Healthcare Costs

I frequently hear both doctors and patients saying that the healthcare system is broken and needs to be fixed. Often the recommended solution is socialized medicine, but the majority of the current US healthcare system is already socialized, and government involvement is to blame for both the high cost and the low quality. In reality, the healthcare system is not broken at all; it was specifically designed and enacted, through government legislation, to create enormous profits for health insurance companies, pharmaceutical companies, hospitals and numerous administrative middlemen who add no value and only exist to extract money from the system. Expansion of this system would result in even higher costs and even lower quality. 

71% of Americans have access to socialized medicine, including patients with Medicaid, Medicare, Tricare, Veterans, and Federal Government employees, and the majority of the rest have taxpayer-subsidized private health insurance through their employers. $1.7 trillion of taxpayer dollars were spent in 2024 on healthcare, and individuals spent an additional $3.2 trillion out-of-pocket for a total of $4.9 trillion. Health insurance companies made $39 billion in profits. Over one third of the total US healthcare spending goes toward insurance company overhead.

In 1960, Americans paid $147/year for medical care, which would adjust to $1,567/year today. In 1965, Medicare and Medicaid were created, and by 1970, the cost of medical care had more than doubled to $353/year. The cost in 1990 was $2,835/year. HIPAA passed in 1996, and by 2000, the cost was $4,844/year. The ironically-named Affordable Care Act was passed in 2010, when the cost was $8,381/year, and medical costs have continued to skyrocket to the current $13,439/year, hardly affordable. The current average health insurance premium for an individual is $8,951/year and $25,572/year for a family. The cheapest plans cost $4,572/year, but the average deductible is $7,258, so most patients pay for all of their care out-of-pocket despite having health insurance.

Currently, employers are spending $1.3 trillion annually on healthcare for their employees with an average of $7,000/employee. Some corporations have already learned that they can save a significant amount of money by paying for the healthcare expenses of their employees and their families directly, rather than contributing to health insurance. By removing health insurance requirements of the ACA, both individuals and companies would save money. Individuals and employers could save even more by adding Direct Primary Care, which typically costs less than $2,000/year for an individual and less than $4,000/year for a family. Combining a healthshare plan with a health matching account generally provides the same or better healthcare coverage as health insurance for less than half the price.

I propose elimination of all of the current Federal and State healthcare programs and legislation with the exception of emergency services. HSAs would be made available for everyone with pre-tax contributions and employer matching up to $10,000 annually for an individual account and up to $50,000 annually for a family account. Tax refunds would be automatically distributed into HSA accounts such that low-income, retired, active-duty military, veterans, and those with excessive healthcare costs would receive additional taxpayer-funded contributions in order to ensure healthcare equity. Instead of funneling pre-tax dollars to insurance companies, this money would go directly to individuals and families, and patients would have the freedom to spend this money on their own healthcare expenses, without the arbitrary restrictions set by insurance companies, or save it for future healthcare needs. Since patients would be choosing how to spend their own money, market forces would encourage competition and lead to improved quality and lower prices. Healthcare costs would be drastically reduced through the elimination of health insurance companies, Medicare fraud and administrative expenses.  

Despite spending the most on healthcare, the United States has the worst health outcomes of all of the industrialized countries. Leading causes of death in the US include cardiovascular disease, cancer, lung disease, liver disease, diabetes, and Alzheimer’s disease, and the risks of all of these conditions can be lowered through lifestyle changes, including diet, exercise and avoidance of alcohol, smoking, and ultra-processed foods. Eliminating insurance would free up $1.6 trillion to promote healthy lifestyle, starting with public school lunches. In European schools, students eat nutritious homemade meals prepared with whole foods which are locally sourced. Imagine if the Standard American Diet was transformed within a generation by providing healthy and delicious meals within public schools to students and the community at large at an affordable price, funded partially by hefty taxes on alcohol, cigarettes, vapes, and ultra-processed foods. Imagine if children and adults had easy access to cooking classes and affordable whole foods, as well as hot homemade nutritious meals for pick-up for those who work long hours. Diverting financial resources away from insurance companies and toward prevention of chronic disease would result in improved physical and financial health for all Americans.

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