We Are Paying Others’ Costs – Whether We Like It or Not
Financially, we are all in this together, sharing each others’ health costs through insurance and taxes. If we want lower health costs, we need to help other people become healthier:
- The healthy pay for the unhealthy. Take two people on the same private health insurance plan: the healthy enrollees cost their plans much less—but they pay the same premiums and the same co-pays (and the same taxes) as the unhealthy enrollees with high annual chronic disease costs.
- The taxes we pay subsidize others’ chronic conditions. Our taxes get aggregated to reimburse everyone’s current health care costs, who is in a public plan—whether Medicaid/AHCCCS, the military, the VA, government employment, the ACA (“Obamacare”), Medicare, etc. Those costs are driven overwhelmingly by chronic disease. (Even with Medicare: while the feds track how much each of us pays in Medicare taxes & premiums, those payments don’t go into our own Medicare account—they are used to pay for current Medicare enrollees’ health care costs.)
- Private health insurance and health care costs would be much less expensive, and public health care costs much higher, if Medicare and Medicaid were priced at their “true” costs. Instead, much lower reimbursements of Medicaid & Medicare services cause “cross-subsidization” by health care providers & plans, from employers’ & employees’ private health insurance to Medicaid & Medicare.
- The insured subsidize uncompensated care for the uninsured. Health care services delivered by health care providers, for which they are never paid, create a significant burden for those of us who are insured. Many of the uninsured effectively get their health care through hospital Emergency Departments—a very expensive approach. The rest of us then end up paying for that care—passed through to us via health care providers higher fees, which are reflected in our higher health insurance premiums & co-pays and via higher out-of-pocket costs…not to mention taxes.
- Yet all of those health-related costs would be much lower, if more chronic conditions had been prevented with more activity, healthier nutrition, and better stress management.
- [Note: there is a misconception that the aging of America is driving the increase in our health care costs—but it actually only accounts for about 12% of health cost increases.]
Make no mistake: ultimately, individual employees, business owners & other employers, and current & future taxpayers, end up picking up the entire health bill of the country.
And those with healthier habits heavily subsidize those without them.
The bottom line for health costs: no individual or employer (or state) can escape others’ chronic diseases and related health care, fiscal & economic costs.
We are all in this chronic disease epidemic together—AND we all have major school systems in our states. So let’s work toward common school-based solutions as a foundation for the future.
Healthy Students Healthy States gets us there.