Who's Really Paying For Health Care?

Health care reform opponents have been screaming that they don’t want the federal government to take over their health care (including Medicare, of course). Yet, according to Centers for Medicare and Medicaid Services Office of the Actuary recent estimates on U.S. spending for health care, if the current trend continues, by 2012, public spending (Medicare and Medicaid and others) on health care will account for more than half of total health care spending in the U.S..

The CMS projects that private spending in 2010 will grow only 2.8% as a result of both declining private health insurance enrollment because of sustained high rates of unemployment and the end of federal subsidies (yet another government-funded health care "program) for COBRA coverage (15 months from Feb. 28, 2010).

Interesting, isn’t it? “People” say they want government out of their health care, and yet, more and more of the responsibility for health care funding is falling on our federal government, and, for Medicaid and the States’ Children’s Health Insurance Program, state governments with the federal government. And the federal share of funding for state programs is increasing by leaps and bounds as state economies falter. Ask beneficiaries of all those public programs how much governments interfere with their medical care.

The public also ignores another way that the federal government funds our nation’s health care spending—through our employer-sponsored health insurance, including insurance for public employees. Those of us fortunate enough to still be able to get our health insurance through our employers pay our premiums pre-tax, thus lowering not only our income taxes, but also our (and our employers’ share of) employment taxes for Social Security and Medicare. In other words, the federal government provides a significant financial subsidy for our health insurance. A study published in 2002, estimated that these tax benefits add about 15 percentage points to the CMS estimates of federal government spending on health care.

A new Harris Interactive Poll reveals that a large proportion of Americans (45%) believe that health care is the most important issue for government to address. Are we on the same page?