A few weeks ago, Atlantic writer Neal Gabler described how, like many Americans, he has virtually no savings. While he was pounced on (after all, he has a nice house in the Hamptons), that shouldn’t distract us from the larger picture–too many Americans have virtually no savings to speak of. From the Federal Reserve:
Only 53 percent of respondents indicate that they could cover a hypothetical emergency expense costing $400 without selling something or borrowing money. Thirty-one percent of respondents report going without some form of medical care in the past year because they could not afford it.
“I had a health emergency” was the single most cited hardship at 37 percent (pdf).
Any system built around significant deductibles and co-payments becomes a nearly automatic way to go into debt when you don’t have $400. As I’ve noted many times, if total costs run to a couple thousand dollars (or more), there’s just no way to afford this.
Of course, we could make it such that the bottom 47 percent would essentially not pay for healthcare*. But at that point, when you are literally halfway to universal healthcare, why not just go the rest of the way?
*For the elderly and the poor, many, though not all, of these costs are picked up.