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The Cost The Public Unwittingly Pays

February 13, 2010

Back in when I was in the military, I learned a saying, “there is no need to defuse a bomb that has already gone off.”  For the most part, the current healthcare debate is a bomb that has gone off.  The U.S. government currently controls the majority of the healthcare dollars the nation pays.  The problem we have is understanding this fact due to its complexity.  This complexity allows pundits to twist and mold data to fit any argument the wish to make, resulting in frustration, confusion, and a lack of trust for all concerned.

If you want to upset a group of people, you only need to bring up the subject of healthcare reform.  No matter the group, opposing opinions are bound to exist, opinions, for the most part, based on hysterical news coverage that has little to do with reality.  We become embroiled with arguing over topics as single payer, mandated insurance, and the dreaded “S” word – socialism.  When people are confused, the best choice seems to do nothing at all, maybe this is the true objective of the pundits, to confuse us and maintain the status quo.

In reality, the government directly controls programs like Medicare, Medicaid, and various other more limited plans.  According to the government’s Center for Medicare & Medicaid Services, these programs, and health department budgets account for approximately 53% of our National Health Expenditure (NHE).  The NHE is the total amount of money spent in the United States per year from all sources on healthcare; the 2009 estimate is around $2.3 trillion.

In addition, there is another cost we indirectly pay that adds to the percentage paid with tax dollars and it is hidden from view – healthcare subsidies to businesses.  Businesses in the U.S. enjoy a $200 billion a year tax write-off on the cost of healthcare.  In other words, the U.S. government took in $200 billion less last year than it could have giving big business a break.  Taking this money into account, our government controls about 62% of the total cost paid for healthcare each year.

The problem is not the tax break, it comes from who benefits for the $200 billion – only businesses that provide healthcare.  This means the rest of America subsidizes the healthcare of businesses like General Motors and A.I.G. and the little guy goes without.  This subsidy, in effect, is a Medicaid-style payout.  It is a quasi-tax all Americans pay to the benefit of a few.    The $200 billion loss affects the general revenue, requiring a higher debt level to make up the difference; it adds to our national debt every year.  It is a bad deal for all involved, except big business of course.

In the end, it is not a question of should we have government paid healthcare, we have it now.  The only real debate is in how to create a system that makes sense and benefits all Americans rather than select groups.

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