Sunday, April 8, 2012

Who Should Pay for Health Care?

     I started thinking about this topic because I recently did my taxes and found I could take some medical expenses as a deduction on Schedule A. The IRS classifies any medical expense above 7.5% of your adjusted gross income as a legitimate deductible item.

     I figured that, including what I paid for medical insurance, I actually spent a little over 20% of my income last year for medical treatments. And I wasn't even sick!

     What if I needed something big -- like my friend who recently had to get a pacemaker implanted? The bill, he told me, was well over $50,000. But he has pretty good insurance, and so he paid just a tiny fraction of that out of pocket.

      In this day and age, I think of health care kind of like fire protection, or the police force. We have a fire department because a private, for profit, fire department just wouldn't serve the public very well. First of all, hopefully, there would never be enough business to support competing private fire departments. And then, you don't want to be standing there with the fire-department salesman negotiating a price while your house is burning down. Or, what if you're getting mugged, and the policeman who works for a private company demands a surcharge before he will pull the attacker off you?

     These days, who can pay for medical care if they get a terrible disease, or suffer injury in a car accident? There's no longer a town doctor who makes house calls. You instead go into the big, bureaucratic medical system where decisions are made out of sight, and prices are determined by some kind of weird calculus involving the government, private insurance companies and big medical groups. You have no say in the matter. You can't shop around. You're in no position to negotiate a price, any more than you would be with the private fire-department salesman.

      And besides, do you have a spare half million dollars lying around to pay for a bypass surgery if the doctor suddenly determines you need one? Or to pay for a regimen of surgery, chemotherapy, radiation and follow-up care if a test suddenly finds a tumor in your gut? Are you going to try to shop around for a discount doctor? Are you going to cut costs by foregoing the anesthesia?

     And yet, I'm continually flummoxed by people who are appalled that they have to pay for health care at all. Some people think they have a "right" to free health care.

     But why should they? We don't get anything else for free. One way or another, you have to pay for your goods and services. You pay for the "free" fire department and the "free" police department and the "free" public schools with your local taxes (which, by the way, though you may not realize it, take a pretty good chunk out of your income.)

     The medical world uses around 16 to 17% of our national economy. So, theoretically, whether you're rich or poor, you should be prepared to spend around 16 to 17% of your income on medical care -- whether you're paying a private insurance company or the federal government, or paying directly to the hospital.

     I have a friend. I don't know the family's financial situation; but they live in an upscale townhouse; they have two cars, the younger daughter goes to a private college; and they seem to do a lot of traveling. Last year the older daughter, who's 26 and was living at home at the time, broke her arm and ran up several thousand dollars worth of medical bills. The daughter only had a part-time job with no medical benefits. For some reason she wasn't on her mother's plan (maybe she wasn't eligible, or if she was, they didn't want to pay for it), and she certainly didn't have her own insurance, because she "couldn't afford it."

    So when the doctor and hospital bills came in, the mother gave them to the daughter, who in turn passed them off to New York State. Both mother and daughter had to spend a lot of time on the phone, and fill out a lot of forms, but in the end they got New York State to pay all her bills. In other words, the daughter palmed off her medical bills on the rest of us. She had no qualms about it. It never occurred to her that it might be unethical; she felt no guilt or shame. In fact, she seemed kind of proud of her financial savvy -- that she was able to beat the medical system and get someone else to pay. And then she bought a new snowboard and some other winter equipment and headed off to California to spend the winter working at a ski resort.

     Now, I'm an American and I believe in democracy and I respect the Constitution, even if it sometimes makes us uncomfortable. For example, I'm in favor of gun control. But I'm aware of the 2nd Amendment, so I believe we should tread carefully in that area and find a way to limit gun violence without infringing on the rights of hunters and whoever else wants a gun.

     The same goes for health care and the individual mandate. It does make me nervous to have the Federal government start telling us what we have to do, and what we have to buy. But do you really think it's fair for people to save money by not getting medical insurance, then run up big, expensive medical bills and expect someone else to cover the cost?

     Honestly, I don't know what's in Obamacare. (I do know that our 20-somethings are now eligible to get onto their parents' insurance plans; but you still have to sign up for it and you still have to pay for it.) I don't know how much Obamacare will cost us (and I bet you don't either). But I'm definitely in favor of some kind of medical system that works for everyone, and that treats everyone fairly. And it seems to me that as long as doctors and hospitals are mandated to treat people who are sick or injured, then it's fair for people to be mandated to buy medical insurance. In fact, shouldn't that young lady be spending 16 - 17% of her income on health care -- just like the rest of us -- instead of blowing it all on a new snowboard and airfare to Lake Tahoe?

