Friday, November 16, 2012

America Really Doesn't Have Health Insurance

America really doesn't have health insurance. The definition of insurance is as follows (here):
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
By definition, insurance is a voluntary contract and coercion should never a factor, otherwise it's not insurance but government force and taxation. Folks voluntarily choose to purchase insurance for various purposes to mitigate against unforseeable catastrophic events like an automobile accident or the house burning down. Decades ago before government intervened in the healthcare business, America had a low cost world class medical system because folks only bought medical insurance for catastrophic medical events such as a major illness requiring large but unexpected medical expenses. All other routine medical expenses, such as doctor visits and perscriptions, were paid for out of pocket.

But along comes government to destroy a perfectly functional and cost effective and voluntary  healthcare system.  Courtesy of the government, America now has a taxpayer subsidized healthcare system that costs over $1 trillion dollars a year and that's  just for those on government healthcare.

The Old, The Poor, and U.S. Health Care Explained
Medicare and Medicaid combined cost over $1 trillion last year, and health care costs are spiraling....

In 1969, government plus private health spending per capita in America was just 8.2 percent of median income, but that has now risen to over 30 percent, according to a National Institute for Health Care Management analysis of government data.
According to USA Today, 2011 Medicare and Medicaid spending was $554 billion and $438 billion, respectively, here.  Total US healthcare costs are staggering.  A healthcare think tank,, reported that America spent $2.6 trillion on healthcare in 2010, here.  Bloomberg reported that US healthcare spending will top $3 trillion in 2014 and that government funded healthcare accounts for 46% of all healthcare spending, here.

Forbes reported in June 2012 that Medicare premiums collected in the form of payroll tax deductions to fund the Medicare program only covers about a third of the actual cost of Medicare.

The Truth About Medicare Costs: Payroll Taxes Cover Just About a Third

Medicaid recipients don't pay a cent for their benefits.  So here we sit with these 2 monster trillion dollar government healthcare programs and the taxes collected to fund them only total about $185 billion (a third of Medicare spending).  That's a whopper of a gap as well as a cash shortfall of over $800 billion annually.

As Americans are about to learn, nothing is free.  Obamacare was designed accomplish 3 things.

1.  Force folks to pay for mandated healthcare services that they wouldn't voluntarily choose to pay for in a free market if they actually had the option to buy  REAL insurance at free market prices.

2. Create a healthcare system so expensive that more folks will be forced into government run healthcare programs.  It's nothing more a backdoor single payer government run healthcare system.

3. Mandate a slew of new taxes, here, to fund the programs.

Obamacare will hit the poor and middle class the hardest.  The middle class who can afford healthcare will be paying higher healthcare costs in the way of taxes and government mandated insurance costs to subsidize the socialized healthcare system and the poor will be paying taxes to cover at least a portion of all their free healthcare.

More Middle-Class Americans Hit by Obamacare Tax
Of the 30 million Americans whom Obamacare leaves uninsured and without affordable insurance options, 6 million will have to pay the penalty, an increased estimate from 2010.....

Despite claims made by Obamacare’s advocates that the law will help middle- and low-income Americans, CBO’s table reveals that the distribution of the tax falls heavily on those making less than 400 percent of the federal poverty level (FPL)—meaning the majority of this new tax falls on the very people the law was supposed to help. For instance, a family of four making about $24,600 per year, the projected FPL in 2016, could be subject to this egregious tax penalty.

Regardless of whether or not these 6 million Americans want health coverage, they are going to pay a hefty tax and still won’t have it. Moreover, the individual mandate tax is only one of Obamacare’s 18 new or increased taxes and penalties that will cost Americans $836 billion over the next 10 years.
According to website of the White House, here, federal revenues and expenditures are as follows but the government doesn't even seem to know how much it collects and spends as evidenced by the figures being estimates.

Year      Receipts     Spending
2011     $2,174        $3,819   Estimated
2012     $2,626          3,729   Estimated
2013     $3,033          3,771   Estimated
2014     $3,333          3,977   Estimated

It's clearly evident that the government government is anticipating a windfall in Obamacare tax receipts and collections.  Meanwhile, the IRS is beefing up its staff to collect all these new taxes.

How many, exactly? Numbers range from 2,700 to 16,500:
The IRS says it is well on its way to gearing up for the new law but has offered little information about its long-term budget and staffing needs, generating complaints from Republican lawmakers and concern from government watchdogs.
The IRS is expected to spend $881 million on the law from 2010 through 2013, hiring more than 2,700 new workers and upgrading its computer systems. But the IRS has not made public information about its spending plans in the following years, when the bulk of the health care law takes effect.
Not surprisingly, the US has the most expensive healthcare system in the world and by a wide margin. Moreover, the US healthcare system ranks 37th in performance and quality.

U.S. health care: Highest in the world in cost, 37th in performance. This system has already been declared guilty.
The health care system in the U.S. is 40% more expensive per capita than the next most expensive OECD developed countries

As a country, approximately 18.2% of our GDP is devoted to healthcare spending. Switzerland and France (#2 and #3) spend respectively 12.3% of 12.0% of their GDP for health care. The U.S. spends the second greatest amount of GDP for health care among all members of the United Nations, topped only by East Timor.

For its money, the U.S. obtains health outcomes that are near the bottom of the OECD rankings, and, in fact, rival some of the outcomes of Third World countries.
Americans seem to overpay for everything because our entire economic system is based on corporatism, oligarchy, fascism, statism, socialism, political corruption and rent seeking cronyism.   Meanwhile, Americans will happily cling to their delusion that healthcare is free.


What the hell are we paying for?  God only knows but whatever it is, it's hugely expensive and there is definitely no bang for the buck.  The health of the American people are the first victims.


  1. I really enjoyed your excellent article.There are several factors that could play an important role in determining the best health insurance. Keep sharing such knowledgeable post. Thanks…

  2. There is a physician who has made a serious attempt at explaining the true cost of health care. Speaking as a physician myself of 32 years, to the best of my reckoning, he tells the truth. This link will open your eyes and should Obamacare implode in the next few months, it will give you a reasonable estimate of what the fair market value is of services rendered.


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