Quora: Would Universal Health Care Affect Taxes?

Republican Senator Bob Corker talks to reporters following a Republican caucus meeting in the U.S. Capitol on July 27 in Washington, D.C., shortly before Republicans failed to pass a “skinny” repeal of Obamacare. Chip Somodevilla/Getty

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Answer from Steve Harris, MD from University of Utah School of Medicine:

U.S. healthcare is paid for 1/3 in taxes, 1/3 in insurance premiums, and 1/3 cash out of pocket (including deductibles, co-pays, bankruptcies to pay hospital bills, etc). It is $11,000 per person per year (average).

What happens to taxes depends on what you want "universal healthcare" to do. If you want it to do what medicare and medicaid does, but for everybody, you can easily do it with 2/3 of our present cost (since right now the tax part pays for the sickest and oldest 1/3 of people, and would have no trouble absorbing the rest for 50% of that).

Then, what would happen is, taxes would go up by the amount you are paying in cash, but your cash wouldn't be going for medical care, but instead to the government for medical care. It's a net wash for you. That amounts to about $3,700 a year in more taxes, and the same amount of extra money to you to pay them. Administration fees from government are only 1%, so you don't lose much there.

But now comes the fun part. You have $3,700 you were paying in insurance, but now aren't. Unless you want "medi-gap" insurance. Then feel free. You probably will not need the entire $3,700 worth, as other industrialized countries do this whole thing on less. Canada does it on $6,000 a person and you're already paying $7,400. When you pay another $1,600 in medi-gap insurance, you're up to European standards of $9,000 a year. So all this saves you about $2,000 a year.

Now, granted, for this to happen, some US peculiarities need to disappear. We pay doctors on average $350,000 a year, and that would need to come down to $300,000. Some specialists (my hated dermatologists at $400,000) would take home less, but their big complaint is that they train for thirteen years instead of eleven, and I think it's fair that they make 13/11 as much, not twice as much. This saves the patient $130.

The US drug companies have been raping US consumers, making them pay two to three time as much for pharmaceuticals as Europeans. In the US we spend $1,000 a year for drugs, and it could be $500 or less. So you save $500 there.

Insurance costs are 7% of the healthcare dollar, and at least 2/3 of these would disappear. There's another $500.

The biggest savings is in all those tests and scans and procedures done because the records of previous ones cannot be gotten out of storage, and it's just as easy for the specialists to re-do them (and more profitable, too). The doctors only make 8% of the medical dollar, but they generate at least half the revenue, and some of this doesn't have to be done, because it has been done.

Anyway, there is no free lunch, but this is how the rest of the civilized world does it, and it works. So pay attention.

What will happen to America's taxes if we'll allow universal healthcare? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google+. More questions: