#Healthcare4All – The American Way

Post by #Healthcare4All team member Megan

Editor’s note: If the video below isn’t working, you can also view it on YouTube by clicking here.

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Many Canadians are proud of the Canadian healthcare system and will boast about how much better it is than in the United States, but how many of us really understand how the American system works? If you check out this video by Aaron Caroll, you can watch him try to explain the American health care system in all of its complexities (or, all of the ones he could fit into 7.5 minutes).

[Transcript available via the link as subtitles]

You may notice how complicated the American system is, and Aaron admits himself that he has a hard time getting all of the key facts to fit into a little video. Comparing it to the video about the Canadian system, I was suddenly very glad that I don’t need to navigate this system. Getting (and needing) health care coverage is stressful enough without trying to determine what you qualify for and finding your own health insurance.

As a reminder, in British Columbia, we all pay monthly premiums for the Medical Services Plan (MSP), which covers what the government considers essentials: doctor visits, hospital visits and emergencies. Then we may get additional private insurance (often through our employer, if we can manage it) to cover prescription drugs, eye care, dental care, and additional services like physiotherapy. MSP is for everyone (even if you can’t afford premiums) and most people add on a private plan.

If you’re in America, you likely need private insurance just to go to the doctor and ask about your cold. Although there are many private insurance companies to choose from, not everyone is guaranteed coverage, unlike with MSP. Private insurance companies can reject you if they don’t want to pay for your medical coverage (like if you have a pre-existing condition like diabetes, which might be expensive). Many people can only afford and/or receive private insurance coverage through their employer. When you receive private coverage, what it covers might vary widely and it’s up to you to a) pay for it and b) to figure out what it’s good for. People’s plans will vary between nothing at all and very comprehensive, based on their personal circumstances.

In the US, you’re relatively on your own, unless your employer takes care of it or you fall into the government program categories that Aaron outlines in the video:

  • Medicare Parts A-D covers people over 65 and some young people with disabilities for things like hospital stays, medical procedures, prescription drugs and other services.
  • Veterans Health Administration covers veterans (go figure)
  • Medicaid is meant to assist people with a low income who are:
  • children (1-18)
  • parents or pregnant
  • seniors
  • some people with disabilities
  • It’s important to take a closer look at Medicaid as well, because in Canada we have taken a drastically different approach and it’s worth highlighting.

First, a low income in the US is defined as the federal poverty level, which is extremely low. It is very difficult to survive on 11,670 dollars a year–that’s what you might make if you worked full time and made just over $5.50/hr. This means that it’s surprisingly easy to make too much money to qualify for Medicaid.

2014 Federal Poverty Levels

Number of people in the household

100%

133%

150%

1

$11,670

$15,521

$17,505

2

15,730

20,921

23,595

3

19,790

26,321

29,685

4

23,850

31,721

35,775

5

27,910

37,120

41,865

6

31,970

42,520

47,955

7

36,030

47,920

54,045

8

40,090

53,320

60,135

What’s even more critical for youth is that people over 18 without children cannot qualify for Medicaid, no matter how poor they are. Adam points this out, saying that “In most states, even the poorest adults without children, even those who make nothing at all, don’t get Medicaid.” What does this mean for youth (18-35)? It means that if you need coverage, you will need to buy it yourself, or make sure that your employer will cover you. When every doctor’s visit is about $100 without insurance – yes, $100 for those 15 minute sessions – getting sick can be terrifying for a whole new set of reasons, other than concern for your health. The cost of health insurance premiums in the United State is, on average, $5,615 a year for a single person and $15,745 for a family of four. Keep in mind, that statistic doesn’t tell you what is or isn’t covered by that cost, as there are many ways to go out of bounds for your health insurance, so you end up paying out of pocket anyway on top of insurance premiums.

Medical Services Plan doesn’t cover everything, but it does cover basics for a relative bargain of $831 a year (if you don’t qualify for premium assistance). That comes to $1506 a year for a couple and $1662 for a family of three or more. If you take a look at the chart below, you’ll see that if you make less than $22,000 a year, you don’t have to pay premiums. That lower limit is roughly twice the amount required in the US–you do not have to so poor to get a little help from the government in Canada. This is an important point about the principles that drive Canadian versus American health care. Canadians seem to see healthcare as a right and a collective responsibility, not a burden for each individual to carry. If you can’t afford it, you get assistance.

Monthly Premium Rates

EFFECTIVE JANUARY 1, 2014

Adjusted Net Income

One Person

Family of Two

Family of Three or More

$0 – $22,000

$0.00

$0.00

$0.00

$22,001 – $24,000

$12.80

$23.20

$25.60

$24,001 – $26,000

$25.60

$46.40

$51.20

$26,001 – $28,000

$38.40

$69.60

$76.80

$28,001 – $30,000

$51.20

$92.80

$102.40

Over $30,000

$69.25

$125.50

$138.50

Unfortunately, the United States doesn’t seem to be getting any cost savings by putting the health care costs on most individuals, and then covering the people with the highest healthcare costs (the elderly, mothers, children and people with disabilities). In fact, the American government covers 1/3 of people, but pays 2/3 of the health care costs (6:19 – 6:35).

