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Comment by lettergram | Hacker News Reader

If I had cancer in the US a $65k bill really isn’t bad. Consider in the US taxes are typically <20%. So if you make $100k a year, you pay $20k in taxes. So you have $80k, minus insurance (let’s eat $500/month) you have $74k

In Germany (if I recall) it’s closer to 50% taxes so $50k a year.

Presumably you can expect cancer once or less, but effectively you only need ~4 years of income to make up for that $65k bill in the US. Not bad at all. Obviously that differs based on income, but you can a see how (for many people in the US) the system works great

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Germany's average tax rate (according to the OECD) for a one-earner married couple with two children is 34.3%, while the same in the US is 18.8%. Taking these, the difference for your $100k/year example would be about 15k. You'd have about 80k in the US, and about 65k in Berlin.

Now to compare cost of living - let's say you wanted to compare Berlin vs SF, for similarly ridiculous housing markets. A quick search[0] suggests that living in Berlin costs nearly half as much - Berlin's $65k is more like a San Francisco $130k.

Now the downside is that you're not actually going to get paid as much in Berlin - maybe $68k as a senior software developer, as opposed to $135k-ish in SF. Plugging these numbers into a couple of actual quick tax calculators rather than using the averages, the Berliner makes about $41k, while the worker in San Francisco makes about $87k - although these are both without going through an accountant to massage the numbers. After our magic divider, that's a difference of about $2.5k.

Perhaps the US allows an accountant to massage the numbers more than Germany, but honestly, as someone currently in Germany, that doesn't pass the smell test.

So all in all, you wind up with $2.5k a year over the Berliner with which to cover everything that Germany's system does. And this is one of the best case scenarios - a high-salary tech worker with good benefits. For everyone else in the US, their quality of life and access to effective healthcare is likely to be significantly lower.

[0] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

A high-tech worker living in SF is actually not “one of the best case scenarios.” As your calculations show, the insane cost of living blows out the somewhat higher income. In terms of actual prosperity, run the numbers for places like Iowa. Salaries are 1/2 as much in Des Moines than San Francisco, but a house costs about 1/8th as much. And 95% of people have health insurance. There is a reason people are actually flooding out of California and New York.

I wonder if the insane costs and dysfunction of coastal cities is one of the driving factors of the differences in politics between those places and the rest of the country. I live in a Trump precinct in a historically red but recently purple county about an hour from DC. Median income in my county is $90,000, and you can buy a family house in a good school district for $300,000. We might feel differently about politics if our incomes were no higher and houses cost $1.3 million and our schools were among the worst in the country. But that’s California’s self-inflicted problem.

And someone not living in Berlin can live significantly cheaper too - do you want to pick a city similar to Des Moines in Germany?

EDIT: I took your number of 1/2 as truth, went through the numbers, and... our worker in Des Moines makes about 5k a year more than the one in Berlin. It'd still take 12 years to pay off the person above's unexpected medical expenses.

Then, after running the numbers for a high-tech worker, do you want to run the numbers for your janitor?

The definition of "health insurance" in the US is weird - it doesn't actually seem to mean you're going to be able to be able to access either expected or unexpected healthcare needs at a price you can afford.

> I took your number of 1/2 as truth, went through the numbers, and... our worker in Des Moines makes about 5k a year more than the one in Berlin. It'd still take 12 years to pay off the person above's unexpected medical expenses.

That's probably quite accurate. But most people don't have a $60,000 unexpected health expenditure before they're eligible for Medicare at 65. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5865642/

> We calculated this estimate as follows: the graph shows that, on average, a hospitalization increases the annual probability of going bankrupt in the following 4 years by 0.004. Multiplying this figure by the annual hospitalization rate of 7.8% for our population (which we calculated using the 1999–2010 Medical Expenditure Panel Survey) reveals that 0.031% (0.004 × 7.8%) of the population goes bankrupt each year as the result of a hospitalization.

If you extrapolate this out over the 40-year period covered in the study (it covers people ages 25-65) there is just a 1.2% chance that you'll go bankrupt as a result of medical debt in your working lifetime. In a country of 205 million working-age adults, that amounts to 2-3 million people. That's why you see so many news stories about it. But the odds of it actually happening to you are fairly low. Meanwhile, the higher taxes from universal healthcare are something that affect 100% of people.

If you ask people "would you rather make $5,000 more per year, or have a 1.2% chance that sometime in your working life, you'll have to declare bankruptcy due to exorbitant medical bills?" You can't say it's an irrational choice if people choose to have more money in their pocket now.

> The definition of "health insurance" in the US is weird - it doesn't actually seem to mean you're going to be able to be able to access either expected or unexpected healthcare needs at a price you can afford.

And what are you basing this on? I've got a wife and two kids. We've need to rely on our health insurance for everything from a car accident that almost resulted in a pre-term birth, to child births. The system is chaotic and confusing, but as long as you're on top of the paperwork the coverage is usually very good. According to Gallup polling, people have negative views of the healthcare system as a whole, but most rate their own coverage as good or excellent (69%) and their own healthcare service quality as good or excellent (80%): https://news.gallup.com/poll/245195/americans-rate-healthcar....

> And what are you basing this on?

Talking to working-class friends in the US about their access to healthcare. They feel concerned about the price of going to their doctor about things that our doctors urge us to talk to them about. Routine, expected medical treatment often takes years of saving up, and I've had friends die before they managed to get that treatment. When people wind up with an illness requiring ongoing treatment, any additional money they might make quickly goes down the drain.

They also feel scared about losing their job, and therefore their access to healthcare, if they ever become ill enough to have to call off sick, thus compounding the problem.

Yes, it's rational when you're well-off to want to keep your money. But I'd very much prefer to make sure the people around me have real access to healthcare than that I can maybe buy a slightly nicer house.

I'm sure that as you say it works out for most people on a purely rational game-theory economic sense but I would definitely chose 100% coverage over an extra $5k/year.

The whole system (not just health care) seems so stressful and antagonistic in the US.

If I had an extra $5k/year I'd probably just spend it on meaningless consumption like a bigger TV or a better car, where as not having to give a second thought about costs for medical care or higher education for my kids gives me so much more peace of mind.

Also keep in mind that not everybody has their proverbial shit together. You have to be resilient and make a lot of right life choices or you can fall into a pretty deep hole. The "paternalistic" approach of welfare states like in central & northern Europe means that as long as you basically "follow the rules" (like not breaking the law & having/keeping just about any job/career, even working-class ones) you're going to have a decent life, at least materially.

> If I had an extra $5k/year I'd probably just spend it on meaningless consumption like a bigger TV or a better car, where as not having to give a second thought about costs for medical care or higher education for my kids gives me so much more peace of mind.

We do. The median house in the US is twice as big as in Germany or France. We have 50% more cars per person than Germany and almost twice as many as France. Even excluding healthcare (to exclude the effect of inflated healthcare costs in the US), per person household consumption spending is 50% higher in the US than France, based on OECD data.

I'm not sure if this means you agree with me or disagree?

America is a staggeringly wealthy country and yet you spend all that wealth on trinkets while saying you can't afford universal healthcare, free education, fewer working hours, more vacation days, paid parental leave & other social benefits almost every other developed country provides their citizens.

We get comparable treatment as Germany in Australia and pay comparable tax to America. I don't buy that this is a luxury of high tax paying countries. Something is systemically wrong in the US.

Yes. The problem is we simply pay much more for treatment and medicine in the US because it cost more.

It’s actually an issue where I can see the landscape changing rapidly, and fully expect major changes in the next 5 or so years.

Total income-related taxes+health insurance in California are IIRC similar or higher than Germany. Also in either case the taxes on $100k/year are way less than 50%.

EDIT from what I can tell from very quick googling total taxes on $100k in California would be ~29% (not including health insurance) where as in Germany they would be ~34% (on $100k = ~€92k, including health insurance).

So I guess whatever's better in that example depends on if you think German health insurance is worth 5% of your income. Your $500/m amount to 6% of income so similar to Germany either way.

Keep in mind this is for single & childless, and Germany has outrageously generous tax breaks for having children as well as being married when one spouse earns a lot less than the other.

My number for Germany comes from https://www.brutto-netto-rechner.info/gehalt/gross_net_calcu... & includes Solidaritätszuschlag & health insurance.

But it depends on state and stuff like church taxes (optional, you can declare being atheist & pay none) plus other things like marital status, tax classes, which public health insurance you choose, etc.

And the end of the day you pay similar taxes on income in Germany as you do in a high-tax US states like California.

I get different numbers from here: http://www.parmentier.de/steuer/steuer.htm?wagetax.htm

On 92,000 Euro I get 45% total. In California it’s 30%. Moreover, if you’re making $100,000, you’re almost certainly getting health insurance as part of the salary in California, so you don’t need to add the cost of health insurance on top of that.

Ah, I think I see the difference - for singles (class I) it gives you 43%, I mistakenly chose the married category (class III, in my mind that was the "default" tax class - probably cause that's how I have always filed in Germany), in which case the rate is 33%.

After taxes, health care and Solidaritätszuschlag, your taxrate for 100k ist closer to 42% in Germany

Not sure what you put in to get that number (keep in mind that $100k is roughly €92k) but there are many possible variables that can change your tax rate. In my personal case it is significantly lower than the number I posted above.

I used mostly default values in the first online calculators I found for both California & Germany in the example in my original post.

Just from personal experience: 42% is pretty much on the dot. It might be that with 92k you're still taxed in a lower class (or maybe you're married and thus getting a discount).

Yes, I chose the wrong tax class by mistake.

My personal tax rate is even lower than that as we have 2 kids & my wife and I file together (both self employed so we add up our incomes and file with all tax bracket at double the threshold). I think we ended up paying just over 15% off the top of my head but don't quote me on that (I earn less than €92k but still enough to have a very comfortable life).

I knew you pay more as a single/childless person but I didn't realize just how much more - which makes it all the more surprising that Germans have such a low rate of both marriage and reproduction.

And what if you make the US median individual income of $31k?

If you make 31k, you likely don't have the good health insurance of the OP, and your final bill would be hundreds of thousands (i.e. it couldn't be afforded)

In reality you would end up on Medicaid. There would be limits to what hospitals you could go to for treatment, but you wouldn't be stuck with the bill in the end.

Basically the way the American healthcare system works, they will eventually pick up the tab. They just go out of their way to bleed you dry on the way.

If you make $31,000 as a non-elderly single person, you’re at 250% of the FPL and there is an 89% chance you’re insured: https://www.cbpp.org/uninsured-rates-are-higher-at-lower-inc.... Under Obamacare, there really isn’t any health insurance plans that will leave you with hundreds of thousands in costs without coverage (leaving aside surprise out-of-network doctors and that’s a loophole people on both sides of the aisle are trying to fix).

About 15.75% according to https://neuvoo.com/tax-calculator/?iam=&uet_calculate=calcul...

Like the Hunger Games. For most people it works great, as long as your name isn't drawn.

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