Dwain Northey (Gen X)

Let’s take a moment to appreciate America’s healthcare system: a glorious, profit-soaked monument to inefficiency where we can’t do something as scandalously simple as basic arithmetic. I mean, if adding percentages was easy, we might actually solve problems instead of writing euphemistic reports about why nothing needs fixing.

Here’s today’s mind-blowing calculus (hold on to your pocket protector):

The average contribution between personal and business for Medicare sits at around 3% of earnings. That’s what both workers and employers chip in together to fund a basic safety net for grandma and people with chronic illnesses. Yet the average U.S. household shells out 10–12% of its income on private health insurance premiums — before deductibles, copays, prescription bills, ER markups, and the guilt-inducing $40 “facility fee” for a kidney stone.

Now here’s where the math gets juicy: imagine charging every dollar only 5% toward a nationalized healthcare system — no caps, no runaway premiums, just one simple rate — and poof! families, on average, would actually spend less than they do today. Lower premiums? More coverage? Heresy! That can’t be right… because profit margins exist. Also, logic is a socialistic conspiracy invented by algebra teachers.

Now — for the pièce de résistance — let’s talk overhead:

🎩 Private insurance companies — those heroic defenders of shareholder value — rake in administrative costs in the realm of about 12–17% of total premiums collected. These are your marketing campaigns, glossy billboards, executive bonuses, commissions to brokers, fancy lounges at industry conferences, and that inexplicable quarterly magazine about wellness that you never read.

🏛️ Medicare, that bland government program that somehow doesn’t prime executives for cushy board seats by age 45? Its administrative overhead sits roughly between 2–5% of total spending — depending on how you slice the bureaucratic pie and whether you count all the support activities in other agencies. That’s approximately one-fourth to one-seventh of what private insurers take just for paperwork and profit extraction.

Yes, technically there are arguments from the dark corners that if you measure per person rather than percentage of total spend, Medicare’s costs can look closer to private plans — because Medicare’s patients are older and use more services — but that’s like comparing the fuel cost of a space shuttle to a sedan by focusing only on how many peanuts astronauts eat. The gist is clear: private overhead is notably higher.

So let’s break this logic down for anyone clutching a TI-84:

🧮 If you pay more in administrative overhead and profit — 12–17% — plus all the other fees that only accountants pretend to understand,

and

📉 you could instead run an enormous program with 2–5% overhead and literally millions fewer billing disputes…

then

📊 rational math says: you’d save money.

But not in America! No, here we can’t do math but we can do profit margins! We love opaque pricing, inscrutable EOBs (explanation of benefits—an explanation of nothing), and denials that require an MBA to decipher. Because isn’t the point of healthcare maximizing shareholder value with a side of “hope this doesn’t bankrupt you”?

Meanwhile countries with universal systems and low administrative costs look at us like we’re using slide rules in a quantum computing lab. And we just nod, adjust our deductible, and wonder why the bill for that “routine visit” looks exactly like a small car payment.

So yes — in a world where 5% on every dollar might actually give people universal coverage and a break on premiums, we stare blankly at the ceiling and whisper, “But what will the CEOs do?”

Honestly, your circle analogy was kinder than what this whole system deserves.