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I pay $27,000 a year for lousy health insurance


Eric Levitz points out that Joe Biden’s framing of the health insurance debate is straight out of the traditional right-wing playbook:

As the right-wing Mercatus Center (accidentally) revealed last year, under one plausible model, Bernie Sanders’s Medicare for All plan would cost the U.S. $32.6 trillion over a decade — while simply maintaining our existing health-care system would cost $34.65 trillion. Which is to say, establishing single-payer would save us $2 trillion in national income, while guaranteeing all Americans affordable health care. But it would also require U.S. workers to make compulsory social insurance payments to the government rather than to private insurers.

And for Joe Biden, that’s apparently a deal-breaker. . .

Democrats campaigning on plans that would retain America’s redundant insurance bureaucracies were not asked how they could justify such an extravagance. Under the norms of mainstream political journalism, costs imposed on the American people by the private sector require no justification or defense; only costs imposed by the public sector do. If you are committed to abetting the meteoric rise of private health-insurance premiums, a debate moderator will not ask you to level with the American people about how much your approach to health-care policy will cost them. If you are committed to reducing overall health-care costs by expanding the public sector’s role in medical provision, you will be ritually scolded for the extraordinary (and extraordinarily decontextualized) fiscal price of your program.

As the party that favors higher levels of taxation and public provision, Democrats have an interest in contesting this norm. Biden’s agenda may be less ambitious than Sanders or Warren’s. But he still (officially) aims to raise taxes and increase spending by trillions of dollars. A political discourse that treats taxation as presumptively suspect (even as it treats private rentierism as presumptively legitimate) will not be a favorable one for any Democratic president.

One huge problem with the health care debate is that the absurd and massively inefficient cost of the American health care system is hidden from clear view by various psychological accounting tricks.

For example, until this morning I had absolutely no idea how much I was actually paying for health insurance, because normally I only pay attention to my monthly premium, which is currently $239.50. This is for the second-cheapest of the four employer-provided plans available to me, and covers one other adult and a child. That is still nearly $3,000 per year of course, which is a massive amount for the average CU employee, although not for me because they have to pay me so much to keep me from taking one of the corner offices at Wachtell.

But of course that’s not the real cost of my insurance. The real cost includes the employer contribution, which is $1,511.50. Per month. That money is every bit as much a part of my compensation package as my salary: it’s just that I never see it, because it’s sent straight to an insurance company, rather than to my paycheck (from which my premium is deducted automatically, so I never “see” it, either).

This staggering sum — $21,012 per year! — buys me coverage that ensures that I won’t have to pay anything more for medical care . . . I’ll come in again. That I won’t have to pay more than $15,800 in “out of pocket” costs for medical care this year. Pretty sweet! (ETA: I also pay another $6,000 or so in employee and employer Medicare tax contributions, so that should definitely be tossed into the overall calculation).

So yeah, the prospect of my taxes going up to pay for genuine universal health care coverage for Americans — I think it’s extremely important not to fetishize single payer at the expense of achieving this basic goal — doesn’t exactly terrify me, given that I’m already paying a disguised tax that is approximately equal to the 20th percentile of after-tax household income in this country (This means 60 million people live on that sum, or, usually, much less.) Except, as Levitz points out, I’m being taxed by an insurance company, rather than the government, so Freedom!

And again, there are plenty of people in the building who are being paid a quarter of what I’m paid, but who are still paying what I’m paying for health insurance, which means that a third of their actual compensation package is going to pay for what in any sane advanced society would never be treated as a discretionary expense.

Related: See this fascinating and horrifying story on how people in a Kansas town live in fear of a very real debtor’s prison because they can’t pay their medical bills.

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