Home Invites Members Groups Events Careers Videos News Photos Blogs Polls Singles Forums Chat
Home > News > Post Content

Who Pays for Healthcare Might Surprise You (3896 hits)

Eight million people have signed up for private, often subsidized health insurance under the Affordable Care Act, President Obama said this month. Millions more obtained new coverage through the Medicaid program for the poor.

Full implementation of the health law, and its wider coverage, new taxes and shifting subsidies, has renewed discussions of winners and losers, makers and moochers.

Here's a corrective to common misconceptions about who pays for healthcare.

1. Before Obamacare we had a free-market healthcare system
Government has been part of the business of medicine at least since the 1940s, when Washington began appropriating billions to build private and government hospitals. The drug industry and its customers owe much to federally funded research.

Of course, Medicare for seniors and Medicaid for the poor, which both began in the 1960s, represent direct government transfers from some taxpayers to others. States have set rules for health insurance for decades.

If you're insured through an employer that files an income-tax return your coverage is heavily subsidized by the feds. Tax deductions for private medical coverage cost the Treasury $250 billion a year.

Some would argue that private health insurance is its own kind of subsidy. What the healthy pay in premiums finances care for the sick. Few patients except foreign potentates have paid their own medical bills for a long time.

2. I fully paid for Medicare through taxes deducted from my salary.

Scholars at the Urban Institute have calculated that the typical Medicare beneficiary who retired in 2010 will cost the system more than twice as much in health costs as she and her employer paid in Medicare taxes.

It's another subsidy. If Congress had designed Medicare to pay for itself rather than add to the budget deficit every year, payroll taxes would be far higher and your take-home pay would have been far lower.

3. Premiums from my paycheck fund my company health plan.

Probably not entirely. Or even mostly.

For family coverage, which costs an average of $16,351 last year, the average worker paid only 29% of the premium. For single-person coverage, workers paid only 18% of the (lower) total cost.

Although premiums and out-of-pocket costs have been soaring for consumers, costs have been rising for employers, too -- up by nearly 80% in a decade. Business spends more than half a trillion dollars annually on employee healthcare.

4. Government and employers pay for almost all healthcare.

But give workers and consumers credit. In 2012 households still paid the largest single share of health costs, according to federal actuaries. Part was premiums paid through employers and directly to insurers. Part was out-of-pocket expense.

The household portion of the health-spending pie shrank from 37% in 1987 to 28% in 2012. But it's still larger than the federal government's 26% share or business's 21%.

5. The insurance company is always the bad guy.

Human resources pros like to trash-talk the company's insurance plan when they tell employees the doctor network shrank, the deductible rose, or certain procedures aren't covered.

But more than half of all workers with health coverage are enrolled in "self-insured" plans where the employer pays medical bills directly. The insurance company only processes claims.

If your company has at least 500 workers, it is probably self-insured.

In such plans the employer is the insurance company. And it's the employer calling the shots.

Clarification: This article was updated to clarify that not all of the 8 million people signing up for new health coverage received subsidies.


This article, which was produced in collaboration with USA Today, first appeared April 30, 2014 and was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
Posted By: Jen Fad
Friday, May 2nd 2014 at 9:31AM
You can also click here to view all posts by this author...

Report obscenity | post comment
Share |
Please Login To Post Comments...
Email:
Password:

 
More From This Author
Bobby Womack, Legendary Soul Singer, Dies At 70
EVA MARCILLE GRANTED FULL CUSTODY OF DAUGHTER AFTER ALLEGED PHYSICAL ALTERCATION WITH KEVIN MCCALL
Marriages… Made in Heaven? Really? #22
South Carolina Panel Passes Bill to Ban Abortions After 20 Weeks Because Babies Feel Pain
Boxer Floyd Mayweather: My Fiance’ Aborted Our Twins So I Dumped Her
Where Is Flight MH370?
Human rights body tells Egypt to suspend death sentences of 529 Morsi supporters
Report Released on FLight MH370: Officials Waited 4 Hours to Launch Rescue
Forward This Article Entry!
News Home

(Advertise Here)
Who's Online
>> more | invite 
Black America Resources
100 Black Men of America
www.100blackmen.org

Black America's Political Action Committee (BAMPAC)
www.bampac.org

Black America Study
www.blackamericastudy.com

Black America Web
www.blackamericaweb.com

CNN Black In America Special
www.cnn.com/blackinamerica

NUL State of Black America Report
www.nul.org

Most Popular Bloggers
agnes levine has logged 69107 blog subscribers!
dea. ron gray sr. has logged 60653 blog subscribers!
tanisha grant has logged 27384 blog subscribers!
rickey johnson has logged 6974 blog subscribers!
minister jazz' thomas-jones has logged 5946 blog subscribers!
>> more | add 
Latest Jobs
Health & Life Sciences Fellow- Women's Health with Gates Ventures in Seattle, WA.
Adjunct Instructor, Electrical Utilities and Substation with Danville Community College in Danville, VA.
Adjunct Instructor, Electrical/Electronic Engineering- Soldering with Danville Community College in Danville, VA.
Early Childhood Enrollment Navigator with Danville Community College in Danville, VA.
Capital Investment NMTC Compliance & Loan Closing Manager with Primary Care Development Corporation in New York, NY.
>> more | add