     One thing Obamacare doesn't seem to address very well is the cost of health care. If I spent over 20% of my income on medical care last year, what will I spend if I really get sick. Or rather, not if, but when I really get old and sick?

     According to the Organization for Economic Development we spend $8,000 per person per year for health care in the U. S. According to an article on CNN, it's $20,000 a year for the typical family. Meanwhile, the cost of health care has more than doubled in the last ten years.

     What can we do about it? Well ... I wish someone had some ideas, but I'll talk more about that in my next post.

16 comments:

Anonymous said...

Here's a question: why should I be forced to buy health insurance when an enormous amount of healthcare expenses are the result of individuals choosing not to exercise, not eat well, smoke and not control their weight? Shouldn't the government first "force" people to adopt a healthier lifestyle before it forces me to pay for their irresponsible behavior?

Kay Dennison said...

I am old. I am poor. I am sick. Tell me what I need to do. The Republicans are cutting programs to help the poor -- especially women -- which might make you happy. Preventative care would help but often is unavailable those living in poverty.

We are the only major country in the world that doesn't have universal health care. People are dying.

http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/#46981474

Rubye Jack said...

What Kay said.

schmidleysscribblins,wordpress.com said...

You are a brave man to bring up this subject.

I don't agree with Kay, surprise? Children, the truly poor, and the old are covered with current medical care programs. I won't fill up this space by naming all of them, but one of the things I hate is when folks ignore what already exists for helping the poor, children, and old.

I for one would like to see our system rationalized by combining programs and letting the states do their job by overseeing the combination. I also do not think religious organizations like Saint Jude's Hospital for Children which never turns a sick child away, should have to pay for birth control pills and other items against their conscience. What's next, euthanasia? Oh that's right, the left calls is assistd death!!

The Federal mandate is dead I think. Obama opposed it as a Senator running against Hillary. He knows it is unconstitutional.

I don't blame Obama entirely for the health care law. Nancy Pelosi and her uber left-wing pals pushed it through with NO Republicsan votes, and they did a lot of arm-twisting of Blue Dog Democrats to do it.

Obama was so wet behind the ears when he signed it into law, he didn't know what he was doing. Of course, the buck stops there, so on that count he is responsible.

Althought they make much noise, the Republicans have very little power in the federal government these days. Dems control the Senate and White House and can block many things the Republicans might propose in the House. When the Health Care Law was enacted the Dems controlled all of Congress.

Many things could be done to improve the delivery of health care in this country, but the solution is too long to write here.

Picking out the "goodies" and hiding the endrun ramifications of a law(which the Dems have done with this new law) is dishonest. No one opposes health care for the poor and sick. The problem is to use our brains to fairly pay for whatever we create.

rosaria williams said...

You laid this out so clearly and so fairly that I want to ask your permission to repost it on facebook. Yes, like fire and police and schooling, we need to cover health because we don't know how and when we will get sick.
Great job!

Kay Dennison said...

@schmidley: Your knowledge/assumption on this problem is flawed. And yes there are those who could care less if the old and poor die. Just check of some of the right wing sites.

Until my Medicare kicked in, I had no healthcare available to me. My employer didn't provide it and I could afford it. Because I have had an incurable condition(s) for decades, I prolly wouldn't been able to get insurance anyway and the welfare system doesn't give a damn about older people.

I do agree that we need an intelligent approach. No system is perfect but universal healthcare takes the greedmongers out if the equation.

Linda Myers said...

Police and fire protection we pay for, all of us for the good of those who need it.

Health care could be done in the same way. But I do think lifestyle ailments should have a premium on the insurance coverage required.

I talked to a friend yesterday who has recently lost a lot of weight. He said, "I found a new doctor last year. He said, 'look, you're too fat. I don't want to treat you for ailments you might have because you're fat. So either lose weight or don't come back." He lost weight and went back. He's healthier now.

Sorry for the slide off topic.

Sightings said...

I don't pretend to know all the answers. I'm just bringing up the topic for discussion. But Anonymous, in my mind the reason for requiring people to get health insurance is because no matter how healthful our lifestyles are, we are all going to use the health-care system, and because the system is so big and expensive, and because we have little or no control over costs, the only realistic way to pay for it is by purchasing it on the installment plan -- aka insurance.

