I’ve been arguing with a certain individual about health care and as a result I’ve looked up lots of numbers. Since this information is likely to be useful for anyone talking about health care I’ve decided to share it—some might call it being a good Samaritan.

How much do we pay for health insurance?

Employers:

9.95% of salaries: In the U.S. employers currently pay on average 8.5% of their payroll on private health insurance (goes up every year). They also pay 1.45% on Medicare taxes for a total of 9.95% of their payroll.

Employees:

Varies: Family health care premiums for employees are currently averaging about $3000 annually (taken from here) regardless of how much a person makes (no idea how good that coverage is). Therefore; the more money you make the less of a percentage it is of your income. Also, the less money you make the more of your money you’re devoting to health insurance premiums. This does not include co-pays for doctor’s visits, hospital care, drugs, etc.

Totals:

$2.16 Trillion: That’s how much the U.S. spent on private health care in 2006. Or, about 16% of the U.S. GDP.
~25%: That is how much of every dollar spent on health care in the U.S. goes to corporate profits, executive salaries, advertising, marketing, and the cost of paperwork (related to billing). In other words, that’s the overhead of private health care. Otherwise known as “inefficiencies”.

How much would we pay in a single-payer system?

The following assumes that HR 676 is what we go with for a single-payer system

Employers:

4.75%: 3.3% on top of the 1.45% they’re already paying for Medicare via payroll taxes (i.e. not taxed on income).

Employees:

1.45%: What you already pay for Medicare. HR 676 does not call for increased income taxes on individuals unless you’re in the top 5% of income earners (more below).

The Rich:

6.45%: The top 5% of income earners will have to pay a “health tax” on top of their existing 1.45% to Medicare. How much money do you have to earn to break into the top 5%? According to the IRS, about $137,000 (AGI)/year (AGI stands for Adjusted Gross Income which is IRS BS for about $330,000/year in reality—this is an injustice in itself, I’ll put more info in the comments).

Totals:

1.85 Trillion: That is a conservative estimate of how much it would cost yearly to give all Americans health coverage with zero co-pays and no premiums (i.e. free health care). It will probably cost considerably less (the reduced drug prices and paperwork costs alone could cut this figure in half).
3%: The overhead associated with a single-payer system. You can’t get away from all the paperwork, just most of it. This is actually the overhead associated with Medicare right now (believe it or not).

Other scary statistics:

• On average, if you’re under 65 and already spending more than $2000 on health care, you’re spending 41.3% of your income on it (2003 figure from the nchc.org link above).
• Half of all bankruptcy filings in 2006 were the partly result of medical expenses. 68% of them had health insurance.
• 30% of Americans say someone in their family delayed getting treatment (in 2006) due to the high cost of health care.
• Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

• 46 million Americans have no health insurance whatsoever.

There’s an article at Treehugger that points to a recent presentation by Matthew Simmons (a member of the National Petroleum Council) regarding Peak Oil. Essentially he outlines the insanely dangerous situation we’re currently mired in, how we’re about to be seriously screwed regardless of what we do, and what businesses will suffer the most as a result (i.e. who not to invest in).

I read the entire presentation and I would sum it up the same way Treehugger did, “Everything you wanted to know about Peak Oil”. It is far more thorough and to-the-point than the Wikipedia page and if you thought I had some scary things to say about it then you need to read it and see what the most powerful investment bankers in the world were just informed of. If I were an investment banker that attended this presentation I’d be investing in bunker right now.

My prediction: The U.S. will get its first taste of what Peak Oil is like in August of this year with the oil flow resuming by the end of September. The real Peak Oil apocalypse will hit on the 4th of July, 2008 (a long weekend).

This morning I read that the House is considering a bill to make price gouging on gasoline a federal crime. It made me wonder if Congress knows that is not going to fix the problem or if they’re intentionally showboating. Then there’s the conspiracy theorist in me thinking, “I wonder if the oil and gas lobbying groups suggested it to them as a misdirection campaign?”

Just about everyone knows (now) that gas is expensive “because oil inventories are down.” It has been repeated in the news over & over. But what does that really mean? Is it really a simple problem of supply and demand?

The problem is the rate of consumption. Imagine a bucket being filled with water at the same time as water is being pumped out. As long as you pump out at the same rate as you’re filling the bucket everything is fine. If the rate of water going into the bucket is reduced while the amount you’re pumping out stays flat you’ll run out of water. How long it takes to run out of water in the bucket depends on the size of the bucket and the rate you pump it out.

U.S. gasoline inventories are that bucket and it isn’t a very big one. In a good week we have 10 days worth of gas waiting to be sold. Starting about March, gas inventories dropped every week to a low of about 8.8 days worth of gas (see this). Last week inventories started going up again so the price of gas might go down but then again, it might not because Memorial Day weekend is coming up and that means a lot of gas is about to be burned.

When oil inventories start dropping again and there isn’t an excuse like, “we had a fire at a major refinery” or, “it was a long weekend” you can be rest assured that the U.S. is entering what I’m calling, “the permanent oil crisis.” We may already be in a permanent crisis if you consider that the smallest little disruption causes oil speculators to jump and gas prices to skyrocket.

So the question remains: Will Congress ever work to solve the problem or will they just wait until the U.S. economy is destroyed by it? Don’t say “the market will solve the problem” because the “problem” is an externality outside of the control of the market. Does a shipping line wait until oil prices drop before they ship things? Do you decide to not drive to work because gas prices are high? Does the power company decide not to meet demand because oil prices went up? No. When the rate at which we can obtain and refine oil falls below demand it will already be too late for the market to adjust.

We need to forcibly diversify the U.S. energy portfolio now. Which would you rather have: An economy that suffers for a few years while we invest in alternative energy (particularly infrastructure) or an economy that is suddenly destroyed as a result of inaction? By doing nothing our government will ruin us. The market cannot correct itself without a catastrophe. No one in our present government at any level can say, “no one saw this coming.”

Today on the IT Facts Blog there was a statistic from In-Sat that claims there will be 50.8 million PC-TV tuners sold worldwide by 2011. Why is this wildly naive? It assumes that people will still be getting their television by way of terrestrial signals, satellite, or cable. I.e. good old fashioned wastes of bandwidth.

No, by 2011 anyone who has a fast enough connection will be getting their “TV programming” over the Internet. No “tuner” required. It is the ultimate delivery mechanism: infinite channels, a world-wide audience, your choice of on-demand or streaming, extremely low startup costs, and you don’t have to go through any regulatory hurdles to start broadcasting or receiving video. All it takes is either a PC or a video appliance (like the Neuros OSD) and you’re good to go.

Update: jer insightfully pointed out in the comments that Internet-based distribution also removes competition for timeslots. Internet-based video distribution drastically increases your potential audience, but not having to compete for timeslots has the potential to both increase ad revenue and might allow shows that “can’t compete” on regular TV to continue operating since they don’t have to worry about competition. Here’s some examples of (great) shows that might not have been canceled if they didn’t have to compete for timeslots:

• Family Guy (returned to the air after DVD sales went through the roof—oops!)

• The West Wing

  Wikipedia actually has a page talking about this phenomenon dubbed the, Friday night death slot