
Americans Are Delaying Health Care Until Tax Refunds Arrive - howard941
https://www.bloomberg.com/news/articles/2019-04-12/what-to-spend-your-tax-refund-on-how-about-the-doctor
======
bryan11
As employers switch to High Deductible Health Plans where insurance doesn't
kick in until one has spent a deductible of several thousand dollars, many
people are delaying health care in general. A doctor's visit that once cost a
co-pay of $30 is now frequently a cash price from $130 to $400, plus more for
lab work. With higher costs and much of them unknown in advance, many skip
getting things checked until it seems absolutely necessary.

~~~
peteradio
I paid 400 dollars to have a doctor tell me to neti pot my nose after having
sinus infection for 3 months. Might not be rational but fuck everything about
this system. Who is pocketing all this goddamn money?

~~~
brudgers
Through no fault of the author, this comment thread explains the trick. The
article talks about US health care access but the discussion quickly goes off
into the weeds of the US health insurance market. As soon as we start talking
about premiums we adopt business language and metrics and abandon medical
language and metrics.

All that money is pocketed by businesses run for profit. It's pocketed because
it can be. It can be because untreated a sinus infection can kill you. Not a
bad business to be in by the standards of business.

~~~
AnthonyMouse
> As soon as we start talking about premiums we adopt business language and
> metrics and abandon medical language and metrics.

To provide healthcare you need doctors, who need money to pay rent and student
loans. You need an office to put the doctors in. You need drugs and medical
devices, and researchers to come up with them. You need lawyers to keep the
doctors from conducting the Tuskegee Experiment. And nurses and lab techs and
janitors etc.

That is all business stuff. Paying employees and managing offices etc. If you
don't pay the employees enough then they get another job and quality of care
suffers. If you pay them too much then costs get out of hand.

The way you determine how much is the right amount is by letting people choose
how much to pay for it. If you have a runny nose and the doctor wants ten
million dollars to see you for five minutes, you blow them off as unreasonable
and get a different doctor. If you demand to see them for $10 and that isn't
enough to cover their costs, they blow you off as unreasonable and get a
different patient. Somewhere in the middle there is a price above what it
costs and below what it's worth where you neither die of a sinus infection nor
sell your first born to have it cured.

There are a lot of reasons this works poorly in the US. Low deductible
employer-provided health plans making consumers price insensitive, lack of
price transparency, an excessively burdensome FDA approval process that
impairs competition between pharma companies, etc. But those are specific
failings that could be addressed.

Switching to central planning just adds a new problem without solving the
existing ones. If consumers pay nothing, not even actual cost, there is even
less incentive to forego unnecessary procedures. Setting prices by committee
is a sure way to either overpay (and waste money) or underpay (and get supply
shortages). If drug companies still set prices then costs remain high, but if
they can't charge the prices they do and still have to go through the same
very expensive approval process, you stop getting new drugs. And then you add
another trillion tax dollars to the budget which every campaign donor in the
country will have a chance to divert a chunk of away from actual medicine and
into their own pockets.

> All that money is pocketed by businesses run for profit.

The significant majority of that money typically goes to employees, not
shareholders. The costs are too high, but it's not because the average medical
practice is turning a huge profit, it's because the existing regulatory
environment causes providing medicine to be unnecessarily labor intensive
(i.e. inefficient).

~~~
brudgers
And yet, here we are talking about business instead of health.

~~~
AnthonyMouse
Because it's a business problem. The problem isn't that doctors don't know
what to prescribe when you have an infection, it's that healthcare is so
expensive that people can't afford it.

~~~
brudgers
The problem is that people don't get healthcare. Price is just the
rationalization for denying it.

~~~
AnthonyMouse
Price is way of measuring when it should be denied, because it has to be at
some point. You can't spend the entire US GDP to save one life, even if it
would work. At some price you have to say it's too expensive.

Then the question is, do you want to decide that amount for yourself, or have
someone else deciding it for you?

------
ed_elliott_asc
Why why why do you put up with this in America?? I live in the uk and health
has always been free at point of use.

The cost is spread amongst all tax payers and costs kept low.

I honestly don’t understand why not every single American is screaming for
access to health services that are literally on their front lawn.

I cannot fathom this is any way shape or form.

~~~
ipad23
Many of these articles exaggerate the price of healthcare in the US. I'm an
independent contractor and pay for my own health insurance. My wife and I
together cost less that 500/month (universal care would take way more in
taxes) Checkups are covered, prescriptions are mostly free or very
inexpensive, and if I do have an emergency, I don't need to wait 6 months to
get treated, like in the UK or Canada. I also get some of the best doctors in
the world.