I can understand why people who abuse themselves with smoking, etc, should probably pay more. But how do you enforce it without getting very intrusive into people's lives? Besides, if I paid into the system for a long time, but never had to run up the big medical bills -- I'd consider myself lucky! (Which, for the most part, I've been so far.)

Rosaria, thanks, and yeah, it'd be great if you want to repost.

What I think is amusing is that a few years ago the Republicans were in favor of a mandate, and the Dems were against it. And now the Reps are against it, and the are Dems for it. So figure! But if I had to bet, I'd bet the mandate goes through. But then what do I know? We'll know soon enough.

rosaria williams said...

Done!

ellen abbott said...

there are many things wrong with our health care system and it's not all because of the uninsured of which I am one. I pay my medical bills when I visit my doctor. But recently I was bitten by a copperhead and had to go to the emergency room (because it was the only alternative) and they charged me almost $6000 to run a few blood tests and observe me for 6 hours (and by that I mean they checked on me a total of twice). Here's just one of the absurdities...they charged nearly $10 for a pain pill that I paid 80¢ for at the pharmacy the next day. Because I didn't have insurance they arranged for financial aid that paid most of it and I paid for the rest. Here's another example. My granddaughter fell at a church camp and busted open her chin. They took her to the emergency room (again because it was the only alternative) and the church's insurance paid the $3000+ bill. Instead of just putting a quick little stitch or two in her chin, the hospital decided to call the plastic surgeon who spent less than 5 minutes super gluing the cut together and then sent a bill for $800. Really? Poor and uninsured people, some of us anyway, could afford to pay the non-catastrophic medical bills if they were priced fairly. The problem with insurance is that you have to pay $400 - 600 a month per person and then still because of deductibles, have to pay for general care. That's out of the question for the under-employed, the lower class, the self employed. For me, my income varies month to month sometimes with no income for a month or two and the recession has made a tenuous situation even worse. Food and shelter come first.

Bob Lowry said...

I have yet to shoulder a gun and go to Iraq. I don't drive on the Interstate highways in Mississippi. I don't use the airport runways in Alaska. Yet, I pay for all of them, through my taxes. I pay for auto insurance to protect me against people who choose to break the law and not carry it. Living in a democracy means you end up paying for things that help everyone.

Why is a federal "mandate" for health coverage any different? Who do we think pays for Medicare, hospitals, and emergency rooms? We all do.

Because humans tend to be selfish and self-centered, we'd prefer to not be told what to do, but avoid responsibility when we make a choice that turns out to be wrong.

Kay Dennison said...

@Bob Lowry: You said it well!!! When I worked, I paid into the system as did we all. Now I am on the receiving end. I'm thinking of going back to work part-time -- if I can find something -- so I'll be paying in yet again and that's as it should be.

Dick Klade said...

Before Obamacare, some 40 million Americans were without health insurance. Some didn't want to pay premiums, but some who wanted coverage were turned down because they were sick and others were turned out because the insurance companies had payment limitations.

Obamacare stops the two heartless insurance company practices. With the yowling against it, the new law must do some evil things. What are those?

Is it wrong in a great society (ask any of us Americans, we'll tell you how great we are)to expect all citizens to have the basic sense of security that universal health care provides?

Don't we all deserve to know we won't be left to die simply because we become seriously ill?

Anonymous said...

While I look forward to hearing more in your next post, I hope you'll do us all the favor and stop calling it "Obamacare." It is the Affordable Care Act, or ACA. And shouldn't you know what's in before you continue posting about it?

Robert the Skeptic said...

"The IRS classifies any medical expense above 7.5% of your adjusted gross income as a legitimate deductible item."

The tax code has changed in recent years, there was a time when you could deduct ALL your medical expenses.

@schmidleysscribblins, you are incorrect that all poor and children have access to medical. I was a Welfare Eligibility worker for a number of years. Many of the people we would consider poor do not meet eligibility requirements for state Medicaid or federal SSI/SSD.

For me that absolute embarrassment for me as an American is that we were able to send men to the moon multiple times, but we cannot find a way to provide cost-effective medical care for our citizens as ALL the other developed countries, Mexico, China, etc. can. We are so wrapped up in the flag we can't see we are still unable to hide our shame.

Jenni said...

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