Health Care Plans Work Best if We Have Black Ink, Not Red Ink
Rolling out a universal health care plan costs money. Any plan must begin with fiscal soundness.
Here is where our country stands. In 2024, the United States spent almost $5.3 trillion in health care expenditures.1 Below is a breakdown of who paid what.
| Federal Government | $1.652B |
| Households | $1.459B |
| Companies | $967B |
| State and Local Governments | $860B |
| Private Sponsors | $391B |
If we model our All-American Care program after the national health insurance plan in the Netherlands, we need to balance the books. Individual premiums paid by households, out-of-pocket expenses, and corporate payroll taxes must equal $2.426 trillion, the sum total that households and companies paid toward medical care in 2024. Otherwise, the country could go further into debt.
But first, why would we want to copy the Netherlands?
For one, they use ideas and practices that we as Americans are familiar with, i.e., we contact an insurance carrier to take out a health insurance policy. In addition, they have a system of co-pays and deductibles that we all know very well while people take out private supplementary plans to cover services like routine dental work and eyewear, ancillary benefits that are not covered in the Netherlands under a basic health insurance scheme.
In addition, their plan works. The Netherlands devotes only 9.8 percent of their GDP to health care compared to 18% in the United States. Plus, the Dutch live, on average, 3 years, 4 months longer than Americans do.
Finally, why reinvent the wheel?
Household Debt
Assume then, for argument’s sake, that we finance All-American Care in the same manner the Dutch fund their universal health care plan, using a blended financing approach. The table below summarizes the projected funding sources for households using Dutch assumptions. You can follow along with the math at the bottom of the page.
| Premium income | $574B2 |
| Out-of-pocket expenses | $175B3 |
| Supplementary insurance | $73B4 |
| Government coverage for children under 18 | $301B5 |
| Tax on premium income | $94B6 |
| Total Household | $1,217B |
Two things here. Under Dutch rules, the government covers all children up to age 18. That means in an All-American Plan, the government would relieve households of an estimated $301 billion of child health spending.5
Additionally, the federal government forgoes another $316 billion annually by excluding employer sponsored insurance as taxable income. If we follow the Dutch model, premium income comes from after-tax income, allowing the government to recapture some of the money it had previously forgone.6
Even so, household contributions are still short $242 billion in funds needed to properly finance an All-American Care plan.
Business Debt
Likewise, business contributions also fall short of the funds required to finance our health care plan. Following the Dutch way, businesses would pay a 6.51 percent payroll tax on the wages of each employee they have working for them up to a salary cap of $92,320 a year.
Using a 6.51 percent tax rate, businesses would only pay $347 billion into the system compared to the $967 billion they now contribute to our health care financing, a funding gap of $620 billion.7
If we want employers to shoulder more financial responsibility, we need to modify our funding formula. What we need instead is a Dutch financing model with American characteristics. Our first rule in making any such modification should be: keep it simple; stick with the familiar.
Here, we can follow Social Security guidelines: replace a 6.51 percent tax rate with Social Security tax rates. Tax employers 7.65 percent up to $184,500 on employee wages with a 1.45 percent tax on all wages thereafter.7 This concept is simple and familiar to Americans.
Under this method, employers would contribute $667 billion, still $300 billion less than the amount they should pay.
Combined, there is a funding gap of $542 billion between what household and employer contributions need to pay. Add on some startup costs, and the $542 billion gets bigger. How we should handle that funding deficit is the topic of my next blog.
Note: This is an ongoing series of blogs to develop an affordable, universal health care plan before the 2028 presidential election.
Selective References
Census Reporter. (n.d.). United States – Profile data. Retrieved May 6, 2026, from https://censusreporter.org/profiles/01000US-united-states/
Centers for Medicare & Medicaid Services. (2024). National Health Expenditure Accounts: Table 5 national health expenditures by type of sponsor. https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/downloads
Murray-Watson, R. (2024, June 19). Personal healthcare spending in the United States. HIPAA Journal. https://www.hipaajournal.com/personal-healthcare-spending-in-the-united-states/
European Observatory on Health Systems and Policies. (2025). The Netherlands: Country Health Profile 2025. https://eurohealthobservatory.who.int/publications/m/netherlands-country-health-profile-2025
Social Security Administration. (2024). Wage distribution of workers with taxable earnings, 2023. https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2023