On Taxes & Healthcare

Accident & Emergency 

Recently I had to see a doctor. There are several local surgeries (American translation: doctor’s offices) within a mile of me, so I registered at one, waited a day for the paperwork to process, and called in for an appointment. With the pandemic still very much a concern, the office offered me an in-person appointment, but also suggested they could have a doctor call me back within two hours for a phone appointment. I took the phone appointment. The doctor called about an hour and a half later, I explained the symptoms, and she suggested I go to the hospital to be examined where they have more diagnostic capability. 

I took the train to Kingston A&E (Accident & Emergency; American translation: Emergency Room), where I was triaged within ten minutes of arrival. Twenty minutes after triage, I was having blood drawn, and ten minutes after that I was speaking to a doctor. The doctor did an exam and sent me to radiology, where I waited about five minutes for an x-ray. Results came back negative within a half hour, so the doctor treated me with medication on the spot, had me wait around another 45 minutes for observation, and sent me off with a prescription. I was there about three hours in total, including getting the prescription filled. 

Total cost for all this was £9.15 to fill the prescription. (American translation: about $11.60.)

That on its own doesn’t seem too unusual, compared to America. Ten, fifteen dollars for a prescription is pretty normal, in my experience. But here’s the thing: that was the only cost. The hospital won’t send a separate bill. Neither will the doctor. Or the radiologist. I spent under $12 to go to the emergency room, be seen in a timely manner, and be treated. That is, in three paragraphs, why the British love the National Health Service so much. You get sick, you get treated, and you don’t worry about the bill.

But they’re so slow, you’re thinking. I was in and out of the ER in under three hours, and a fair chunk of that was observation time after I had seen the doctor. But you pay so much more in taxes, you’re thinking. So I decided to compare. 

Let’s talk about taxes

I’ve tried to make this comparison as apples to apples as I can, so I used my 2017 US tax numbers (the last full year I lived in the US) and my 2019 UK tax numbers (the first full year I lived in the UK). 

Income tax is the most obvious tax, but in the US we also pay Social Security, Medicaid, property tax (on real estate), personal property tax (on cars, boats, etc). But don’t forget the hidden tax: healthcare. It’s easy to ignore, but every dollar you spend on premiums, copays, deductibles, and scripts is effectively a tax. Look, I can’t go without health insurance. I’m a cancer survivor, my wife is a cancer survivor, and I have two kids. We get sick, we get treated, and we continue contributing to society. My opinion is that everyone should be so fortunate. 

I totaled up what I paid in the US, including my employer’s contribution to my insurance. We had no major healthcare expenditures in 2017, so I’ve used what I put into my flex spending account (which was used only for health-related expenses). 

I then did the same exercise for the UK. This included Payroll tax, National Insurance (which funds the healthcare system), council tax (like property tax, but also include my trash service), and TV tax (yep, I pay £13 a month to fund the BBC). 

The result

UK effective tax rate: 37.2%

US effective tax rate: 38.7%

The US is slightly higher, but honestly, it’s mostly a wash. I had two cars in the US, but none here. I lived in a low cost of living part of the US in Southwest Missouri, and I’m in a high cost of living area in southwest London. 

I basically pay the same amount of taxes in the UK as the US, when you consider the cost of healthcare. If I have a cancer recurrence while I’m in the UK, not only is it not going to bankrupt me, I don’t even need to worry about the deductible. I chose my primary care physician in the UK, just as I would in the US, and I was assigned the rotation doctor at A&E, just like I would in the US. I was treated professionally and quickly. The only real difference is that my £9.15 bill would have been a $500 or $1000 deductible in the US, plus a percentage of the total hospital charge. 

I’m going to leave you with a parting thought: If I made less money in the UK, I would pay less in taxes while receiving the same care. If I made less money in the US, my insurance premiums, deductibles, and general healthcare expenses would not go down, and might in fact go up if I had worse insurance.

We can do better, America.