Health care: You pay for more than you realize

Published: February 7, 2010

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For all the wailing and gnashing of teeth that has accompanied the debate over health care reform, it turns out that Americans like their government-funded health care just fine.

Many opponents of a public component to a national health-care reform bill have characterized it as socialism, as a means for the government to gain control over 16 percent of the national economy as measured by gross domestic product.

A new report by Medicare demonstrates the folly of that reasoning and adds urgency to the need for meaningful reform in order to reduce health care costs.

To begin with, the cost of health care jumped substantially to a total of $2.5 trillion in 2009. That amounted to 17.3 percent of the national economy, up from 16.2 percent in 2008 - the largest increase, by percentage and dollars, since record-keeping began in 1960.

Of that $2.5 trillion, $1.2 trillion - 48 percent - was paid directly by the federal and state governments through Medicare, Medicaid, veterans' and children's programs.

In 2011, according to projections included in the report, direct government spending will account for more than half of all health care expenditures. That is due to the increasing number of people who will become eligible for Medicare, the impact of recession-driven high unemployment on Medicaid children's insurance enrollment, the withdrawal or reduction of private insurance as a benefit by more employers and the rising costs of veterans' health care.

Even that public contribution to the overall national health care bill is understated, however. Because government employees are enrolled in private health insurance plans, the costs of those plans to the government are not counted as the public's cost. But the employer's share of premiums is paid by the government from public funds, adding it to the total public bill for health care.

The Federal Employee Health Benefits Program alone provides coverage for more than 4 million enrolled federal government employees, with the government paying about 70 percent of the premiums and employees picking up the rest. The federal health insurance bill for its employees is about $25 billion a year.

And that's just the federal share. All state and local governments also are employers that use public funds to pay private insurance premiums for government workers. When all of that is considered, federal state and local governments - taxpayers - already pay for far more than half of the cost of American health care.

Within five years, according to the projections, health care spending will be more than 20 percent of the U.S. economy.

The current health care debate began because the United States cannot sustain the current level of health care spending, which is far higher as a percentage of gross domestic product than in any other nation.

That is why health care reform will remain necessary regardless of what happens to the stalled bill in Congress. Taxpayers already pay for more than half of the bill. Total spending will increase exponentially unless the government uses its power not just to write the check, but to better control costs through comprehensive reform.

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4 posted comments

If you have never written your Representatives in Congress before, now is the time to send that first letter. Let them know that you support health care reform, with a public option (medicare for all), and that they should use reconciliation to get it passed, if need be. The G.O.P. may say they want bi-partisan negotiations, but their actions are saying something else. The insurance industry will continue to put profits before people, unless forced to reform.
We do not need 60 votes, in the Senate. A majority is 51...
Let them filibuster, just be sure to broadcast those antic live.
The constant exposure of bad conduct, will cause unmeasured damage. Every filibuster ends, and then the majority votes.
A majority is 51..lets forget that "Super majority," chant.
It is a G.O.P. smokescreen.
Write that letter. Call them. They were elected to serve the people, and the people demand action.

Let's get fired up again.

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Democrats United,  02/08/10 8:02
I do have health insurance per se. However the deductables and co-pays are so high that it impossible to use so I cannot afford to see a doctor. The insurer also has the option to raise premium rates if I must use it. It is like throwing money away. The problem is that I can not afford to be without it and I can't change carriers because of a pre-existing condition. This, in my opinion, is why the Republicans shoot down every attempt to reform healthcare because it might cause big insurance to actually provide coverage instead of taking premiums for virtually no coverage at all. It seems that the Republican party still supports only big business and the wealthy. The common man can just get ut of the way. They still don't get it, do they?
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Dunn,  02/08/10 11:30
SueA. Recent increases in health care costs support your position. The health insurance industry knows its days are numbered, so it seems they are invested in hastening their demise. If they had any sense they would set out to prove they can rein in costs. Instead, they jack them up. It's time to put them out of business, since their business is feeding off the collective pain of the American people. We need to end this travesty.
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reality bites,  02/07/10 8:03
Rep. Wiener (D), as a response to the G.O.P.'s supposed anger over the government being involved in health care, proposed a bill that eliminated Medicare and other government run health programs. Of course, the G.O.P. was outraged. Seems they like Medicare, it is a sacred right of those 65 and over, no tinkering with medicare. Well, why would it be such a stretch to allow others to subscribe, and buy into medicare.Why not allow those 55 and over to buy medicare coverage, how about the young adult no longer on his/her parents' insurance, or those with pre-existing conditions who can get, or can not afford the premiums, of private insurnance. How about those who make too much for Medicaid, but too little to afford private insurance? You see, those who benefit from government run insurance, or are on the government payroll, are happy with their coverage. It is everybody else who is suppose to suffer. We need a single, payer program, until then lets allow our citizens to buy into Medicare.
We can not afford the status quo. Our economy can never recover, if reform does not happen.Sooner rather than later.
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SueA,  02/07/10 12:07