A hot agenda in the Obama camp these days is the up and coming health care reform. Yet for some reason, the media isn’t giving it the needed attention it deserves. Did you know that the cost of our health care system is the most expensive in the world? Let’s explore this topic further because we, as owners of our own body and citizens of this nation, touches health care physically, emotionally and financially.
The Problem
Currently, Americans are paying for coverage that’s much more expensive than other developed nations. With rates of premiums rising, the problem is only getting worst and many families are deciding to forgo coverage in order to pay rent. In a study done in 2006, it is estimated that 47 million people in United States does not have health insurance coverage, totaling 16% of the population. Fast forward three years and in the mist of one of the deepest recession we have ever seen, it’s likely that the current situation is even worst.
Unneeded tests, higher than necessary administration fees are all culprits of the current system. Everyone has their different theories, but you’ve got to admit that something is wrong with our system.
The Proposal
Obama’s solution is to create an universal health care system that brings health care coverage to every American. The problem? It’s EXPENSIVE. In a time when our nation is severely in debt, we just don’t have the money to pay for it. In addition, extending coverage to every American would bring on unforeseen consequences.
Here’s what one reader wrote about the health care plan:
Personally, if I had low cost health insurance, like $100/month or less, I would not be working – I’d retire. That’s the thing that’s keeping me working. That would be good for me, and good for someone else, as my job would become available…. economic stimulus through job creation due to lots of people retiring who are only working for the health insurance.
Where I used to work, I know five people that are working only because of the employer-sponsored health benefits. Sure, five people retiring may create five openings, but that translates to the lost of five known productive employees for my former boss. Not a good thing for the short term.
And for the economy? Five retirees means five people who are earning and spending less. The new employees might fill the hole, but I doubt that they will be getting nearly as much salary as the retired employees who know the company inside out.
Here’s another writer comment about the system:
Will there be too much abuse of the system? There already is, so I would imagine it will only get worse. There needs to be limits on what is covered and what is not. Basic care, but not million dollar care, and who draws that line?
Growing up, I was privileged to witness one of the most comprehensive government-run health care coverage in the world – I lived in Canada. Abuse was out of control back then. Everyone would go to the emergency room for the “littleist” of problems. Doctors were booked for weeks, because everything was free. Worst of all, the government was going bankrupt. Another problem, which this comment illustrates perfectly:
And if the government keeps handing out ‘free stuff’, the incentive to work a real job is gone – no need to if the government will provide everything for us…. we turn even more into a welfare society.
In Canada (back then at least), people didn’t have the motivation to work. I mean, what’s the incentive if everything is free and you are taxed to death? In order to fund all the social programs, the highest tax bracket was 52% in Ontario, Canada. Yes, 52%! You can never say for sure that it’s the main cause, but what I noticed in Canada was that people are much more laid back. There’s less urgency to get things done, and more of “there’s always tomorrow”. That didn’t work, so with a bit of reform, the tax rate in Canada along with a health care system is a bit more refined.
I’ve heard many stories of people in the United States not worrying about their health and treatment in their dying days, but instead about their insurance coverage. They aren’t battling the disease like they should, but they are battling the blood sucking companies over the phone.
When my grandfather was having surgery a couple of years ago in Canada. We were upset about the situation but never have any of us worried about coverage or anything that shouldn’t matter during that time. My grandpa received first class treatment and it gave him the best chance to survive. Perhaps there are some benefits to an universal health care system, no matter the cost.
What do you think?
Further reading:
- Health Care Page – WhiteHouse.gov
- Obama’s Heatlh Care Reform Plan – in PDF
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{ 15 comments… read them below or add one }
Honestly, Ning. A life without health insurance coverage would be like the life without water and air. Health insurance is increasingly important, especially when we’re living in the world that full with numerous types of contagious diseases…!
