National Healthcare – At what cost?

As talk continues of national health care as a solution to unaffordable insurance I got to thinking. Has anyone ever really taken the time to figure out just what our existing national health care system costs?

I subscribe to an HSA through my employer which costs me about $312 per month for a family of four plus another $150 or so a month in HSA contributions, which go towards my retirement and future medical costs. I had the option of a non HSA plan but the way the math worked (yes I took the time to analyze my options as everyone should) it cost a few dollars more than the HSA assuming I actually met my deductible. I don’t anticipate meeting my deductible this year and expect to bank $1,800 in savings on account of it with no impact to the quality of my health care.

As part of my annual health care search I found, as I had last year and the year before, that private insurance was available despite the fear mongering from our politicians, albeit for slightly more than my employer plan cost and without the guaranteed money losers for insurance companies like maternity coverage.

Consider the absurdity of insurance covering maternity for a moment. If you have four kids at a covered cost of $10,000 each and an employer health care cost of $400 a month the insurance plan would need to retain you without any additional expenditures for over 8 years just to break even on you. That’s not insurance, that’s making your neighbors pay for your children through their health care premiums. Even with the modern standard of 2 children the company would need 4 years without expenditure to make up their loss. How many of our employers maintain the same insurance plans year to year, forget for four or eight years running. Is it any wonder private insurance has gotten so expensive?

Back to the real cost of our existing national health care, also known as medicare, medicaid and SCHIP. I did a google search to try to identify if a well known source had data in an easily usable format and found that the Kaiser Family Foundation not only had data but had done similar reports. Unfortunately I found that I couldn’t rely on the KFF data because their reports were dated and appeared to be over reporting subscribers by double counting some who are enrolled in multiple programs and under reporting expenses by not including all the expense items as attributable to subscriber.

Undaunted by this I pressed on and entered the confusing world of HHS.gov. The Centers for Medicare & Medicaid Services found at http://www.cms.hhs.gov archives, in a typically confusing and undocumented government fashion, all the statistics related to SCHIP, medicare and medicaid.

Also as is fashionable in government data there is a significant time lag between complete sets of data and today with the most recent complete data picture being from 2006. The simplest and most concise single resource for this data is the capital market updates CMS statistics report for 2007. While 2008 is listed and should in theory give a complete picture for 2007 sadly the data links are broken.

This CMS statistical data (pg 10,15) gives a total enrollment in all three programs of 90,100,000. When duplicate enrollments are removed (pg 15), meaning if a person is enrolled in a combination of medicaid, medicare and SCHIP they are counted only once, the total enrollment figure for 2006 falls to 59,400,000.

The data shows (pg 26,27) that the total 2006 outlay for all three programs was $707,500,000,000. There was some $52,400,000,000 in “offsetting receipts” such as premiums which made for a net cost of $655,100,000,000. I should mention that roughly 150 billion of this net is paid out of state budgets which makes it easy for these various reports to pretend the additional expenditure isn’t there.

Based on the enrollment figure above the annual per subscriber cost works out to about $11,028 or $919 per month. Now, consider that this is per subscriber and so the total cost for my family, a family of four, would be $44,112 a year or $3,676 a month, only $3,364 more than I currently pay each month.

Do we really want to be on the national health care roll? Maybe this private insurance stuff isn’t as bad as it’s made out to be.