Economists calculate taxes using the “tax wedge”—i.e. what you pay in taxes versus what you cost your employer. According to: https://smartasset.com/taxes/california-tax-calculator#WP4gh..., take home on $300,000 in California is $185,000. But including employer side payroll taxes but excluding benefits, you actually cost your employer $313,000. So your tax wedge is about 41%. Then add in the sales and property taxes you pay directly or indirectly, and you’re probably close to 45%. At $500,000, your tax wedge is 45% before sales and property taxes, so you’re probably over 50% all in.
If we are making international comparisons, I would add the cost of health insurance in california as a "tax". That's the only way to reasonably compare western countries.
I had a friend try to adopt a baby from china many years ago (1990s). He was rejected. The Chinese thought he didn't earn enough to safely raise a kid. They were using a means test designed for US applicants. My friend lobbied to explain all the things he gets in Canada for free, health care being the big ticket item. The Chinese authorities relented and he was allowed to adopt.
I don't follow how this could be possible. I'd think most people in the US either would be getting health insurance from the government (Medicare, Medicaid), from an "Obamacare" exchange and subsidized, or from an employer where they don't pay cash.
So where would the discrepancy in accounting between that and Canada come from? It seems unlikely that the Chinese government would assume that even Americans buy health insurance retail.
>> It seems unlikely that the Chinese government would assume that even Americans buy health insurance retail.
They aren't assuming anything. They know that healthcare in the US is hit-or-miss, that it is normally for people to move between having and not having healthcare throughout a lifetime.
>> The new report highlights that 5.5% of children under the age of 19 were uninsured, largely because of a decline in public coverage.
1 in 20 American kids are uninsured, not counting the undocumented who don't answer the census. That's ridiculous today but it was even worse in the 90s. That's why the Chinese didn't want to give kids to non-wealthy Americans. Uninsured children are almost unheard of in Canada. Only some illegal immigrant children, but even there they have systems in place.
"They aren't assuming anything. They know that healthcare in the US is hit-or-miss, that it is normally for people to move between having and not having healthcare throughout a lifetime."
That's a general complaint that has nothing to do with insurance being a cost you pay out of your take-home salary in the US.
Your anecdote seemed to be predicated on an accounting difference between the US and Canada, that the Chinese supposedly didn't know about. I'm saying that doesn't really exist. The sort of people who adopt would have a job with insurance, but the price of the insurance would not be included in their salary.
In my lifetime, I have been uninsured, insured by my employer, on an ACA (Obamacare) plan, etc. But never been in the situation where I was making a good salary and paying full price out of it for a health insurance policy, like people do with car insurance. Nor have I ever known anyone who did. Of course, somebody probably has, somehow, but it's not common, let alone a norm that some government would assume.
I never said my friend had a job. Part of the problem, in the US, is the link between employment and insurance. My friend earned reasonable money as a moderately-sucessful artist but did not have an employer. In the US that would mean paying out of pocket. In canada he didn't have to pay a dime.
Also the self-employed in the USA have to pay over the odds for rubbish schemes. Large employers can be assumed to employ mostly healthy people, but an individual is more likely to want health insurance if they already know they are a bad risk. This "moral hazard" means that selling health insurance to the self-employed is a money-losing proposition unless you screw them at every opportunity.
I’m no fan of health insurance as currently instantiated, but I don’t see it as screwing them at every opportunity if they are actuarially unprofitable otherwise.
Depends on framing. If you divide the population by an arbitrary standard with a very high health bias (employed, in big co), and adjust payments accordingly, then those on the wrong side of your arbitrary standard get shafted.
The second group may be unprofitable with lower payments, but the insurer doesn't even want the second group, the profits are from decreased expenditures on the first group.
Absent an individual mandate with actual teeth (or outright government providing of healthcare), do you have a solution that seems workable on a voluntary arms-length basis for all actors involved?
I’m not arguing those other conditions shouldn’t exist, but rather making the weaker, more limited argument considering “given the arrangement of the insurance market as it exists today, what should the price for that insurance offer be?” In other words, “What should a for-profit insurance company do, acting on their own and immediately?” because I think that’s pretty close to the question they’re facing when setting pricing for individual plans.
Ah, yes, the good old supply and demand theory of health: if you can‘t pay for your healthcare, you obviously have no need for it, because needs are only things you are willing and able to pay for.
It’s more like “if the cost to serve a broad population P is $X, I don’t think it’s screwing them to say ‘the price cannot be lower than $X’ because we are a health insurance company, not a charity.”
I think you’re arguing that perhaps health outcomes should not be funded by private for-profit insurance companies and I’d agree, but while it is, this outcome seems grounded in actuarially sound math.
Most employers in the US subsidize healthcare, but employees still pay. You usually pay X if you are single, a bit more if you are married, and ~2.5X if you are married with children. Each company has negotiated it slightly differently and it also depends on the specific plan and the state you are in.
but that is not all.
You also pay a co-pay ($15-$50) per visit to a doctor and a co-pay for many prescription drugs. In NYC, a pregnancy with my diamond healthplan cost ~$10k
You also pay a deductible (can be $0 to $5000 or more) where you cover the first $X of the annual payments.
Finally, depending on the state you are in (some allow it, some do not) you also pay balance billing. Basically, the hospital/doctor comes up with some surprise figure of how much you owe, they subtract what insurance paid, and you owe the rest. Usually it is nothing. In the case of more complicated things like surgery, it can be thousands.
I only heard of startups doing this. Outside of that you pay x % for healthcare per paycheck the employer covers some other amount. Healthcare might not be socialized but at least I can always find a new provider if I absolutely wanted one just pay out of my own pocket is the only downside. The subsidizing happens for bigger corps usually and negotations between healthcare providers vs insurance companies. The more clients you have the more effective the negotiations.
When Obamacare was going through I read in The Economist that about 1/3 of Americans had their health care paid for by Uncle Sam. The schemes were Medicare, Medicaid, Veterans Administration, and health schemes for government employees.
Most companies don't pay for 100% of health care coverage - and even if they do, that might only be for you, and not for your dependents. The main leverage of private company health insurance is their negotiating power, but it can still be something in the ballpark of $10k/year/person I don't know exact numbers, but definitely Not Cheap.