Of those 47 million people that don’t have coverage, I wonder how many of them are without coverage by choice. Having used health insurance and medical care quite a bit in the last couple of years in the U.S. we’ve seen it from the inside. Quite honestly it is a bit overpriced, however, we still have amazing care (at least here in Minnesota) and I can’t say I’m excited about the prospect of the government giving out universal health care. The costs are just too high, it will kill private insurance companies (because the government can provide a cheaper subsidized alternative) and the waits for medical care will increase. Also it will mean health care rationing where a bunch of government bureaucrats will decide if we get to have a certain procedure (or if it costs too much?). Add to all that the fact that we are in the middle of a huge recession and skyrocketing deficits, I can’t understand how anyone thinks that we’ll be able to afford this?
If there’s a vote for universal health care, I’d have to say no. Everything that is government related. DMV, IRS, passports, customs when we travel are a pain to deal with and sloooooooooooow. I seriously don’t need to wait in a huge line when I’m sick and in the emergency room!
“Everything that is government related… are a pain to deal with and sloooooooooooow.”
Yes like the fire department, police department, libraries, and military. =)
I’m more for some of the proposals of heavily taxing the likes of McDonald’s and Pepsi. That would attack the root of the problem (we’re getting fat and unhealthy) and subsidize non-packaged fresh fruits and vegetables. This would hopefully cause us to be more healthy and make the cost of health insurance go down in the process. It’s a win-win.
Once again, David gets Friday going with a bang.
I think the biggest question is, is health care a right? I don’t believe it is. It is no more a right than having a job, a car, a phone, internet, etc. You practically need a car to get around, should the Gov’t be giving us a car? And then they have to pay for my insurance. You certainly need a job. If the Gov’t provides everything there is no incentive to provide for yourself, improve your circumstances, change the world, etc.
If you decide it is a right, how far do you go? Health care isn’t just about Dr. visits, stitches, and an occasional surgery. What about mental health? What about preventive care such as vitamins, good food, and excercise? Is the Gov’t going to pay for my food, vitamins, and fitness center dues? Are they going to pay for my plastic surgery because my nose is too big and affects my self-esteem? What about dental care? Is that going to be included. Dental health plays a huge roll in physical health.
If the Gov’t is paying for health care do we then outlaw certain careers such as rock-climbing, car racing, football, basketball, etc because the cost to handle injuries from those is too large. Not every professional athlete makes Millions. Do we outlaw activities such as skydiving, chain-saw art, driving down the street because the risk of injury is too high and the potential medical costs would be, too, high?
Is the current system, too, expensive? Yes. And I’ve said for years that the industry was shooting themselves in the foot and eventually this day would come, a day they really don’t want arriving. The Gov’t will not fix health care. They can’t. There are too many variables.
If health care is a right, then what about the education for the Drs? One big factor in health care costs, is the cost of the education to become a Dr. Most Drs get out of school with $100Ks of debt. They risk the amount of money because they know if they do a good job, after a few years they will have that paid off and have a good living. So will the Gov’t mandate the educational expenses? Will they mandate how much they can be paid? I don’t believe either of those will improve our health care. There is an exceptional chance it will make it worse.
Will they stop providing care to illegal immigrants? That is another thing driving up the costs. Drug costs are another. On the other hand, it costs 100s of Millions to try to bring a medicine to market. If there isn’t incentive for profit, many good medicines will never be created.
Medical tests are another huge cost. I’ve had two different tests for my gall bladder. The first one was about $800 and the second was about $1200. That doesn’t include the Dr. visits. The equipment and medicine for these tests probably cost in the $100Ks to invent, create, manufacture, etc. If I have it removed, that will probably be around $2500. For the moment, I just live with it. The pain isn’t unbearable.
Rushing this through is not a good idea. It is very complex and good solutions can’t come in a flash. Personally for my family, HSAs have worked out well. We are able to deduct the contributions, pre-Tax, and for the most part I know what my medical expenses are for the year. Some changes could be made such as allowing for higher contributions to cover dental bills, glasses, and other expenses. We actually hit our deductible this year so I could have my gall bladder removed without additional costs. For my family, the health insurance company is already in the red.
Will the Gov’t plan just cover the basics and are actual costs go up in order to have additional coverage?
I wish I had some good solutions, but I don’t at the moment. I don’t believe raising taxes to pay for it is one. One big factor is us. We live to excesses, made a world that is very harsh and now we want medicine to solve all of our ills, let us live to 100 and have the Gov’t pay for it to boot. So then we can add even more excesses, and the cycle continues.