A good test of a country's quality of healthcare is where people that don't
have to worry about money go to get treated....that's currently the US.

It has problems, but sacrificing quality for nationalization is not the
solution.

~~~
rrrrreeeee
That's some blatant misinformation. In Canada you don't wait for treatment. If
you need treatment, you will be treated. Stop spreading some garbage myth.

~~~
JonGarfield
I don't know where you live in Canada, but that's not entirely true. There are
long waits for some procedures (far longer than medically indicated) and a
significant number of people cannot access primary care because of the
shortage of GPs (especially in rural areas). I would still, 100%, rather live
in Canada than the US but your comment (intentionally or not) completely
glosses over the waiting lists for some medical specialties.

~~~
DangitBobby
People in the US see short lines and think "wow I can use our system whenever
I want" instead of "wow our system is so expensive that it's usage is much
lower than capacity".

------
kartan
> Out-of-pocket medical spending jumps once the money hits people’s bank
> accounts.

It is a bad thing that tax withholding is one of the few ways Americans can
have savings. When you live check to check this can be your only option.

~~~
Mindless2112
That tax withholding is the only way that many Americans manage to save speaks
more to a lack of self-control than anything else.

If Uncle Sam can save a lump-sum for you by deducting from your paycheck, you
could have done the same (in fact, better) with a bit of resolve and a bank
account.

~~~
neffy
78% of American workers live pay cheque to pay cheque.

I would suggest that of the two possible hypotheses, the one where the system
itself doesn't let them do anything else, might be the one more worth
examining than the one that betrays a complete lack of empathy with your
fellow citizens.

~~~
SamReidHughes
The bottom 78% of incomes varies widely, so we know it's a result of spending,
not earning.

------
0n0n0m0uz
Would you pay a few % more in taxes knowing that every human in this nation
could receive the healthcare they need? I would without a second thought.

~~~
paulpauper
Would not be nearly enough.

U.S. health care spending grew 3.9 percent in 2017, reaching $3.5 trillion or
$10,739 per person.

That exceeds tax federal income tax revenue by about $2 trillion

The us govt already spends so much on healthcare.

~~~
colejohnson66
The problem isn’t that we don’t have socialized healthcare. The problem is
that for some reason, healthcare in this country is ridiculously expensive. We
can’t have both; only one or the other. If healthcare is too expensive and you
socialize it, the government will be bleeding even more money trying to pay
for it all.

~~~
scarejunba
The answer is obvious: deregulate. Indian surgeons already perform more heart
bypasses more often for a tenth the cost with better outcomes.

Down with the AMA. Probably the organization with the most blood on its hands
in peacetime America.

~~~
colejohnson66
It is a lack of regulation that got us into this mess. I don’t hate the free
market, but the prices in the US are caused by the free market gouging as much
as they can out of someone who has no bargaining power

~~~
garmaine
It's not a free market when the alternative to buying id dying. It's more like
putting a gun to someone's head and saying "give me $50k or I pull the
trigger." That's not a free market transaction, it's a mugging. It doesn't
magically become better if you get to choose which mugger you pay, or play
them off each other to negotiate down in price. It's still a forced
transaction.

------
Spooky23
This has been true forever. Everyone is broke after Christmas and refunds turn
the lights back on for retail starting in the end of March.

~~~
fma
Yep... Even car sales increase because people have money for the down-payment.

A large population of Americans do not have much savings. Could be bad money
management, low paying jobs, bad luck (health issues) etc.

~~~
ianai
Phht, bad money management. When loan sharks are peddling 450% payday loans
people are being taken advantage of by corporations. The government needs to
practice better money management, not us private citizens. Close tax
loopholes.

~~~
xiphias2
Actually both. It was crazy when I read from a person that he preferred paying
his rent over eating, but it actually makes sense: if you get to the street,
and not able to clean yourself, the chances of getting a job goes down
dramatically.

~~~
toast0
If you get evicted, you're going to have a lot harder time getting into
another apartment, too. It's also a lot easier to get help with food than to
get help with a place to live.

~~~
toasterlovin
Also food is insanely inexpensive. Doesn’t come anywhere near cost of housing
unless you have a large family.

------
djakjxnanjak
If you are reading this and find yourself in the same situation... consider
decreasing your withholding and have the money deducted into a HSA or FSA
instead. You can still use the money for health expenses, and you will also
get a 20-30% tax discount.

~~~
intopieces
Note that the tax benefits of a Health Savings Account are much better than
the Flex Spending Account, if you can get it. [0]
[https://www.investopedia.com/insurance/hsa-vs-
fsa/](https://www.investopedia.com/insurance/hsa-vs-fsa/)

HSA contributions are:

* Deducted from your paycheck and skip all taxes

* Allowed to earn interest, tax-free

* Carried from year to year

* Tax-free when used on health expenses

* Flexible amount

FSA contributions are:

* Deducted from your paycheck and skip all taxes

* Not able to accrue interest

* "use it or lose it" per year

* Fixed Amount

~~~
jasonparallel
HSA contributions do not have to be deducted from you paycheck and you don't
have to use the provider that your employer has selected.

