For the average American, health insurance is one of the largest expenses after housing. The middle class is hit hardest with this, as really low income families often qualify for free or discounted health insurance, and wealthier families can afford to pay health insurance... but the middle class is unfortunately stuck, paying through their nose just for basic health insurance, and that is assuming they don't have any preexisting conditions which raise their rates even more. Alternatively, people go without health insurance at all, and then when calamity strikes or medical intervention ends up necessary, they end up thousands of dollars in debt.
Its a rough situation that definitely needs to be solved, and unfortunately I don't have a good solution to offer, but I hope that somehow there is a health care reform that truly solves the issue so that health insurance isn't such a problem anymore.
One thing I have to say is that in many ways, I appreciate the fact that I live in a country with national health insurance, so that I don't need to have this really large headache to deal with on a regular basis.
A certain reader who figured out my location posted a comment (with the intent of being nasty) asking me “Penny, why don't you share with your readers that your biggest way you save money is by living in a place where you don't have to pay health insurance?” And while it definitely wasn't intended to be food for thought (at least the way I read it), that comment was the inspiration for this post.
Is living in a place where I can get national health insurance really such a money saving move? That question is what I plan to tackle tonight.
On the surface, it might be simple. I don't need to pay for health insurance; that is a huge money saving move. End of story.
But is it?
There are many, many factors to consider.
Health insurance is never free. Someone is paying for it always. With privatized health insurance, as there is in the US, it is the insured that pay these fees. In countries like mine with national health insurance, it is we, the tax payers, who pay for this costly service. And trust me, the prices we pay for various taxes definitely shows this.
Where I live, there is pretty much the highest sales tax of anywhere I know, and this high tax also is paid on any service. Import tax is sky high; any electronics or cars or anything else imported from another country ends up nearly twice its original price once taxes are added. Gasoline is taxed at really high rates, as are many, many other things. In addition to all that, the income tax in my country is super sky high.
Of course, there is also the health tax taken off every paycheck you bring in.
So yes, we may not be paying a really high monthly fee to an insurance company, but we're paying sky high rates all the time on everything you could possibly imagine to our insurance company- the government.
You might think that with all the money we pay in to the system, we'd at least get our money's worth, but unfortunately such isn't the case. Every citizen gets a very basic service that doesn't cover much, and you're very limited to what treatments you can get. We need to jump through lots of red tape before we can get anything done, otherwise insurance will refuse to pay. (When my son was admitted to the emergency room with really low oxygen when he had pneumonia, I first needed to stop at the doctor for him to give us a referral to the ER, otherwise the onus would be on us to pay for hospital service.)
In order to qualify for more than the basic minimum of insurance coverage, we have to pay extra fees (for the ability to get a second opinion, use specialists, etc...), but in the case of chronically ill people, this usually isn't even enough, and they have to get exhoribantly expensive private insurance on top of everything else.
Exhorbitant taxes aside, is it cheaper overall to live where I do because of the “lack of health insurance costs”?
That is a tough question to answer, because there are many factors playing a part, and its still something I'm trying to figure out.
But one thing I know for certain- its easier to be penniless in the US than it is to be a pauper in my country.
My country has an enormous gap between the rich and the poor; there is very little middle class in my country. For the most part, either you're dirt poor, or you're filthy rich, and the dirt poor vastly outnumber the filthy rich.
Because of the tremendous number of poor people in my country, in order to make the statistics look better, the government keeps on lowering the poverty line more and more. A large percentage of those living above the “official poverty line” in my country are significantly more destitute than those living under the “official poverty line” in the US. There are a good chunk of people in my country that frequently go to bed hungry and don't own more than 2 or 3 outfits.
Another benefit for the government to keep the poverty line really low is they absolve themselves of the responsibility of helping paupers survive. In the US, if you weren't making it financially, and your income was low enough, you could qualify for WIC, food stamps, and the school lunch program to keep your family from starving. You could also qualify for housing assistance, heating assistance, and welfare. Where I live, there is no such thing. You could starve, be homeless, and completely destitute, and the government still wouldn't help you out in most cases. The only financial help I've heard of any of my acquaintances getting (note, I live in a very poor place with many poor neighbors) is a discount on government run daycare fees and a discount on their really steep property tax.
