“Healthcare expenditures in the US rose 6.7 percent in 2006 to $2.1 trillion, or 16.1 percent of the nation's total output of goods and services, government economists reported last month. (Last week, the government predicted the nation's healthcare expenditures will reach $4 trillion by 2017.) Most other rich industrial nations, with universal care, spend only 11 to 12 percent of their gross domestic product on healthcare. Canada spends even less, a bit more than 9 percent of GDP, on a single-payer government insurance system for all its people.”
Comment: Those individuals that wax poetically about the myriad benefits of universal health care seem to be missing a key fiscal issue that looms large in our national future: As baby boomers start to retire en masse, the ratio of workers to beneficiaries will go from four to one to roughly two to one. The shock to future tax revenue should be cause for some alarm if not rapid action.
Currently, Medicare and Medicaid federal spending is larger that what we spend on national defense. And it is a sure bet that medical costs will continue to rise faster than the rate of inflation. The portion of the federal budget allocated as an entitlement for seniors and the poor as medical care will become a larger percentage of our GDP: According to the Congressional Budget Office, Medicare spending will essentially double from 2007 levels in 10 years and Medicaid spending will nearly do the same. Both programs will consume 12 percent of GDP by 2030. (
See CBO study here.)
Now, knowing that we have a looming fiscal storm looming on the horizon, does it make sense to call for a national health care plan right about now? If we provided health care for everybody in this country, we would expand the federal expenditure to health care far beyond our current and future revenues from tax receipts. We would have to raise taxes so high to cover future expenses that it would surely be a detriment to our economy. Any purported savings that is usually mentioned by universal healthcare advocates from having national health care would hardly matter in an economy that was hamstrung by extremely high taxes.
The true cost of a national health care plan has not really been brought to light this election year. We keep hearing populist rhetoric as presidential candidates try to garner votes from a public that wants easy and quick answers. Most people just want the surface details but none of the dirty underlying economic facts. Too complicated, too many graphs and besides government built the highways and sent a man to the moon. And as usual, we may end up with the government bureaucracy and all of the nasty cost we deserve.