Would Single-Payer Healthcare Be Cheaper for You?

by Justin on August 31, 2015

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As the early stages in the race to be the next President of the United States of America take place, there’s one man who’s been front and centre for the last couple of months – Donald Trump. No matter your opinion on the man, he makes the headlines on almost a daily basis and his latest controversy is around switching to a single payer healthcare system, much like in the UK or Canada.

Leaving the political opinions to one side, transforming the way healthcare works in the USA is a huge task. Health insurance is a huge expense for many Americans, and the concept of a single payer system would be a radical change from the current set up. While any move this kind of system is unlikely to mirror the UK, understanding how the National Healthcare System (NHS) works may give you an idea of how things would operate in the US.

What is the NHS?

The NHS is the state-funded healthcare system in the UK. It’s funded by tax payers, and everyone resident in the UK is entitled to free healthcare. The standard of care is generally very high, and although you’ll hear plenty Brits complain about the waiting times (the NHS has a target of 18 weeks from diagnosis to treatment) it’s generally not too bad when compared to the US.

While the majority of people will use the NHS for their care, there is a private healthcare sector which offers access to various specialist hospitals and typically has a far shorter waiting time for treatment. There are a number of providers, who provide access to these facilities for a monthly premium similar to the health insurance system in the USA. UK providers often offer a range of products and services such as cancer cover, dental cover and so on (example here) as well as health information, apps and often travel cover as well.

The Cost of Healthcare

America spends more on healthcare than anywhere else in the world, both in terms of actual dollars spent and as a proportion of national income. 20% of national income in the US is spent on healthcare, while no one else in the rest of the world spends more than 15%. The notion of switching to a single payer system causes plenty of emotional debate, but would it actually save you money without having to compromise on quality?

The experts are hugely divided, as you might expect. Some claim it could result in as much as $570 billion in savings, while others argue it would have a drastically negative impact on the system.

The chances are that the transition to a government owned system would, at least in the short to medium term, involve covering the costs of the existing healthcare system through additional taxation until changes can be made. How much of a difference, in terms of the amount of your pay check that would go towards it, is up for debate but it’s safe to say it’s unlikely to be much cheaper, at least in the beginning.

While the Brits and Europeans have a far lower healthcare spend, transitioning the USA to a similar system is unlikely to leave you with more money in your pocket at the end of each month. For now, simply aiming to get the best deal on your health insurance is probably the best way to keep more of your pay check.

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