In my debates, I come across quite a few people who are under the impression that more government-controlled health care would save the US money. The reason health care premiums are so high is because greedy CEOs are taking it all in the form of salaries, right? The belief that government-controlled health care would be more efficient is a horrible misconception.
The thing is, the country could save over $200 billion every year just from cleaning out the waste and abuse in Medicare and Medicaid. Barack Obama himself admitted as much. And then government regulation of the private industry adds an additional $300 billion in waste. Elimination of those costs alone could pay for health insurance for 40 million families.
On the other hand, I’ve quite often heard the suggestion that elimination of the for-profit aspect of the health care industry would save enough money to pay for public insurance. What most people don’t seem to realize is that the annual profit margins for private health care insurers hovers around 4%. The total profit of the health insurance industry last year was a mere $13 billion.
Take a minute to let those figures sink in. Private industry costs us $13 billion a year so they can profit, while the federal government costs us $500 billion per year in waste alone. And the solution is to add more wasteful government programs and regulation?
To further drive the point home, let’s take a look at the bigger picture. We are currently spending $2.2 trillion per year on healthcare in this country. $850 billion of that is spent on Medicare and Medicaid to cover 103 million people, and another $184 billion is spent on other government health programs. That means that the government spends 47% of total health costs to cover 34% of the people. Private industry spends 53% of the total costs to cover 51% of the people (pg. 12). Private industry clearly does a far better job of providing efficient health insurance services. And they’d do an even better job (39% of current costs to cover the same 51% chunk of people) if we passed tort reform and cut some of the regulations that raise costs so much.
Why would anyone replace private industry with the inefficient government and expect costs to decrease?