The US Healthcare system costs about 18% of GDP which is about twice the cost of what it is in every other developed nation. That’s with the US having a very high GDP per capita compared to these other nations which should be a mitigating factor.
There are 3 primary reasons we are currently stuck with a unsustainably expensive system:
Cost insulation, employment, and perception.
This cost is largely insulated from the average citizen because:
- Employers pay a large portion of the health insurance premium up front and this may not be evident to the employee
- The premiums are pretax money which falls outside the average person’s attention. Imagine the difference in perception, and potentially outrage, if the average person had to pay health insurance just the same as their car insurance.
- It is divided among premiums, the government, deductibles, copays, etc. Several of these can be painful for a family to absorb but spreading them out still obfuscates the true cost of the service.
To grossly oversimplify things but still provide perspective of the cost of healthcare relative to other taxes:
The median income is 36,000 a year and the median household income is 68,000 a year. The effective tax rates on a person making $36,000 a year would be 7.32% Federal, 7.65% FICA, and 3.63% state for a total of 18.60% or about $7,000 a year. That is funding the federal government, social security and medicare, and their state taxes for an equivalent amount of funding their healthcare before they retire. Meanwhile, the average yearly single premium is $3600 and average yearly family premium is around $9000. This is 10% of the single median income and and 13% in the household example.
The employment situation is difficult because of amount of unemployment potentially created. We have a complete administrative system that is itself the waste, when you fix the waste you kill those jobs.
Obamacare limited the health insurance industry to 20% of healthcare costs. That means that a fifth of the GDP is in healthcare and a fifth of that is in health insurance, so 4% of the economy would be potentially unemployed overnight by a universal healthcare system. That is a huge political problem and it is understandably directing the substantial number of those employed by this industry to vote in their best interest.
“Socialism” is a long weaponized word and it has been used effectively to maintain the status quo in this case. America overall is wealthy enough to waste 10% of its GDP and that is evident by the lack of action by average citizens. Since there is no significant pressure from those that would benefit, the only way to improve is seen as in direct conflict w/ traditional American capitalism, and negative short term political implications it is no easy to see how this discussion is decades old with little to no progress.