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Saturday, May 6, 2017

We can Afford to cover healthcare for everyone in the country

We can afford health care. We just need to make our wealthy pay their share. The cost per capita of health care is approximately $10,490.00 per capita. Which is a lot. Our gross income per capita is approximately $49,550.00. That doesn't include income from capital gains. If our system were fair to 90% of us we could easily afford healthcare in this country. Unfortunately the bottom 90% of us earn an average of $33,000 and most of the income in our country goes to the top 1% and the top .01%. And since the wealthy make their money from rents, interest and "capital gains" that under-reports their income. The bottom 90% of us cannot afford healthcare without income transfers from the wealthy. Which is why the GOP is stiffing us. Our real issue is our GINI coefficient and oligarchy.

Discussion

I thought I'd run the numbers to put our healthcare situation in perspective. Using 2015 numbers from CMS reports:

“U.S. health care spending grew 5.8 percent in 2015, reaching $3.2 trillion or $9,990 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.8 percent.” [CMS]

That is a lot of money. And probably the amount went up another 5.8 percent in 2016. However, the Census reports:

That the total income in the United States in 2016 was 16,011 Billion Dollars! The population in the United States in 2016 was “323,127,513” [statistica]

So 16,011,000,000,000 / 323,127,513 = 49,550.09$, which is the average of income per capita, not including capital gains or income from stocks, bonds etc... so this under-reports the income of the wealthy. The Census reports median income of $53,889.00 Median income is the level at which half the people in the country make more and the other half make left. If health care costs increased by 5% then 2016 costs would be $10,489.50 per capita. 10,489.50/49,550.09 = 21% approximately of people's gross income. That sounds like a lot, and it is. But this is out of gross income. If incomes were evenly distributed then people would have a net after health care of $39,061 each after distributed health care.

Put another way, if the 3.2 trillion in health care costs were deducted from the 16 trillion in total income without disparate impact on common people, then expenses would come out of the 12.8 trillion left over. But of course incomes aren't even. And those at the top of the income scale may pay their individual share of health care costs, but they don't pay into the costs of the rest of us.

The real problem is buried in the Census. $53,889 median income doesn't represent take home pay! If healthcare costs come out of take-home pay then those who make less than gross.

"One half, 49.98%, of all income in the US was earned by households with an income over $100,000, the top twenty percent. Over one quarter, 28.5%, of all income was earned by the top 8%, those households earning more than $150,000 a year. The top 3.65%, with incomes over $200,000, earned 17.5%."

The bottom 90% of US earned $33,098 gross income. This is gross. For lower end workers healthcare costs are almost 1/3 their gross income. And since we tax the 90% at higher rates than we tax the 1% that means that for low end workers, were it not for subsidies they would be priced out of the markets.

https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html
https://www.census.gov/topics/income-poverty/income.html
https://www.statista.com/statistics/216756/us-personal-income/
https://www.census.gov/content/dam/Census/library/publications/2016/demo/acsbr15-02.pdf

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