Costs and Savings

Summary

Costs

Most Americans will see mainly or only an increase in the Medicare payroll tax.

Savings for All Americans

— No co-pays.
— No deductibles.
— No coinsurance (such as paying a % of hospital stays), no limits.
— No more “payment” in terms of the hardships of bankruptcies, loss of homes, constant worry.

Additional savings for family earning total earned income of $50,000 per year

— Minimum savings, where health insurance is provided by the employer: $10,000 lower costs per year, including the savings in what the employer currently provides for health insurance benefits

Overall Result

The United States, due to its size, will have the lowest risk and will be able to establish the lowest costs, such as for drugs and equipment. Therefore, the minimum expectation for costs is that we will at least be as good as other free-market countries and most likely better. Refer to xxxxxxxxxxxxx.

The Cost

Money Paid without Improved Medicare for All

Before the new law (PPACA, signed March 2010) …

Average premiums, including both the employer and employee portions, were $4,704 for single coverage and $12,680 for family coverage in 2008.

Summary: $12,500 per year (rounded number)
for a family

Money Paid with Improved Medicare for All

Most people will see mainly or only a different amount for the Medicare tax from their earned income.

The necessary tax increase is expected to be a few percent. The resulting total Medicare tax on earned income would then be five percent.

$41.67 per month for every $10,000 of earned income:
$83/month for $15,000/year;
$208/month for $50,000/year.
The median income for a household in the United States is about %50,000/year.
All family members get health care, because everyone is always covered.

Summary: $2500 per year
for a household earning the U.S. median earned income of $50,000 per year
Note: health care is provided by Improved Medicare for All whether one has earned income or not

Hardships

See Hardships

The Savings

There will be a dramatic drop in costs, such as these examples: no co-pays, no deductibles; much lower drug prices due to negotiations and bulk purchasing); no limits; no health insurance company premiums.

Minimum savings for a working family where health insurance is provided by the employer:

$12,500 per year
minus $2,500 per year
equals …. $10,000 lower premium costs per year, including the savings in what the in what the employer provides for health insurance benefits.

No more hardships.

Additional Information

The savings is even higher when one considers that the new law will most likely cause a dramatic increase in health insurance premiums, as noted below, and in taxes.

After the new law (PPACA, signed March 2010) is fully implemented …

Premiums are expected to sky-rocket, as they already did in the State of New York with its stiffer health insurance company regulations.
— range of premiums for health insurance policies for November 2009 for a family:

Health care costs with increased regulations:
$2,882 per month to $4,786 per month for premiums for a family via the NY state website posting (pdf) of rates
plus out-of-pocket costs, such as:
— co-pays … (none with Improved Medicare for All)
— deductible(s) … (none with Improved Medicare for All)
— coinsurance on major medical bills … (none with Improved Medicare for All)

Sources and Additional Information

Sources

• Employer Health Benefits Annual Survey 2008, which is based on a survey of about 2,000 employers.
• H.R. 676 — United States House Resolution 676, the U.S. National Health Insurance Act (“Expanded and Improved Medicare for All”)
• Census report on median income

Government and private economic evaluations that started in 1991

• Economic evaluations of single-payer, both nationally and by state are reported here. As far as I know, the most detailed study of the U.S. administrative costs was conducted by Woolhandler, Campbell, and Himmelstein in their report (pdf) that resulted in the 31% administrative cost associated with the current U.S. health care financing.)

Proposed Financing of Single-Payer

• Defined in U.S. House Resolution 676:
  • Tax on earned income (Expanded and Improved Medicare for All tax of 4.75%)
  • Stock transfer tax of 0.25% on seller and buyer
  • Tax surcharge: 5% on richest 5%; 10% on richest 1%
    
    Also see Single-Payer Education and tax.

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