03 May 2007

Understanding healthcare financing

I've been waking up mornings thinking about this powerpoint slide from AMSA. Except I didn't remember it was from AMSA — the American Medical Student Association, a strong supporter of single-payer.

Check out their powerpoint presentation page, and click on "Overview of the U.S. Healthcare System" for the powerpoint source for this slide -- and it's far better seen that way.

Note the arrow that goes to individuals/businesses from the government — that's the $100 billion in tax subsidies for employer-based insurance. Employees, through those subsidies, receive health benefits as a tax-free compensation, and employers can deduct the cost of the benefits because they're a cost of doing business.

Also note the government payments to private insurers — for the health benefits of millions of public employees and their families. The subsidies and the payments to private insurers are two elements of government funding that often get left out of people's conception of what the government pays for.

Now see how easy it would be to just eliminate the "private insurers" element of the diagram. Just erase it — so that the arrow coming from individuals/businesses went to the government instead. Much simpler diagram, eh?

That's what single-payer would look like.

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