THERE IS NO FREE HEALTH-CARE:
TAX-SUPPORTED MEDICAL CARE

SYNOPSIS:

    Health-care reforms are often promoted as having no cost.
But this is an illusion: Every doctor and nurse must be paid.
The fact that most health-care dollars pass thru back-channels
sometimes gives the illusion that we consumers do not pay.
But we do pay: thru our employers, thru our local taxes,
thru our state taxes, & thru our federal taxes.

    Much of the controversy about health-care costs
amounts to arguing about which box on our pay-stubs
will include the cost of our health-care.
Politicians like to blame others for health-care costs:
Each level of government wants other levels to pay more.
This does not reduce the total cost;
it merely alleviates the criticism for whichever level of government
has shifted the costs of health-care to some other level of government.

OUTLINE:

1.  HEALTH-CARE PAID BY EMPLOYERS.

2.  MEDICARE: HEALTH-CARE SUPPORTED BY FEDERAL TAXES.

3.  MEDICAID: HEALTH CARE PAID BY STATE AND FEDERAL TAXES.

4.  PUBLIC HOSPITALS: HEALTH-CARE PAID BY LOCAL TAXES.

5.  2010 HEALTH-CARE REFORM: THE AFFORDABLE CARE ACT.

THERE IS NO FREE HEALTH CARE:
TAX-SUPPORTED MEDICAL CARE

by James Leonard Park

1. HEALTH-CARE PAID BY EMPLOYERS.

    In the United States of America most health-care dollars
flow from employers to health-insurance companies
---then to the health-care providers.

    Because the employees never touch these specific dollars,
they sometimes operate under the misconception
that such health-care is FREE.

    But employers know better:
Every company that provides health-care benefits
pays a significant amount of money each month
to cover the health-insurance of every employee.

    In round numbers, this is about $12,000 per year
for each employee covered.
When a whole family must be covered by one employee,
then the cost is obvious higher,
depending on the number of people in the insured family.

    Employees never touch this money;
it is paid directly by the employer to the health-insurance company.
And since they never see it, they might ignore this stream of money.

    But if employees were required to pay for their own health-care,
they would be much more aware of how much it costs each year.
And when an employer adjusts health-care as a fringe benefit,
there is usually a corresponding adjustment
in the amount paid to the employee for the work performed.

    In other words, the employer must consider the cost of health-care
as a part of the cost of having each employee on the payroll.

    And because health insurance is paid by the employer,
it is not taxed as income to the employee.
The worker never sees this stream of money
and the worker pays no taxes on this $12,000 (or more) per year.

    When the employer pays for health-care, it is not free.

3. MEDICAID: HEALTH CARE PAID BY STATE AND FEDERAL TAXES.

    There are well-known gaps in Medicare coverage,
which can be filled in by payments out of patients' pockets.
And for the very poor, these gaps are filled by other levels of government.
The largest of these programs is called "Medicaid" on the national level.
The money behind the scenes here is a combination
of money paid in state taxes and money paid in federal taxes.
Each state has a specific name of this health-care for the poor.

    Neither Medicare nor Medicaid is free.
Both are supported by taxes paid by the people who are working.
Thus, these should be called "tax-supported health-care".
During all of the years of our working lives,
we have money deducted from each pay-check
in order to keep both of these programs operating.
And our employers have also paid specific amounts each month
into the various state and federal funds that support Medicaid.

4. PUBLIC HOSPITALS: HEALTH-CARE PAID BY LOCAL TAXES.

    On the local level, in the United States,
we have tax-supported local health-care systems.
These are supported by another tax little noticed by most of us:
Property taxes due on all real estate in any taxing district
are collected for roads, schools, & public health. 
We would have to read the details of our property-tax statements
to discover how much we pay for health-care at the local level.

    And since most people pay their property taxes indirectly
—as an item included in their monthly mortgage statement—
this cost is even more hidden than other taxes.
We generally think of these costs as just a part of owning a home.
People who get health-care at public hospitals
do not have to pay if they have no money.
Anything not directly paid by the patient
is paid by local property taxes:
There is no free health-care. 

5. 2010 HEALTH-CARE REFORM: THE AFFORDABLE CARE ACT.

    In 2010 a new federal law was adopted in the United States,
which makes more shifts in the ways money flows
from the taxpayers, wage-earners, & their employers into health-care.
Millions of additional people are included for the first time.
But the means of paying for health-care remains in the background.
It is still be very difficult to calculate how much money
is going for the health-care of any individual.

    Because this health-care reform includes few measures to control costs,
the total cost of health-care for each individual is likely to climb steadily.
When enacted in 2010, this total cost per person was about $8,300.
And within a few years, the cost rose to $12,000 per person.
This amounts to 20% of the American economy.

    Some of the provisions of health-care reform might be changed.
And the huge increased costs to the taxpayers and employers
are likely to be a major factor in such future changes.
The illusion of free health-care will disappear as the money is collected.
Each and every dollar spent in providing health-care
must be collected from someone,
somewhere in our complicated money-flow systems.
There is no free health-care,
only hidden ways of collecting and paying each dollar.

    As we uncover the hidden rivers of cash, we will ask:
Is this the best way to pay for our health-care?

AUTHOR: 

    James Park is an independent writer living on social security.
All of his health-care costs are paid by a combination of Medicare
and various state and federal programs to fill the gaps in Medicare.
He does not know how much is paid out each year for his health-care.
And he does not know the various pathways this money takes
as it makes it convoluted ways from the taxpayers
to his ultimate health-care providers.

    Much more about him will be discovered on his website, linked below.

    Some related essays on health-care are listed here:

Nine Ways to Reduce Health-Care Costs

Voluntary Rationing of Health-Care

Medical Futility Monitor:
Avoiding the Million Dollar Death

    These and a few other essays
have now been collected into a free book called:
Controlling Health-Care Costs.
 

Created 3-4-2010; Revised 4-3-2010; 11-3-2010; 2-24-2011; 4-13-2011; 
4-22-2012; 9-13-2013; 5-2-2014; 1-24-2015; 9-29-2016; 4-5-2018; 10-2-2019; 8-14-2020;