Our American healthcare system is very large and very complicated. So let’s break it down a bit into some component parts.
One aspect to consider is who owns the entities that are arranging for the payment of healthcare delivery. We talk a lot about moving to a single payer system, but what does that actually mean?
Today let’s look at the major payers in our American system and rank them according to how “socialist” they are:
Veterans Administration. This system is most similar to the United Kingdom’s national health service. The Veterans Administration owns and operates about 170 hospitals and 1000 clinics across the United States, and it employs all the doctors and nurses and other medical professionals who deliver healthcare to around 9 million people. So in this case, there’s a single payer and a single provider of healthcare to veterans. In recent years there have been efforts to privatize this system or somehow develop a hybrid public-private version, in particular after complaints about wait times to get healthcare services.
Medicaid (Medi-Cal) in California. In this system, there is still a single payer (the states, using federal dollars combines with state dollars, depending on the programs that get wrapped into each state’s Medicaid program). However, healthcare is provided by a wide range of public, non-profit, and private facilities and individuals. Nearly half of Medicaid dollars are spent on nursing home care for the elderly.
Medicare. Medicare is a hybrid system, when it comes to who pays. It is funded by workers (through a 1.45% payroll tax plus 0.9% for highly compensated employees) and employers (an additional 1.45% payroll tax), through insurance premiums for some parts of Medicare, and through deductibles and co-payments. In addition, Medicare Part C allows private insurance companies to provide policies that integrate the basic aspects of Medicare with supplemental insurance plans that provide more services. Insurance companies provide much of the administrative services, and healthcare services are provided on a fee-for-service basis by a wide range of public, non-profit, and private facilities and individuals.
Private and Employer Health Insurance. Large and medium sized companies and many unions negotiate with private insurance companies to purchase health insurance for their employees (and often employee family members) as an optional part of the benefits package offered to employees. The costs are born by the employer or union (typically 50-80%) and by premiums, deductibles, and co-payments paid by employees. This system operates completely within the private sector. The Affordable Care Act added onto this system an option for people not covered by employer plans to purchase insurance through government-negotiated rates and plans, known as healthcare exchanges. There are also a number of tax incentives set up to help people reduce the cost of healthcare through private insurance, like health savings plans and the ability to deduct the cost of healthcare from your earned income if it exceeds a certain amount.
No insurance. There are still 28.2 million people in the United States that do not have health insurance. They pay all their medical costs from their own budget.
Back to single payer - it’s going to take a lot of work to take all these systems and convert them all into one system where there is a single government agency who pays the costs. There are also a lot of questions about how much that government agency will pay, and how much we individuals will pay. We’ll tackle more of those questions tomorrow.
This post is sponsored by Marty Walters for Congress, FEC ID C00639732
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