image7

The Secret Health Care Tax

  

You already know that government levies a Medicare payroll tax of 1.45% on your income. But this is only pennies compared to the hidden health care tax that cost-shifting creates. You pay this hidden tax each time you receive medical care, and in your insurance premiums.

How Large is the Hidden Tax?

The tax varies from at least 50 percent to 300 percent or more.


Here’s an example. Medicare pays a doctor $50 for an exam. You or your insurance pays the doctor $75 to $150 for the same exam. The extra that you pay is the hidden tax resulting from cost-shifting. The doctor shifts the cost from the Medicare patients to you. You pay more because they pay less.


Imagine if you had to pay a 50 percent or 300 percent hidden sales tax on a car. Your $20,000 car would be taxed an additional $10,000 to $40,000 instead of a sales tax of 7 percent - $1,400. 

How Can We Expose this Hidden Tax?

We require the provider to show the hidden tax on their bills. We expose the hidden tax by requiring all medical bills to show the Medicare-allowed amount alongside the provider’s billed charge for the service. 


Examples: 

  • You receive a bill for medical services from your provider for $200. You see that Medicare allows $100. Your tax is 100%.
  • You have surgery. Your provider bills you $10,000. You see that Medicare allows $2,000. Your tax is 500%.
  • After an MRI, your provider bills you $800. You see that Medicare allows $200. Your tax is 400%.  


For a more complete understanding of the Hidden Health Care Tax, see this article.

Access Minnesota Measurement Study on Health Care Cost here.