The Tuesday: The High Price of Free Health Care

Welcome to the Tuesday, a semi-fortnightly vexation. To subscribe to the Tuesday and receive it in your in-box, which I hope you will do, please follow this link ...

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BY KEVIN D. WILLIAMSON September 14, 2021
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WITH KEVIN D. WILLIAMSON September 14, 2021
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The High Price of Free Health Care

Welcome to the Tuesday, a semi-fortnightly vexation. To subscribe to the Tuesday and receive it in your in-box, which I hope you will do, please follow this link.

Trouble in Single-Payer Paradise

There are two kinds of people who support single-payer health care in the United States: Those who point to the British system as a successful example, and those who know something about the British system.

Under the Conservative government of Boris Johnson, the United Kingdom will see taxes raised to their highest-ever peacetime level with a new surcharge going to support the financially wobbly National Health Service and "social care," meaning nursing-home care or at-home care for the elderly. The taxes will fall disproportionately on the wages of young people, who don't vote Conservative, to the benefit of wealthier retirees, who do.

One of the proverbs you hear when it comes to comparisons between the United States and the United Kingdom goes roughly: "Sure, they pay higher taxes, but at least they get something for it, including free health care."

Neither one of those is exactly true.

Apples-to-apples comparisons are difficult to make, because both countries have multiple taxing jurisdictions (high-income New Yorkers pay more than high-income Texans, and high-income Scots pay more than high-income Englishmen) and tax things like investment income and profits from selling a residence differently. That being said: Middle- to upper-middle-income Britons do pay higher national income taxes than do their American counterparts, but when state and local taxes are taken into consideration, the math looks different, with middle-income households in New York State, for example, liable in at least some cases to pay higher income taxes than they would in the United Kingdom. (By way of comparison, taxpayers in Denmark typically pay nearly twice the income tax they would in the United States.) Overall, British income taxes are slightly but not radically higher than American taxes.

So, comparable income-tax rates and all that sweet free health care — it looks like the British are getting a great deal, no? But, of course, it is more complicated than that.

The Brits take a great deal of national pride in the NHS, but, for many in the United Kingdom, that pride is not enough to get them to actually rely on the NHS for health care: One in five Britons choose private care funded out-of-pocket rather than the NHS care funded by the taxes they already are paying, according to the BBC, citing delays, lack of available services, and the indignity of having to "fight for treatment" with the NHS bureaucracy. One in four NHS patients say that working with the state-run system has harmed their mental health.

Meanwhile, residential and at-home care for the elderly, a growing concern in aging nations such as the United Kingdom, can be outrageously expensive. Britons with modest assets (say, $35,000 in home equity) might expect to pay around $90,000 a year for retirement care. In some cases, those expenses can run into six figures.

It isn't just care for the elderly. Mental-health care in the United Kingdom is poor (though not as poor as it is in the United States) and getting poorer as the number of available treatment spots are cut.

That's typical of the socialist model of providing scarce goods and services: The things that are free you can't get, and the things you can get aren't free. There is a reason that, contrary to what you hear from American progressives, few countries in Europe or elsewhere actually have national single-payer systems. Germany doesn't have one. France doesn't have one. Health care in Switzerland happens in an entirely private (but highly regulated) market.

The new surcharge and the related reforms are meant to get social-care costs under control. And while the government of Boris Johnson is not always obviously competent, this is not a Johnson problem: British governments have been grappling with social care since the 1970s. The timelines there are always kind of interesting to me: The welfare state in ...   READ MORE

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