Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

Five Ways our Health Insurance System Rips off Working Families

Most Americans do not like to admit it but there are five big ways that our health-insurance system rips off working families. These rip-offs demonstrate why we need a Medicare for All system that covers every American.

The five big ways that our broken health insurance system rips off working people are:

  1. Collecting taxes that pay for health-insurance taxpayers cannot take advantage of. Almost every working American has a 1.45% tax deducted from his or her paycheck to pay for a federal health-insurance program called Medicare. The horrendous thing about Medicare is that millions of Americans with no health insurance coverage are paying for a federal health insurance program they cannot take advantage of. Medicare only covers people over 65 and a few others that meet certain criteria. Another health insurance program that your taxes pay for is Medicaid which only covers the poor. If your income is over a certain level, Medicaid will not cover you.

  1. By raising the cost of all goods and services. The main mechanism our broken health-insurance system uses to cover people under 65 is employee health insurance. The problem with that is where companies get the money to pay for that health-insurance: they raise the prices they charge customers. No company is cutting the CEO’s pay to pay for health insurance for employees. They charge everybody more. As with the Medicare Tax, people are paying for health insurance they cannot take advantage of. The situation is made worse by Obamacare which takes away employers’ choice not to offer health insurance.


  1. Cutting the pay of working Americans. There is another way employers get the money to pay for health insurance: they simply pay employees less. Tens of millions of Americans are taking home less money; because their employers are spending cash they could use to give people a raise to buy health insurance. This is on top of the Medicare tax, so Americans are having their pay docked twice to pay for health insurance.

  1. Raising your car insurance rates. The biggest expense in auto insurance claims is medical costs that arise from accidents. If a person in an accident has no health insurance; your insurance company pays for his or her treatment. That forces many injured lower-income people to hire to personal injury attorneys to sue the insurance company because it is the only way they can get the cost of their healthcare paid for. The insurer passes the cost of that healthcare on to everybody else by raising premiums. The situation is worse in some states; because they have so-called “no-fault” insurance, which allows insurance companies to stick all drivers with the bill for auto accidents.


  1. Free riders. Free riders are irresponsible people who go without health insurance until they get sick or injured. They sign up for it then and allow the responsible individuals to pay their medical bills. Obamacare is supposed to deal with free riders by penalizing them with higher taxes, but there is no evidence that is working. Medicare for All would eliminate free riders by simply collecting a tax from everybody that pays for universal health insurance. Free riders would pay their share every April when they filed their tax return.

The sorry truth is that these are just a few of the ways that our health insurance system rips off working families. There are many others; including higher medical costs, Medicare frauds, high prescription prices, free emergency-room care (which many free riders abuse), and free paramedic care and ambulance services financed by local taxes.

There are also millions of Americans who are sicker than they should be; because they lack health insurance and cannot pay for healthcare. That leads to higher Medicare and Medicaid costs later on; and raises the burden on taxpayers because many people become too sick to work and end up on Social Security Disability (guess who pays for that).

Our health insurance system is not just a rip off it is patently unfair and unjust. Americans need a fair health insurance system that covers everybody, not a rip-off. A properly designed and implemented Medicare for All can be that system.