I think CJ Perry hit one of the nails on the head (there are several). You can’t just look at health care costs from country to country. We must consider lifestyle as well. Health care costs drop dramatically for people who eat right and exercise. And these behaviors cost little to nothing to implement.
Another area (nail?) where we have it backwards is our mental health. Good mental health has also shown to dramatically reduce physical health care costs. Yet may Americans don’t have this coverage or it is limited. I can direct you to peer reviewed researched (on request) showing people who get treatment for depression have half the medical (medicaid) cost of those getting treatment for their depression. Yet the government program greatly restricts this treatment.
Steve and CJ Perry,
Right on! Considering that my current health insurance reimburses me $20/month of my health club membership fee if I go at least 8 times per month, we already have this type of incentive in place in some ways. The insurance company isn’t in business to make me healthy, they’re in business to make money, so the only reason they would subsidize my excercizing would be if it makes me healthier and IN TURN, I cost them less to insure.
In a government run program, we could reduce the cost to insure people with a similar incentive of tax breaks for those who excersize, eat healthy, etc. Doesn’t the UK have incentives for people if they are able to lower their blood pressure or cholesterol levels, have a healthy weight, etc?
I’m not saying it is THE solution, but what’s currently out there isn’t working as well as it should for Americans (yes, I believe in American Exceptionalism), so maybe this can be a part of the solution.
Like you say, there are pros and cons regardless and we have no money to fund anything. I think it will be some sort of mix between universal and private. The problem is we are already the most medicated country in the world and people will take advantage of a low cost system, clogging up the hospitals and doctors. There should be some mix so you if you can afford and want a more expensive private exclusive option, you have it. Still how to fund and keep companies competitive for future advancement in technologies?
Here is a quote from a congressional study:
“Because this estimate was made before the financial and economic meltdown and the subsequent dramatic worsening of the employment picture, the actual job losses would likely be considerably higher.
An even more troubling conclusion of the same study is that uninsured workers would be seven times more likely to lose their jobs than those with insurance. In other words, a costly mandate on businesses designed to reduce the number of American workers without health insurance would likely swell the ranks of those who are simultaneously uninsured and unemployed — aggravating the very crisis it is ostensibly designed to address.
Putting the most vulnerable American workers at risk of unemployment in the middle of a recession is, quite clearly, the wrong direction to go. ”
This comes from an article on Bloomberg: http://www.bloomberg.com/apps/news?pid=20601039&sid=ajuYsywnyhxM
They even have one potential solution: making all medical expenses, pre-tax, not just those offered through an Employer.
cd :O)
re: Retires with less money. Not so in many cases. I for one will be bringing in more in retirement than I actually am working now, ie, more $$ to spend – not that I would spend it.
And those getting the retiree’s jobs… While their salary might be less than their predecessor, they will mostly likely be making more money than on unemployment, or unemployment run out, or their previous job or they probably wouldn’t be moving into the new job. So I don’t think your line of thought works on that situation.
I think there is a feeling of entitlement – that everyone should have health care. This was not always the case….
But here we go on the illegals and welfare cases…. If “THEY” get free medical care, then why can’t the working class have free medical care also? I think that is where the sense of entitlement, or “I want it too” feeling is coming from.
If, on the other hand, the freebie handouts quit, then people would eventually quit thinking they are ‘entitled’ to it, and actually strive harder to go out and earn it for themselves – usually via a good job. With the sense of entitlement now here, there is no compelling reason for them to try harder to get/keep a job…. the opposite is true – “If I quit working the the government will take care of my needs.”….. That’s the thought process that is killing America….
What’s the answer? I don’t know. Bringing back personal responsibility would be a good start…. and no more bailouts would be another good start. If something fails, then it fails. That’s real life, survival of the fittest and all that. We’ve lost track of it.
Nice thought provoking post, David
Very thought provoking post.
