Universal Healthcare - What does it cost?

California's penalty-for-being-uninsured universal healthcare proposal is dying in committee. Liberals argue that single-payer healthcare (socialized, or government-paid healthcare) is a better choice. Democratic presidential candidates say they want universal healthcare for the entire country. So what does that cost?



I have seen insurance advertised at $300 a month for a couple in their 30's. Since children need shots and get into accidents, and seniors need hip-replacements and heart surgery, $150 a person sounds like a nice, if especially low, average assumption. (Under the proposed healthcare reform bill, the State was estimating costs at $250 per person/month, which was considered an unrealistically low assumption.)



California's population is 36,457,549, according to wikipedia. At $150/person/month, that works out to $5,468,632,350 per month, or a mere $65,623,588,200 per year ($65.6 Billion), or more than half of the State's ~$103 Billion combined annual income/sales/property taxes.



The population of the United States is 301,139,947. At $150/person/month, that works out to $45,170,992,050 (thats Billions) per month, or $542,051,904,600 per year. Thats $542 Billion per year. To put that in perspective, our GDP is $13.86 trillion (CIA World Factbook); universal healthcare would consume 20% of the Federal government's $2.7 Trillion budget.



Physicians for Guaranteed Physician Income - I mean "for a National Health Program" - says we spend $7,129 per capita, and that 31% of that money is spent on "private insurance bureaucracy and paperwork." So, if we are addle-headedly optimistic and assume that there will be NO paperwork or administrative overhead whatsoever, we can assume that the cost of providing healthcare is 69% of $7,129, or $4,919/year ($410/mo.) per capita (and, at this price, we have 47 million uninsured, according to PNHP). My $150/mo. figure is crazily low.



In fact, the Kaiser Family Foundation says that "The nations examined spend a median of $2,193 per capita on health care," or $183/person/month. But this is America, the land of ingenuity, so let's assume that we can get our health costs near the bottom of the world average (not because we can, but because I think it's meaningful to realize how much healthcare would cost in an unrealistically low cost environment, and then to consider that realistic costs would be much, much higher). American physicians earn roughly twice as much as doctors in socialized-medicine nations (even adjusted for relative wealth in nations being compared), and physician's salaries have risen "about twice as fast as the average increase for other full-time workers," due, at least in part, to doctor shortages. So you can realistically double my low-ball estimates of costs, possibly more if we don't ration care.



So let's try a new assumption. Using PNHP's $7,129/person/per year minus the claimed overhead of 31%, we get $410/person/month. Let's assume that we can develop greater efficiencies, and ration care, and basically stretch that $410 per person to cover the 47 million uninsured. How much would that cost?



At $410/person/month, California would spend $14,947,595,090 per month, or a $179,371,141,080 per year ($179.4 Billion), or more than the State's ~$103 Billion combined annual income/sales/property taxes. In fact, "California currently spends $36 billion per year on health care for low income Californians," according to California Senator Dave Cox's January newsletter.

At $410/person/month, the United States cost works out to $123,467,378,270 per month, or $1,481,608,539,240 per year. Thats $1.48 Trillion per year, more than half of the Federal government's $2.7 Trillion budget.



Maybe cost-containment would be a better starting point than providing free care to everyone.