Nationalized Health Care Adds Up

From a purely mathematical perspective, nationalized health care should work in America.  Here are the numbers: 

According to the 2000 census, about 70% of Americans were covered by private health insurance, 15% by government health care programs, and 15% were not covered at all. 

Health insurance costs about $13,500 a year for a family of five.  Let us assume that this figure represents the average cost of health insurance for an American Household.  (Since the average American household contains 2 people, this calculation should greatly overestimate the current cost of health insurance in America.)  There are 100 million households in America, more or less, and about 70% of these are covered by private health insurance at a cost of approximately 950 billion dollars.  The total estimated cost of health coverage for every household in America for one year would therefore be about 1.4 trillion dollars. 

If the $13.5K currently spent on health coverage for 70% of Americans were diverted to a national health care system, 950 billion dollars would be available for that purpose.  Remember that this 950 billion is currently spent on health coverage from insurance companies, not on health care from medical facilities.  One can assume companies in the business of health insurance are doing so to make a profit.  Whatever percentage of the 950 billion that is currently profit for these companies should cover the administrative costs of a national health care system. 

Are you with me?  So far we have the same 70% of the population that is currently covered by private health insurance continuing to be covered by a national health care system without any difference in expense, therefore with no need for additional taxes.  Let us also assume that the 15% of the people who are currently covered by government health programs will continue to be covered without consuming more tax dollars than before.  That leaves the 15% of the population that is currently uninsured. 

Thinking optimistically, if the health insurance profit currently exceeds the administrative costs of a national health care system, that profit can be used to take up some of the slack.  But let's be pessimistic.  Let's say that a government-run system would be so inefficient that the costs of running it would exceed the profits of private health insurance companies by 5%.  That means that there would be a 20% shortfall in resources necessary to provide health care to every household in America, or a $280 billion dollar deficit.  

However, we must take into account additional factors.  For example, what does the 15% of the population who are uninsured do when they are sick?  Most of them go to the emergency room of the nearest hospital.  Have you ever seen a bill from an emergency room?  Can you imagine more expensive health care?  And since these people cannot afford health insurance it is reasonable to assume that they cannot pay a big emergency room bill either. 

Who pays the bill for the uninsured?  Everyone who pays to use the health care system, whether through higher health care costs as medical facilities spread the expense across their patient base through higher fees, or through charitable contributions to medical facilities to help the needy.  So it is not as if the uninsured do not currently receive health care or that the health care they receive is free.  

Therefore, let us assume that health care for the uninsured is, in fact, already paid for, but let us continue our assumption that government inefficiency will squander the surplus that should be available from health insurance profits and from mainstreaming patients who currently use the emergency room as their primary source of health care, will fail to institute malpractice reform or other cost-cutting initiatives, and will despite every opportunity to save money will run a national health care system at a considerable deficit, for example, 10%, or $140 billion.  Divided among the 70 million households that are currently covered by private health insurance, that would mean an increased cost of $2000 per year, or a little less than forty dollars a week. 

I don't know about you, but for me, $40 dollars a week is an acceptable price to pay to make sure that every American has quality health care.  Sign me up.