Don’t Be Fooled

When insurance companies, doctors, and conservative politicians scream that we cannot afford universal health care, they do not mention that we already pay more for healthcare than we would for a single-payer system. They wave their arms and jump up and down with hair on fire as if a public health care system would begin at zero dollars and suddenly plop billions and billions on top of the deficit. Do not be fooled.

First of all, while taxes are progressive – the wealthier are supposed to pay a higher percentage of their income on taxes – healthcare costs are not. Everyone pays the same. Therefore, lower and middle income households pay a much higher percentage of their income for healthcare than do wealthy families. Because of the growing number of people forced to choose high-deductible plans in order to lower the premium, that burden is becoming more and more uneven.

Currently the average employer-provided individual health premium is $6400, of which the employee pays $1400 a year. The average family premium is $19,000, of which the employee pays $5200.

To sharpen the pencil a little, the median U.S. wage is $44,564. So that single insurance premium of $1400 equals 3.14% of the median wage.

3.14% is about one-quarter the social security tax rate per wage earner. Even the family premium, which is 11.66% of the median wage, is still less than the Social Security tax rate. In other words, what we already pay in healthcare premiums, not to mention all the additional healthcare costs that remain uncovered by insurance, could be covered through a payroll tax less than the current percentage ascribed for social security. If it was progressive, with a sliding percentage scale based upon income, then it would be considerably less for middle and low income wage earners. Instead of paying that money to insurance companies, and all the out of pocket expenses most of us pay because of the meager health plans we can afford, we would have a national, single-payer system. If rich people were dissatisfied with the universal system, they could always pay more for a personal, private plan.

Remember when you hear screaming about catastrophic costs from gold-diggers and capitalists who commoditize human services the same way they do cars and dog food, that paying for a single-payer system begins with all those premiums we now pay to insurance companies. We don’t begin at zero.

Here is one more fun fact generated by this conversation that is rarely aired or understood in the public discourse. The medium wage earner is currently spending 37% of his/her pay on taxes and medical premiums combined. Finland – one of those socialist democracies we seem to be so afraid of – provides excellent national healthcare with a tax rate at 23% on the median wage. (See “Universal Health Care Might Cost Less Than You Think” by Matt Bruenig, New York Times, 4/29/19).

There are a number of national health care options being touted by presidential candidates, and all of them are the target of misinformation missiles from an industry fat and greasy with profit, even when called not-for-profit. Let’s manage our anxiety when hearing from them by giving our attention to the facts.