Check out John Green’s video (written with Adam’s help) to find out more about American health care costs.

 [Transcript available via the link as subtitles]

In John’s video, we are introduced to more complexities of the system and a variety of reasons why the United States health care is much, much more expensive than other comparable countries. The United States currently spends about 18% of its total revenue on health care costs, but only 28% of Americans can receive their health insurance coverage through government programs. These people are mainly those with very low income, seniors or elected officials (0:50-0:56). Americans actually spend more than anywhere else in the world, but in most states, someone graduating high school isn’t entitled to healthcare support unless they are pregnant, they are a parent or they have certain disabilities. According to John, in the United States, “you pay more in taxes for healthcare than you would if you were British, and in exchange for those taxes, you get no healthcare.”

John also offers some terrifying examples of the cost differences, saying, “A hip replacement in Belgium costs $13,000. In the US it’s often over $100,000. Colonoscopies average over $1100 a piece in the US; in Switzerland they’re $655. And on average a month of the drug Lipitor will cost you $124 if you live in the US. If you live in New Zealand? $7” (1:20-1:40). Wow. John goes into the different contributors to those scary facts, but I want to highlight how this information connects to the Canadian philosophy.

What strikes me as the difference between the American system versus the Canadian one is in the way that collective rights and privileges are divided up. In the US, the risk is on the individual, not the collective, and so each person is forced to find their own health care solutions, rather than investing collectively. There are significant downsides for the individual and the group with this strategy.

John highlights (3:30) the fact that the lack of insurance coverage for many people means that their care is often more expensive, because they don’t have the money to do things to prevent small issues from becoming big issues. For example, maybe someone can’t afford blood pressure medication, so they end up having a heart attack and staying in the hospital, which is much more expensive than the medication would have been over time. This extremely expensive, emergency care is often impossible to pay for–if you can’t buy daily drugs, what are your chances with major hospital visits?–so many people end up bankrupt.

In fact, a recent NerdWallet report found that “To save costs, over 25 million adults (ages 19-64) will not take their prescription drugs as indicated, including skipping doses, taking less medicine than prescribed or delaying a refill” and “In 2013 over 20% of American adults are struggling to pay their medical bills, and three in five bankruptcies will be due to medical bills.” Americans are doing whatever they can to pay their bills and bankruptcy sometimes seems like the only option. Cancer and bankruptcy in the same year shouldn’t be part of the way a system is built.

On the other hand, the public system offers a collective advantage: large-scale negotiating for prices. Negotiating about health care prices isn’t something that an individual can personally do, and certainly not something they’re usually ready to do before major heart surgery.

John emphasizes this issue, “… In the United States, providers charge whatever they think they can get away with, and they can get away with a lot, because it’s really difficult to put a price on, like, not dying. This is a phenomenon called “inelastic demand,” like if you tell me that this drug that will save my life costs $7 a month, I will pay you $7 a month for it. If you tell me that it costs $124 a month, I will find a way to find $124 a month to pay for it. You can’t negotiate effectively on your own behalf for healthcare services because you need them.” (6:08-6:35)

Having the government argue on your behalf seems like a very good idea. John spells out the American issues as he sees them clearly:

“In the United States, we do not negotiate as aggressively as other countries do with healthcare providers and drug manufacturers and medical device makers. So like in the UK the government goes out to all the people who make artificial hips and says “One of you is going to get to make a crapton of fake hips for everybody who is covered by the NHS here in the United Kingdom. But you better make sure your hips are safe, and you better make sure that they are cheap, because otherwise we’re going to give our business to a different company.” And then all the fake hip companies are motivated to offer really low prices because it’s a really huge contract… But in the US we don’t have any of that centralized negotiation, so we don’t have as much leverage. The only big exception is Medicare, the government-funded healthcare for old people, which, not coincidentally, always gets the lowest prices.” (5:30-6:05)

By working together to share the collective cost of health care, we can actually decrease the cost for the individual and for the group. Right now, Canada’s system prioritizes covering as many people as possible at the lowest cost; that’s the Canadian advantage.

If I am sick at home with a flu, I know which country I want to be in: the one where walking into a clinic is part of my right as a citizen, rather than the country where all that matters is my privileges as a customer. It’s this difference in perspective that I think is most critical to keep in mind when you take a look at either system in comparison; we can’t explain a health care model without explaining why it’s run that way. If the answer isn’t what you’d like it to be, then it’s time to re-calibrate. In Canada’s case, we also need to ensure that we protect the principles of our system: access and equality. If we keep thinking of each other, then we can keep a hold of the system that will take care of all of us, not just some of us.

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