Monday, March 1, 2010

The Socialized Medicine Scheme: who pays for health-care?

One point that seems to be obscured in the current health-care/health insurance debate is the perception that 45% of health care
expenditures are government and 55% are private.

The statistics of Medicare, Medicaid, military, and other government programs make up 45% of health-care expenditures and hence government is 45% of the pie.

That somehow, some way, government pays for 45% of health-care. There is something very wrong with this perception and consequential arguments based upon government currently paying for 45% of health-care expenditures. The argument is flawed as "government" produces nothing and hence is merely a transfer mechanism.

In reality the private sector pays 100% of all medical care expenditures. That is to say, government does not exist without tax transfers from the private sector. A certain portion of taxes are extracted from the private sector by government for the subject of health-care. The government merely acts as a transfer agent of this private sector money.

Hence at the end of the day, 100% of all health-care expenditures are paid by the private sector.

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