In the US, even if you're practically penniless, if you do things smartly, you can get most of what you need for very little money. You move to a cheaper place for cheaper housing, you buy old, cheaper cars, you buy things for bargains on ebay, craigslist, thrift stores, or yard sales. Where I live, even a 20 year old dilapidated car, more suitable for the junkyard than the road, will cost you a tremendous amount of money. The cheaper places aren't even cheap, and very few things are sold second hand, and there's no such thing as yard sales. You can have lots of stuff without spending a lot of money in the US; such a thing is not really possible here.
In the US, financial experts recommend that housing costs not exceed 25% of your income. In my country, unless you're really rich, that isn't really possible. Housing costs are prohibitive in relation to income. The minimum monthly wage in my country is $1000 per month. A small 2 bedroom apartment with a decent commute to the nearest city will cost you $800. That's 80% of one minimum wage income, and 40% of a couple's income if they both worked minimum wage jobs. In the city, a small 1 bedroom apartment can easily be $1000 per month or more, an entire minimum wage salary, leaving absolutely no money over for any other expense.
You may be thinking that minimum wage isn't relevant to the average person, becauase after all, only grocery baggers make minimum wage. You should know that where I live, most of the jobs out there are minimum wage and slightly higher. Even many professional jobs that require advanced schooling or special skills make minimum wage or slightly higher ($1000-$1200 per month). This includes medical secretaries, physical therapists, social workers, and carpenters, to name but a few. A school psychologist can make as little as $875 per month!
In fact, I'm one of the few people I know that isn't rich whose housing costs are only approximately 30% of our total income and not over 50%, and that is only because my family is willing to squish all 4 people into a 450 square foot apartment out in the boonies. And until I got my steady writing job, even this same small apartment was 45% of our income! In the US, out in the boonies, and even in real cities, you can usually find homes with payments less 25% of your income. In my country, not so much.
Because housing is so expensive where I live, you'll often find a family of 8 or 9 living in a three bedroom apartment, and families of 6 or 7 living in a 2 bedroom place. That doesn't usually happen in the US, as finding a bigger place for not so much money is doable, if you look hard enough and are willing to move a little further out.
So... is it really cheaper for me to live where we have “free health insurance” than in the US? I think not.
For the record, if I lived in the US, I would most likely be eligible for Medicaid, and I would have no problem having it for my family. But even here, where I have “free” health insurance, I don't take advantage of it, and we rarely go to the doctor. All 4 members of my family probably go to any doctor no more than 5 times a year on a regular year, and no more than 10 times if I'm pregnant. We don't rely on the doctor to diagnose- its a hassle to get to the doctor, and since I have a father who is a doctor, I usually call him up with the symptoms and get a diagnosis from him, without needing to go to the doctor. We rarely ever take medication in our family, prefering a natural method of treatment if possible. We don't vaccinate either (at least as of now). And I plan on paying for a home birth out of pocket next time I give birth, because even national health insurance here doesn't pay much.
If I would live in the US, I'd probably do things the same way as I already do, which would make health insurance a moot point, pretty much. And if I made enough money to not qualify for Medicaid, I'd probably get catastrophic coverage and have a health savings account to pay for any health issues that come up. Then again, if such a situation were relevant, I'd probably look into it in greater detail to determine exactly what I would do.
So, is it really cheaper for me to have national health insurance? Is my best “money saving method” to live in my country of residence?
I honestly don't think so. Where I live has a very high cost of living in relation to income, and even our health insurance comes at a price. Better stay in the US if you're looking for a way to save money- its cheaper, on the whole, to live there.
ETA: I just wanted to add that I am in no way minimizing the struggle that many, many, many Americans are going through to make ends meet. I know that the economy in the US is down the drain now and that things financially are very difficult. You have my sympathy completely if you're one of those who are struggling.
The point of this post wasn't to say that everything is fine and dandy in America and that it's terrible where I live, because that would be a lie. All I'm intending to say is that moving to a country with socialized medicine is not the panacea that some people seem to think it is. There are pluses and minuses financially in every place around the globe. There is no "perfect solution" to financial troubles.
What do you think about the whole health care crisis in the US? What do you think is a good solution to the issue? National health insurance, or something else? What are your dreams about health care?
What do you do about health care in your family? Do you have health insurance? How much does it cost you? Do you have to pay really high deductables as well? Or do you not have health insurance, and if so, how do you deal with medical issues that come up?