As a health care worker I have to say that the benefits of a universal health care system are undeniable. That’s why the United States is the only industrialized nation that does not have some form of universal health care. As a result we spend much more per citizen on health care with less positive objective outcomes (such as life expectancy and infant mortality).
People complain about the cost of implementing a universal health care system but what they fail to take into account is the cost if we DON’T implement some form of health care reform.
Currently we spend 25% to 30% of all our health care dollars on health insurance company overhead costs, much of the money used to pay excess executive pay such as the Angela Braly of WellPoint who took home a salary over 9 million dollars a year. In addition, the bloated overhead costs are in part due to the amount of work insurance companies perform looking for ways to ACTIVELY DENY CARE!!!
in addition the millions of uninsured patients frequently use the emergency room for medical care that cost 2 to 3 times as much as the care provided by a primary doctor. Those costs are past on to those with health insurance so in essence we are all “taxed” for this inefficient type of medical care. The uninsured are also more likely to seek medical care when simple problems have progressed into much more costly, life threatening conditions.
This is not mention the economic cost. US industries are put at a competitive disadvantage when they have to pay for health care costs and these costs are built into the price of their products.
Several foreign auto makers recently sought economic aid from their governments in the recent economic downturn but it was GM that filed bankruptcy. Maybe the extra $1200 priced into each one of its cars to cover health care costs had something to do with it.
Many people are job-locked, not able to find work that would take advantage of their true potential because they are afraid of losing their health care.
A single payer system would do away with health insurance companies that serve no real purpose but to suck up a large percentage of our health care dollars and would bring the US into the new century with the rest of the industrialized world.
But with health care and pharmaceutical lobbies throwing millions of dollars at congresspeople and Senators I think that unfortunately single payer health care is a pipe dream.
Charley-PayLess raises a good point. Looking at the price for a single payer systems seems astronomical. It is. But that argument rarely subtracts the cost we are currently paying. As Charley points out, we currently have lots of inefficiencies and hidden costs. The cost is socialized medicine is not so great once you actually compare it to ALL the costs and inefficiencies of the current system.
One of the problems with the current system is those of us lucky enough to have good insurance usually don’t know what anything costs beyond our co-pay. Yes, I get an EOB (Explanation of Benefits) for every bill, but usually can’t decipher it. And I never know what a procedure or office visit will cost BEFORE I’ve seen the doctor. I tried to find out once. My insurance is supposed to pay 100% for dentist visits, but I kept getting bills for small amounts because the charges where greater than “reasonable and customary”. I tried to find out what was reasonable and customary for an Adult Cleaning and X-Rays. It took 7 phone calls. At first my insurance didn’t want to tell me. I had to speak to a manager, then she made me get the diagnostic code for each procedure. Then the dentist’s office didn’t want to tell me what they actually charged. And that was for a routine cleaning. Who has time to do this for everything? In the end I called around and every dentist in my area and under my insurance plan charged the same thing. Isn’t that reasonable and customary?!?
The ads in the Sunday paper quickly tell me what the grocery store is charging for food. I can compare Wal-Mart to Target with little effort. The cost for gas is advertised on the street corner with neon numbers. Why is the cost for health care so hidden? What do they have to hide? Where is the competition? BTW, I would not simply pick the lowest cost doctor. But I would like to know where I stand financially. What do you call the physician who graduates at the bottom of their medical school class?
Doctor.
I often find dragging Canada as a comparison to proposed reforms in the U.S. to be a bad comparison. Health care is a provincial responsiblity in Canada (I believe it is Federal in the U.S.); the Canadian Federal government tops up the province’s health care spending through a redistribution of its tax dollars. As you also mentioned, the political climate in Canada is different than the U.S. (Canada consistently tops U.S. in happiness studies so, although I am as frustrated as you about a lack of go-go attitude, perhaps working and consuming until you drop has its downsides as well). Ultimately, Americans should adopt a system suitable to the American political system and stop trying to use Canada either pro or con for proposed reforms.
The larger point is how the heck is Obama going to both see the economy to better times and undertake health care reform at the same time?
Great post and reader comments! I don’t like increased government size or involvement. However, when it comes to fixing the health care system, I hope we have a univeral health care system in the US.