September 24, 2021

An Innovative Healthcare Plan Not Mentioned by Democrats


It may seem like just yesterday that you were watching Election Night coverage as Donald Trump became the 45th President of the United States of America. It may also seem like the next Presidential election is a long way away. However, if you’ve watched the news lately, or even gone on social media, you know that coverage of the 2020 election is picking up speed every single day. As we move closer to November 2020, issues that hold the most importance to voters will rise to the surface and become the subject of much debate not only among Presidential and Congressional candidates, but also among the American people, for whom the issue holds a crucial importance in their everyday life.

One issue that is sure to be a hot topic as we barrel towards next year’s election season is an issue that has been a hot topic for more than a decade now: healthcare. Both sides of the political spectrum can agree that Americans are spending too much money on their healthcare expenses. This fact can’t be argued when you compare the amount spent by the United States to the amount spent by similar countries such as Canada and various Western European countries.

According to the Peterson-Kaiser Health System Tracker, the average health spending per person in the United States was $10,224 in 2017, which was 28% higher than Switzerland, the second highest per capita spender. The amount spent per person in the United States is almost double what is spent in comparable countries, which average $5,280 per person. An even starker contrast is seen when comparing the United States with the United Kingdom, which spends only $4,246 per person on health expenditures.

This gap in healthcare spending has become more pronounced in the past four decades, with much of the disparity occurring in the 1980s. In the decades leading up to the 1980s, the United States was tracing very closely with many European countries’ annual growth rate of per capita health expenditures. Then, everything changed in the 1980s, when the United States’ per capita health expenditures grew by 10% while the rate for comparable countries grew by only 7%. In the nearly three decades since the 1980s, the United States’ rate has fallen back in line with those comparable countries.

The major difference proliferating the United States’ average health expenditures per person is the private healthcare spending. Private healthcare spending in the United States accounts for 8.8% of GDP, compared to an average of 2.7% for comparable countries. By contrast, public healthcare spending in the United States is essentially equal with comparable countries in terms of the percentage of GDP. Since 1970, private sector healthcare spending in the United States has increased from 3.9% of GDP to its current rate of 8.8%. Public sector healthcare spending in the United States accounts for 8.5% of GDP, making the United States the only OCED country to have greater private sector healthcare spending than public sector healthcare spending.

So, why is private sector spending in the United States so much greater than in similar countries around the globe? While one obvious difference would be the existence of universal healthcare in the other OCED countries, the United States’ healthcare problems run much deeper than just that. With the uninsured rate being at a near all-time low of 10.2% in 2017, the problem wouldn’t appear to be with Americans having to pay expenses out-of-pocket but rather with the cost of their insurance. In fact, in 2017, Americans paid an average of $1,124 of out-of-pocket expenses, which made up only 10.5% of the national health expenditure. By contrast, private insurance expenditures now represent 34% of national health expenditures in the United States, compared to only 21% in 1970. This percentage includes both expenses paid by the insurance companies and premiums paid by enrollees of the insurance programs. 

While the expenses paid by insurance companies are certainly an important factor in the larger problem, premiums paid by enrollees are what is directly affecting Americans pocket books and therefore, will be playing a major role in next year’s election. In 2018, the average premium for individual coverage on the ACA marketplace was $440 per month, while the average premium for family coverage was $1,168. In addition to these monthly costs, Americans were also subject to large deductibles with these plans. The average annual deductible for individual plans was $4,578 and the average annual deductible for family plans was $8,803. Add those two figures together and it means that an individual has to pay $9,858 before any of their medical expenses will be paid on their behalf. More concerning, a family would have to pay $22,819 before any of their medical expenses will be paid on their behalf.

As we wait to see which side will win the White House and Congress in 2020, and as a result, what, if anything, will be done to fix America’s broken healthcare system, one question is crucial for Americans: What can be done to save money on your healthcare? One solution that over a million Americans are already utilizing to save money on their healthcare is called healthcare sharing. These organizations bring together a group of people, who each pay an affordable monthly amount and then share the burden of any medical expense a fellow member may incur. While prices, of course, vary by organization, they average out to be significantly lower than Affordable Care Act plans.

One of the largest healthcare sharing organizations, with over 200,000 members, is Liberty HealthShare. Offering a variety of programs at a variety of price points, Liberty HealthShare provides individuals with the ability to enroll for as low as $199 per month and families as affordable as $429 per month, both less than half the price of Affordable Care Act plans. This saving isn’t offset by high deductibles either. The annual unshared amount (the equivalent of a deductible) for Liberty HealthShare plans is $1,000 for individuals and $2,250 for families, again less than half the average for Affordable Care Act plans. This cost savings for members is made possible by a number of different factors but none more so than Liberty HealthShare’s non-profit status, which allows them to keep overhead expenses low.

Ultimately, that may be the solution to America’s healthcare problem. Until we have a system that is designed to help people instead of making profits, costs will continue to rise and quality of care will continue to fall. As we march towards next year’s elections, you’ll hear many ideas proposed by candidates, cable news commentators, and everyday Americans, but at the end of the day, a template for success may already be out there. Healthcare sharing has been around for decades and there may be no better time than now for it to take center stage in the healthcare debate.

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