Friday, March 26, 2010

Calculating the cost of health care

From the 29 March 2010 Greater Niagara Newspapers

By Bob Confer

The topic du jour for the past week-plus has been the House of Representative’s passage of health care reform. People have been wondering since (and well before that) what they’ll be paying for the health care of others. Before we delve into that it’s important to figure out what you’re paying now in that regard. Grab you most recent property tax bills and tax returns.

First, let’s look at your county/town bill. Refer to the section that reads County Tax. In Niagara County 54 percent of that total pays for Medicaid, the insurance provided to 9 percent of the population who we are told cannot afford medical care. Write down that value which, frighteningly, is more than half of your payment to the County.

Next, move on to your 1040. Determine your federal taxes paid. 20 percent of federal spending goes to Medicaid, Medicare (health insurance for the old) and CHIP (health insurance for the young). So, multiply your federal tax by 0.20. Set the number aside.

Now, determine what you paid to the State of New York. 30 percent of that will go to Medicaid. Tally that up with the numbers you came up with at the local and federal levels and calculate that as a percentage of your total income. I did, and I made the grim discovery that my wife and I had 6.1% of our household income put towards the care of others.

But realize that’s not all of it. Don’t forget that you’re also forced to pay for the health care of nearly all government employees and retirees. If you wanted to figure out what that percentage is you’ve got your work cut out for you, delving through the benefits packages at every level of government from your town to your school to Albany and Washington, DC. It might make that 6.1 percent a devilish 6.66 percent (which would be quite fitting). It may not be a perfect calculation, but it’s pretty darn close.

If you aren’t one of the aforementioned public servants you (and/or your employer) had to pay for your health care. That is, if you could afford to after you paid for everyone else’s first. If you did receive job-based health insurance you probably had to pay a portion of the premium, be it 25, 50, or 75 percent. Depending on the employer contribution and your plan, that could be a pretty penny. Typical insurance packages in WNY are just under $4,000 for single, a smidge under $7,500 for double, and in excess of $11,000 for family coverage. Statistics show that the average family that pays for health coverage puts 22% of its household income towards it.

Now, add your premium payments to what you’re paying for others’ insurance (the quality of which, by the way, probably far rivals what you get from your insurance) and you’re looking at an incredibly massive portion of your family’s income being dedicated to health care…yours and that of someone you don’t even know. And people wonder why most homes can’t survive without two breadwinners.

That value is destined to go up – not down! – with the passage of health care reform. Don’t let Congress fool you when they say the “evil” health insurance, medical equipment and pharmaceutical companies – not you - will foot bill. Those corporations aren’t super-powered like the government; they can’t create money out of thin air to pay the new taxes. They have to get it from somewhere or someone: Namely their customers, you and me.

It won’t be cheap, either. 32 million people will have to become insured. About 25 percent more – approximately 40 million Americans - are already on Medicaid and look at how much that costs us. Just suppose the numbers extrapolate nicely and our new-found payments for this so called “reform” are three-quarters of what we’re paying for Medicaid now. Come 2014 we’ll be paying another extra 3 percent of our income to cover those who were just granted insurance through Obama’s and Congress’s benevolence (using our money), bringing the grand total to almost 10 percent of your earnings.

So, in a few years, if you aren’t one of those who have their health care provided by the government through employment or subsidy you might as well say that one-third of your hard-earned dollars will be spent on health care. It’s enough to give someone a heart attack, so thank goodness you’ll have coverage!

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