Yes, the government will save money by providing universal health care. How it works is easy to understand — at least for those who try to comprehend both sides of the story. It all starts with something akin to a quote from an old motor oil commercial: “You can pay me now, or pay me later." It really isn’t that much different from investing a little now to avoid paying (or at least not receiving) a lot more later.
The government needs funding in order to operate. Taxes, like death, are a part of life. The more taxes a government takes in, the more that government is able to do. But when the country’s citizenry have a lower income (or a static income that does not rise in proportion to inflation), the government will take in less taxes, and that hurts the government’s ability at all levels — federal, state, local — to provide essential services such as fire, police, schools, roads, judicial systems, military. The list is almost endless.
Conservatives like to say that government is the problem, but without government protection and regulation and provision of essential infrastructure, business dies. I repeat — without government protection and regulation and provision of essential infrastructure, business dies. It becomes a vicious circle: less business means fewer jobs which means less ability for the government to enable business. Unless business takes responsibility for providing all of that protection/regulation/infrastructure a la the British East India Company, business needs to make sure the government has enough money to do those things.
What does this have to do with an overall financial benefit from universal health care? Patience — I’ll get to that.
Conservatives also like to point out government inefficiency. How is it, then, that if government is so corrupt, that Medicare operates quite well, taking care of the hideously expensive health needs of the elderly and disabled, with only a 2% administrative overhead, while privatized health insurance agencies — which tend to care for the healthier (and less expensive) segment of the population — average a 26% administrative overhead?
Where, then, is the greater inefficiency? Medicare (caring for the least healthy) with a 2% admin overhead, or private insurance (caring for the healthier segment) with a 26% admin overhead? Will somebody please explain the logic of this?
And then conservatives decry government corruption — despite the 2%-to-26% disparity illustrated above. If Medicare’s so corrupt, then how about we look at their government-mandated salaries? It’s only from 2003 (the info’s not easy to find), but this article shows that at the time, the administrator for the Centers for Medicare and Medicaid, their top officer, made $134,000 a year, while the CEOs of the top 25 HMOs all make at least seventeen times that much, and at the top, make well over one hundred times the salary of the administrator of Medicare and Medicaid! And that’s before we get to corporate perks like resorts and private jets.
So where, really is the corruption? In the maybe $200K per year government administrator of Medicare and Medicaid? Or the $29 million per year of the CEO of the Oxford Health Plans?
Alright. So how, then, does universal health care save America money?
It’s really easy, if one will think it through. I’ll use my family as an example. If we had not had either military health care or a very good private health insurance plan, my wife’s three emergency room visits and subsequent surgery would have cost us tens of thousands — and there’s no way we could have afforded that! With no insurance, we would have been forced into bankruptcy. Even if we’d had private insurance, that’s no guarantee we’d have been able to avoid bankruptcy, because half of all bankruptcies are due at least in part to health care expenses, even when 68% of all who filed bankruptcy already had health insurance!
So if we had been forced into bankruptcy, not only do we lose our livelihood (the medically-fragile children we care for), but we lose our house and in all likelihood would be forced to live in section eight housing, again at government expense. Not only that, but we now have a substantial income, and we provide jobs for eight other people. They, too, would lose their jobs, so not only would the government receive far less tax income from my family, but they would receive less tax income from our employees.
On top of all of this is the increased burden placed on the government and the taxpayer whenever anyone falls below the poverty line.
Can America afford more taxes? After all, the Republicans love to point out how America has the second-highest corporate tax rate in the industrialized world. What they don't point out is how even the Bush administration admitted we have the second-lowest effective corporate tax rate in the industrialized world (see page 42 of this report). They also don’t want to admit that, according to this GAO report, thanks to loopholes, write-offs, and subsidies, most corporations pay no income tax at all, and many even get rebates!
Compare that information to when our economy was the envy of all the world in the 1950s, when corporate tax rates were 52% of all corporate income over $25,000 (and 30% for corporate incomes $25,000 and under)! The conservative drumbeat that tax cuts are the cure for all that ails us is a lie wrapped in a willful ignorance of history.
In summary, taking care of the health of the population really is a matter of “pay me now, or pay me later.” The government (i.e. the taxpayers) will pay – either up front with universal health care, or in the end by having a greater burden on the government not only to provide for those forced into poverty because they couldn’t pay (or their private health insurance couldn’t or wouldn’t pay) for their health care, but having to do so with a lower level of tax income from those who were forced into poverty.
For conservatives who are so eager to say otherwise, first explain why, if government is so inefficient and corrupt, Medicare and Medicaid (caring for the most expensive — the elderly and disabled) operates at one-thirteenth of the admin overhead that private health insurance companies do (even though they cover the healthier segment of the population), and the guy in charge of Medicare and Medicaid works for just over one-twentieth of the salary of any CEO in the top 25 HMOs.
And while you’re at it, explain how just having the option, the freedom to choose government-run health care is a bad thing, considering the disparities above. After all, if the private health insurance companies can’t stand a little competition, then how else are they going to learn to provide health care as cheaply and as efficiently as the government of the United States? I say it’s time for them to see if they can walk the walk, instead of just paying off politicians to talk their talking points.