. By comparison, an "average US
taxpayer would pay an 13% effective tax rate with all available deductions
(unless, of course they're a "one percenter" like Donald Trump). This
amounts to about $ 8939 in taxes paid, and you say, "But Mike that's less than
the Brit." Yes, but, and this is a big but, the US taxpayer actually got less in
the paycheck due to employer deductions for health insurance and spent much
more out of pocket for health care to boot. Add this average annual expense back
in and the equation changes radically.
The US teacher actually only got paid (assuming the
"best" employer plan) $68766 - $6717 (health care contribution) for a
total before taxes of $62,049.
deduct 13% X $62,049 (witholding, it would actually be more) for a take home of
$53983 (this is actually too high, since I'm using the effective tax rate, not
the witholding one, which also includes Medicare, which the taxpayer will pay before
using it as well as after.
Add to this the after tax cost of (again
an average) $4316 in out of pocket costs, and the comparable take home is $49,667.
This is equivalent today to £39,418.
This within a couple of hundred dollars of a precise break even, but wait! For
his money, the Brit will also have Dental (Root canal $67.00!) and Vision care
(with some co-pay for glasses; cataract
surgery is free, but if you don't want to wait 18 weeks, then have it done
privately, cost is about $1200, compared to US average of $3700!).
Additionally, this assumption for the US
employee assumes zero hospitalization or even urgent care or Emergency room
visits and no catastrophic health care issues, because that shifts the whole
equation, since for the Brit, there is essentially zero additional expense. It
must be noted that I used the UK as an example here, but every European nation
has National Health Care and, with the exception of Norway, all do it cheaper on
a per capita basis than the US. So yeah,
The ACA is a poor substitute for National Health Care, but as long as Big
Pharma and the Insurance Industry have legislators, and now POTUS , in their
pockets, we'll be better off muddling along than with the giant bucket of horseshit
proffered by Ryan and company. Bless the
hearts of those few Republican legislators who listened to their constituents
and said "Hell no!" May they continue to use their consciences.
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