Health care costs money, a point that has been strongly reinforced from all directions over recent weeks and months. So why when you ask a lot of Americans what they want from health care reform do they answer “healthcare that’s free like in Europe”? I’ve already established that few people in America actually have the faintest idea what health care systems in Europe look like (and apparently cannot be bothered to do five minutes worth of research to find out) so today I want to talk about what health care actually costs beyond the borders of the US.
In the US, according to the 2008 Milliman Medical Index, a family of four with an employer-based PPO would pay around $15,609 total this year in health care costs. Of this amount, $9442 was paid by the employer and the employee contributed $3,492 in premiums and $2,675 on copays, etc.
Other sources put the cost of premiums for a four person family at $5,799 if buying directly or $3,281 via an employer, about 10 and 6 percent respectively of an average family income of $58,526.
When Americans talk about ‘free health care,’ they are really talking about a single payer system in the mold of Canada, the UK, or Scandinavia. So lets see what residents in thse countries really pay. In Canada, the system is mostly tax funded and while there is not a particular percentage allocated to health care, it is estimated that ~22% of taxes collected went to the health system in 2004. Several provinces also charge additional premiums, including Quebec, Ontario, Alberta, and British Columbia. The Organization for Economic Development and Cooperation estimated in 2008 that in Ontario these extra fees ranged from 300-950 Canadian dollars based on income, in addition to 6-25 percent of taxes being destined for the health care system, also dependent on income. Canadians also may spend money to receive private treatment for procedures or drugs that are not covered by the government system.
Citizens of the UK pay 11 percent of each pound they make in weekly income between £100 - £670 for the NHS, plus an addition 1 percent of income over £670 a week. Hidden fees, such as costs for parking at medical facilities, drive up the costs further. In 1998, NHS costs totaled £1.3 billion, today it is £3.7 billion, a rise of 186 percent. Prescriptions now cost Brits £459 million versus £321 million ten years ago. The co-pay for drugs is low, £7.10 as of April 2008, but many drugs are not covered, sometimes because NICE has decided that although they are efficacious, they are not cost-effective. And until recently anyone who used their own money to buy powerful but expensive uncovered drugs found himself shut out of the NHS and forced to pay for all care privately.
Figuring out what health care costs citizens is trickier when it comes to Norway, the system is tax funded but the government doesn’t designate a certain percentage to health care. However, the country spent 9.1 percent of GDP and $4328 per capita on health care in 2005 so the percentage of taxes it consumes is likely to be substantial. Even so, the costs Norwegians have to cover out of pocket are substantial, amounting to about 16.7 percent of expenditures in 2005. Patients are charged copays, about 125 to 235 kronorfor a visit to a GP depending on the reason and whether it is day or night, up to a given annual individual total, about 1615 kronor in 2006.
Once a person (or one parent plus children under 16) has reached this threshold, they get a special card and their care is then gratis for the rest of the year. Over 1 million Norwegians reached this point in 2005. Children are not charged copays for all or some medical services, depending on age, and those who are retired or disabled also are exempted. For care in areas outside the health system, such as dental and rehabilitation or treatment outside Norway, there is a separate threshold of 2500 kronor, which works the same way. Other costs to patients come from copays for medications, plus having to pay the difference if a patient wants a pricier drug than the system will reimburse for.
These are simply the straight financial costs levied on those covered by these systems, without reference to the other types of costs that result from participating in the system due to the ways it controls costs. And this is just single payer, the next installment will consider the costs of other types of international systems and how they compare to those in the US.