------
Patrick_Devine
This is insane given that the executive branch has been jiggering around with
the withholding amounts for the entire year. Yes, you probably paid slightly
less in tax during the year, but unless you were paying attention to your
federal withholding, you're probably in for a shock with your federal return.

~~~
lotsofpulp
The solution to people’s inability to save is not for the government to hold
their money hostage.

~~~
throw0101a
> The solution to people’s inability to save is not for the government to hold
> their money hostage.

Meanwhile, in the real world where the left-hand side of the Bell curve
exists, and where many people have poor impulse control, that actually is the
solution to some people's inability to save.

Heck, as a student I worked in a union shop where this was actually baked into
the collective agreement because of past experience of people not being able
to save.

It shouldn't necessarily be mandatory, and there are ways to adjust one's
withholding taxes, but it isn't all-bad.

~~~
ip26
But wouldn't we all be more free, _really_ , if we just gave everyone enough
rope to hang themselves & then locked up the left-hand side of the bell curve
in debtor's prison?

~~~
azeotropic
Does the left hand side of the bell curve actually owe any federal income tax?

~~~
pnutjam
FICA is always paid, and hits lower wages harder. You know that money just
goes to the general fund.

------
mises
Withholding is an awful idea designed to favor the government over the
taxpayer and to psychologically soften the blow of the ridiculous tax rates we
pay. It's especially bad with mandatory withholding by the employer. It
shouldn't happen. Taxpayers ought to figure out how much they owe and write
the check for it at once. This is especially true since consumers can't invest
that income or get interest on it: I could get a 6-month CD and make some
extra money otherwise.

~~~
jedberg
I would like that system, but unfortunately most of our fellow citizens would
end up broke come tax time. Most people simply say "I can spend until my bank
account is empty".

That's why most people choose impound accounts when they get a mortgage.
Because they literally can not budget money for the bi-annual property tax
bill, so they have the bank take the money every month.

It's also why teachers are offered a 10 check plan or 12 check plan. They get
the same money, but most of them choose the 12 check plan, just so they don't
have to remember to save money to live in the summer.

That's why the banks offer those "save your pennies" plans. Every time you
make a debt card charge, they round up to the nearest dollar and then put the
rest in a savings account for you. Because people are that bad at budgeting.

Can you imagine most of the people you know having the ability to set aside
20% of their check each month and not spending it ever?

~~~
everybodyknows
IRS actually has a documented policy on the "12-check plan":

[https://www.irs.gov/pub/irs-
tege/409a_presentation.pdf](https://www.irs.gov/pub/irs-
tege/409a_presentation.pdf)

Wonder how many teachers understand that the net financial effect amounts to a
zero-interest loan from themselves back to the school district?

~~~
mac01021
That example teacher is very well compensated.

------
geodel
Canadians with their great health care system seem to think that they need
~250K salary/year to feel comfortable [1] So most people are either too
desperate or aspiration too high that no government in the first world can
make them happy.

1\. [https://www.huffingtonpost.ca/2018/11/03/average-salary-
cana...](https://www.huffingtonpost.ca/2018/11/03/average-salary-canada-
wealth_a_23579661/)

~~~
robocat
And Canadians think they need $750k for retirement - are they expecting to
retire for three years and then die?!

[https://business.financialpost.com/personal-finance/the-
magi...](https://business.financialpost.com/personal-finance/the-magic-number-
for-retirement-savings-is-756000-according-to-poll-of-canadians)

~~~
jogjayr
Does everyone spend 100% of their salary, no matter how large it is?

------
theonemind
I need to recheck my W-4. As far as I know, I pick the right things there and
still get a stupidly large refund.

~~~
rootusrootus
Make sure you've done 2018 taxes first. For a lot of us the total tax owed
went up by some amount while the withholding went down. And just put whatever
additional net shows up in your account somewhere for next year.

------
MagicPropmaker
Why are they over-withholding?

------
tomohawk
In Canada, people wait much longer than Americans do for ordinary diagnostic
tests.

[https://www.fraserinstitute.org/studies/waiting-your-turn-
wa...](https://www.fraserinstitute.org/studies/waiting-your-turn-wait-times-
for-health-care-in-canada-2017)

Rationing access to healthcare is not the answer.

