The United States needs to reform health care because the cost is too high. Medical bankruptcy has affected as many as 2 million people. Rising medical costs threaten the entire federal budget. This makes the cost of preventive care unaffordable. This has led many low-income people into the emergency room, and the cost is even higher.

The high cost makes the cost per capita of the US healthcare system twice that of other developed countries. As a result, health care contributed 3.2 trillion US dollars to GDP, accounting for 17.8%. This is the highest proportion in developed countries.

Three reasons for the high cost

There are three reasons why costs are so high. First, most of the cost comes from treating people in the first 10 days and the last 10 days of their lives. Much progress has been made in the rescue of premature babies and medical procedures that extend the life expectancy of the elderly. But these innovative programs are very expensive. Other countries have limited this high level of care. If the success rate of surgery is low, they will refuse. In the United States, this care is given even if the prognosis is poor.

The second reason for the high cost of medical care is the increase in medical malpractice lawsuits. Doctors often over-examine, ordering $1,000 for MRI and $1,500 for colonoscopy. Even if they don't think they need it, they will do the same. It protects them from being sued because they don't ask for a specific test.

The third reason is that the price competition in the healthcare industry is less than in other industries (such as consumer electronics). Most people do not pay for their own medical expenses. Patients pay only a flat fee or co-payment, while the insurance company pays the rest. As a result, patients do not pay for doctors, lab tests, or procedures like buying a computer or television.

A quick review of health insurance

Most people buy health insurance because of the high cost of medical care. This is why most discussions about health care reform have focused on improving the availability of insurance. Insurance is charged monthly. This is also known as a premium. In return, the company pays for medical expenses.

When the premium received in the premium is more than the money paid in the claim, the group health insurance company will make a profit. In the United States, most people receive group health insurance from their employers, and employers pay part of their insurance premiums. Companies can provide health insurance as a tax-free benefit. The federal tax policy subsidizes the group insurance system provided by employers.

Those who do not have an employer sponsorship program must purchase personal health insurance. That is too expensive. In the past, if you had a disease or illness before, the company may refuse to apply for insurance. As an option, you can join a group such as the American Association of Retired Persons or Costco. They offer lower prices because they have a group of healthy people.

The federal government provides medical coverage for people over the age of 65 through health insurance. Part of the medical insurance, part of the hospital's insurance plan, is paid for itself from the payroll tax.

Part B of the Medicare, Supplementary Medical Insurance Plan, and Part D, the prescription drug program, does not include 100% premium payment. In general, medical insurance payroll taxes and insurance premiums account for only 57% of current benefits. The remaining 43% of the funds come from general income.

The federal government also provides Medicare for families below a certain income level through Medicaid. It is funded by general income from federal and state governments. So it adds federal and state costs.