​Lowering Healthcare Costs

Written by Sarah Looney

Edited by Marianna C.,
and Andrew D.

From Volume 1 Issue 2 on Poverty in America

     Healthcare, or insurance, is the set of services provided by a country to its citizens to treat the ill (Cambridge English Dictionary). Twenty eight million American citizens do not have healthcare, which means they can not get the medical attention they need. (U.S. Census Bureau). World Population Review, a website that was created in 2011 to follow global population and trends, estimates that the population of the United States is approximately 330 million, which means that roughly 8.4% of the population is uninsured, which is a big problem (United States Population 2019). In just the past year, two million less Americans have opted out of healthcare. While Medicaid seems like a viable option, there are tight premises on qualifying, so not everyone can have it. This leaves many young men, women, and children who are in need of care, but cannot get it.  Keeping in mind that it is quite difficult to qualify for Medicaid, HealthMarkets, an online health insurance company, explains that the average monthly cost for one person’s healthcare is $477 (How Much Does Health Insurance Cost Per Month?). Many people are unable to afford this, as they need the money to buy necessities such as food, clothes, and diapers.  Thus, they cannot easily access tests and treatments. If the cost for insurance was lower, more people would be able to get the help they need. In order to lower the cost of healthcare, the government should allow Medicare to negotiate drug prices, increase payroll tax, and give patients more information on healthcare prices to help them make informed choices.

     Allowing Medicare to negotiate drug prices would decrease the price of healthcare. As explained by the Tennessean, a branch of USA Today, Medicare currently has no control over drug prices (Tolbert). That being said, the government is allowed to choose the prices of drugs. (Tolbert). If Medicare was allowed to decide, the prices would become more reasonable and easier to afford, as their primary malfunction is to help citizens save money in terms of healthcare.  The Department of Health and Human Services, an organization that aims to protect the health of United States citizens, says “as soon as next year, drug prices can start coming down for many of the 20 million seniors on Medicare Advantage, with more than half of the savings going to patients” (U.S. Department of Health and Human Services). This means that not only would they be saving money, they would actually be gaining money too. One argument against allowing Medicare to choose drug prices could be that citizens not on Medicare would have to pay more for their medications, because the drug manufacturers have to make money somehow. However, yet another benefit would be less people going overseas for medicine and drugs and more people buying them here due to reasonable prices. More people buying drugs here would boost the United States economy.  Once the prices of drugs are lower, it will become much easier to lower the cost of healthcare all together.

     An increase in payroll tax would allow the government to lower the cost of healthcare.  As explained by the Internal Revenue Service, commonly known as the IRS, the federal tax agency for the United States, “the current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total” (Topic No. 751 Social Security and Medicare Withholding Rates). When the taxes are added up, the total payroll tax is 15.3%, with 7.65% coming from each party.  According to Choices for Financing Medicare for All: A Preliminary Analysis, imposing a 32% payroll tax would allow Medicare for All (Choices for Financing Medicare for All: A Preliminary Analysis). In this tax, employees and employers would still be splitting the costs evenly. Medicare for All would be beneficial because it means everyone would get the medical care they need. The same source explains that the tax would raise thirty trillion dollars in ten years. (Choices for Financing Medicare for All: A Preliminary Analysis). This money could be used to further add to the benefits of Medicare, such as increased coverage like mental health evaluations. While some would argue that it is unfair to raise taxes on people who are already paying for their own healthcare, the benefits of healthcare for everyone would outweigh it the overall health care costs for all would be reduced.  Once the cost is successfully lowered, information on the prices of different healthcare plans should be shared with patients.

                 Giving patients more information on healthcare prices will allow them to make educated choices on which healthcare plan is best for them. There are people who do not get the help they deserve because they are unaware of it. One such example comes from an article from MarketWatch, a website that advocates for lowering healthcare costs. According to Holly Lawrence, a journalist for MarketWatch and experienced marketing professional, “in Atlanta, it can cost 600% more to have a colonoscopy in one location than another” (Lawrence). Lawrence goes on to explain “the problem is that patients usually don’t know about local price variations because they’re generally not given cost information by health care providers or insurers” (Lawrence). People may not be choosing the best care for them. Recently, Kaiser Health News has begun a monthly publication on healthcare cost. Their first post, written by Fred Schulte, a senior correspondent at Kaiser News and four time Pulitzer Prize finalist, starts with “this is the debut of a monthly feature from Kaiser Health News and NPR that will dissect and explain real medical bills in order to shed light on U.S. health care prices and to help patients learn how to be more active in managing costs” (Schulte). More companies should do the same reviews, so that people will be able to become more efficient at managing costs.  One issue with sharing the prices could be that some medical practices go out of business because their cost is too high to compete with other companies who offer lower prices. However, this likely will not become a problem for years, if ever, because hardly any healthcare prices are currently publicly shared.

     Allowing Medicare to negotiate drug prices, increasing payroll tax, and informing patients of their options are all good choices for lowering the cost of healthcare. However, the government carrying out all the solutions simultaneously would yield the most beneficial results. It would cause a significant decrease in the price- more so than any of the solutions could provide on their own. The price is so high today that millions of more people are opting out of healthcare every year. This leads to things like untreated injuries, because people simply cannot not afford to get treated. In extreme cases, death could be a possibility if patients go untreated for too long. It is presenting an increasing problem in our society, and it is time that the problem be solved.  Lower-cost health care would easily eliminate these otherwise devastating problems. Health insurance is a basic need for humans, and the government should lower the cost of it so that more people can afford and access it.
 
 
Sources
“Choices for Financing Medicare for All: A Preliminary Analysis.” Committee for a Responsible Federal Budget, 31 Oct. 2019, www.crfb.org/papers/choices-financing-medicare-all-preliminary-analysis.

“HEALTHCARE: Definition in the Cambridge English Dictionary.” HEALTHCARE | Definition in the Cambridge English Dictionary, dictionary.cambridge.org/us/dictionary/english/healthcare.
“How Much Does Health Insurance Cost Per Month?” HealthMarkets, www.healthmarkets.com/content/health-insurance-cost-per-month.

Lawrence, Holly. “5 Ways to Lower Health Care Costs in the U.S.” MarketWatch, 8 Mar. 2018, www.marketwatch.com/story/5-ways-to-lower-health-care-costs-in-the-us-2018-03-08.

Schulte, Fred. “Bill Of The Month: A College Student's $17,850 Drug Test.” Kaiser Health News, 5 Apr. 2018, khn.org/news/bill-of-the-month-a-college-students-17850-drug-test/.

Tolbert, Alex. “Tennessee's Candidates for Governor Discuss Health Care.” The Tennessean, The Tennessean, 11 Mar. 2018, www.tennessean.com/story/opinion/contributors/2018/03/11/three-ways-congress-could-reduce-health-care-costs-u-s/411391002/.

“Topic No. 751 Social Security and Medicare Withholding Rates.” Internal Revenue Service, www.irs.gov/taxtopics/tc751.

U.S. Census Bureau. “Who Are the Uninsured?” The United States Census Bureau, 23 May 2019, www.census.gov/library/stories/2018/09/who-are-the-uninsured.html.

U.S. Department of Health and Human Services. “Trump Administration Gives Medicare New Tools to Negotiate Lower Drug Prices for Patients.” HHS.gov, US Department of Health and Human Services, 25 Feb. 2019, www.hhs.gov/about/news/2018/08/07/trump-administration-gives-medicare-new-tools-to-negotiate-lower-drug-prices-for-patients.html.
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“United States Population 2019.” United States Population 2019 (Demographics, Maps, Graphs), worldpopulationreview.com/countries/united-states-population/.