High costs of health care in the USA

 One of the biggest problems the United States healthcare system struggles with is high cost. This issue contributes to reduced access to care which lead to negative consequences such as increased health debt and poorer patient outcomes. 

Rising healthcare costs creates a burden on patients by making necessary care unaffordable. This leads to delayed treatment, skipped appointments, medical debt, and patients not getting necessary prescriptions due to the cost. If patients are not able to afford healthcare this can lead to worsened chronic conditions and overall poorer health outcomes. Unaffordable healthcare can also force patients to accumulate debt through credit cards, personal loans, or high deductible plans to pay for medical care.

Woo, a young man, who used to live in a run-down apartment in Milwaukee stepped on a nail and refused to get medical help because he couldn’t afford it, according to Matthew Desmond (2024, p. 15). After a few weeks, Woo eventually had to visit the hospital. His foot and leg had a severe infection causing him to get his leg amputated (Desmond, 2024, p. 30). This story is an example of how people may put off treatment due to the cost of care, which can result in chronic conditions and overall poorer health outcomes. 

I believe that in order to improve people’s financial stability, healthcare cost should be reduced. By doing this, people will be able to reduce medical debt and allow individuals and families to afford other necessities. This will also improve public health outcomes by encouraging preventive care and early interventions, resulting in better health for the population.

Reference

Desmond, M. (2024). Poverty, by America. Penguin Random House LLC.

Americans spend about $5 trillion on healthcare.  Or, maybe that figure is up to $5.5 or $6 trillion by now.  That's about 18% of our Gross Domestic Product. 
Presumably, a national health care plan, whether covered by a single payer or whether using multiple different payers (see the German or Swiss systems for examples) would cover something slightly under 100% of costs: possibly 95% of healthcare costs.  And, presumably, there would be increased efficiencies in health care, and that would reduce costs even more, so the cost of a national health care program that covered everyone would presumably be about $5 trillion is we are currently spending nearly $6 trillion on healthcare. With 340 million Americans, that works out to about $14,700 in payments that would be needed for each person in the United States.  So, for a family of four, if the costs of all health care was spread evenly, that family would need to pay $58,800 in taxes to cover their share of health care costs.  That is the average amount each four-person household would need to contribute to a public program that covers nearly all health care for everyone. 

But of course, a health care scheme like this would not distribute costs evenly.  We already cover about 43% of health care spending through Medicare, Medicaid, and the Veteran's Administration. We would only need to raise about another 47% of total healthcare spending if we wanted a universal health care system.  So, taxes would have to gather another $2.9 trillion from the population. 

The 57% of us who receive health insurance through our employers would get a huge windfall (or our employers would), because employers would no longer have to pay for private insurance for their employees, allowing them to pass on what they now pay to cover health care benefits on to their employees as income.  The increased income from health insurance policies our employers are purchasing on our behalf would, for most of us, closely match the required increase in taxes to get federal revenue up by $2.9 trillion. The average health care benefit per employee is about $8,000, and about $19,000 for family plans.  So, with a universal public health care scheme, incomes for the 57% of us now enjoying plans paid for by our employers would increase to mostly offset the increases we would need to pay in taxes. Currently, wealthy Americans (those in the top quintile) pay about 24% to 27% of their earnings in federal and withholding (Social Security and Medicare) taxes.  If those went up to 33% to 40%, this would go far toward raising the $2.9 trillion.  Middle class households are paying about 19% to 24% of their incomes in federal and withholding taxes.  For them, if those tax rates went up to 28% to 33%, this would be enough to cover the universal health care program.  The increases in income from employers passing on as salary the money that had been used to purchase their healthcare would probably cover most or all of the cost of their increased taxes, so that their after-tax consumption levels would be essentially unchanged.