Response to Dave Ramsey’s “Math” That Explains the Affordable Care Act to Democrats & Republicans.

Via Jennifer S. White
on Oct 15, 2013
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Oh, Dave Ramsey.

I’m so thankful that I actually took the time to watch that video that some of my Facebook friends are sharing the crap out of because now I know how stupid it is.

Simple “math,” huh?

According to Ramsey, he’s figured out in a completely non-biased way using math that the Affordable Care Act is “communism.”

“You’re not exempt from math if you’re a Republican, and you’re not exempt from math if you’re a Democrat…You have to pull your head far enough out of your politics to actually have an original thought,” he says. Sounds great, right?

I continued to watch and, like this blog suggests.

“Initially, I was pleased to see that he began the segment stating that math is important, and that it doesn’t change whether you’re a conservative, liberal, Republican, or Democrat.  And then, I waited for the math…

I’m still waiting.”

But, hang on. This is a non-biased, judgment-free zone, for everyone to gather the “facts” on the Affordable Care Act.

“Dave Ramsey’s not a Republican, you say?  What a lark—what an absolute laugh!  The man begins by using liberal and socialist as synonyms, and ends by complaining that the Affordable Care Act amounts to communism.  But that’s fine, I won’t kill the guy for his political stripes—it’s just frustrating that he puts on this façade of neutrality when it’s clear to which camp he really belongs.”

Not to mention the fact that I have yet to see a non-Republican leaning friend on Facebook or Republican-themed website share this as such an “awesome” link that we all need to watch.

I won’t be sharing the original video with you, because I think it’s crap, but trust me that you can easily find it yourself. If you’re lucky, though, this won’t keep popping up in your Facebook newsfeed pretending to be the answer we’ve all been looking for.

After all, I’m sure that he can “help people save money by telling people to save money, but that’s about it.  Beyond that, I would certainly be careful about taking his financial advice to heart…I mean, he can’t even do math.”



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Ed: Bryonie Wise


About Jennifer S. White

Jennifer S. White is a voracious reader, obsessive writer, passionate yoga instructor and drinker of hoppy ales. She’s also a devoted mama and wife (a stay-at-home yogi). She considers herself to be one of the funniest people who ever lived and she’s also an identical twin. In addition to her work on elephant journal, Jennifer has over 40 articles published on the wellness website MindBodyGreen and her yoga-themed column Your Personal Yogi ran in the newspaper Toledo Free Press. She holds a Bachelor’s degree in geology, absolutely no degrees in anything related to literature, and she currently owns a wheel of cheese. If you want to learn more about Jennifer, make sure to check out her writing, as she’s finally put her tendencies to over-think and over-share to good use. Jennifer is the author of The Best Day of Your Life, available on Amazon and Barnes & Noble. She's also as excited as a five year old to announce the release of her second book, The Art of Parenting: Love Letters from a Mother, available on Amazon.


20 Responses to “Response to Dave Ramsey’s “Math” That Explains the Affordable Care Act to Democrats & Republicans.”

  1. Yogacult says:

    Yes, that video made it to my Facebook newsfeed. I found his condescending rant a bit hard to take. The denominator is the number on the bottom of the fraction, Poindexter. This number is guaranteed to grow larger under the new system. The numerator is the number on the top, it may or may not grow proportionally larger than the number on the bottom. He is alluding to loss ratios increasing and rates going up. There's no basis for his argument, he is only doing part of the math. "Simple 8th grade actuarial tables". Hogwash.

  2. Lolo says:

    So this post is just to say he is a Republican? You aren't going to say anything about his video? Can you tell me what was wrong with his "math"? His "simple math, huh?"

  3. Jesse says:

    I agree with you 100%. I did a search immediately after watching this video and came across your site. So, thank you for the response.

    The thing I couldn't help thinking from the very beginning of his rant was… If we're doing math… How do you leave out the bit where they have to take "Everyone" in (that's true), but also… Everyone (including the young, healthy, etc…) has to sign up. HAS TO! This balances out that "math" bit he was talking about.

    There's nothing more aggravating than a Republican masquerading as an unbiased fact bringer. =)

  4. Kris says:

    I too was expecting a logical response to his "math" showing how it was wrong. Instead all the author does is state that she's discovered his true political bias. Was this really worthy of posting?

  5. Look at the blog link provided. Rather than regurgitate these statistics, I chose to direct you there. It goes into a lot of detail.

  6. Hey there. Please read my response above and note that the blog link that I shared goes into quite a bit of detail surrounding his poor "math." I included some numbers but then opted to leave them out and direct you there instead (and actually self-noted later that the ending I chose made a little more sense had I left these numbers in). Regardless, if you want more detail as to the responsive argument that I'm presenting to this fictitiously factual video statement, please check it out. (And note that I often include links with more detail when I write current events and these are the red highlights.)

    Examples: "I’m still waiting. In fact, the only time Dave actually mentions numbers, they’re either hypothetical, or outright lies. For example, he states that 46% of Americans don’t pay any taxes, right before he states that we all pay 15% of our salaries to Social Security. Are you fucking kidding me—this guy’s a financial guru of some kind?"

    and this: "The tax rate on Social Security is 6.2% for employees, 6.2% for employers, and 12.4% if you’re self employed. So, I guess if you’re self employed, it’s close enough to 15% that I’ll give the guy a pass, but for the vast majority of us, it’s nowhere close to that (and don’t be a dummy and suggest that the employer would pass on all 6.2% if they didn’t have to pay the tax; they’d keep all or most of it)."

    Not to mention that one thing that really bothered me was his suggestion that people in lower income brackets get sicker more often. Well, hmmm, maybe that's because they have—wait for it—poor healthcare because they can't afford it.

  7. Thanks, Jesse. Actually my search for intellectual responses also came up with nothing besides the blog link I shared, which is what inspired me to write this up and get this out there quickly before people were brainwashed into believing this crap.

  8. Again, see the response below. Yes, it's absolutely worth posting but I chose to share a link to a great argument against his supposed "math," so if you didn't click on that, well…you missed a lot.

  9. Molly says:

    He left part of the equation out, the healthy people paying in. His scenario was based only on the unhealthy buying in! According to his diatribe car insurance is communism? As well as security cameras? What a jack…. His video irritated me all night, I can't un-see it. It is not one plan for all people or it wouldn't be 2000 pages. I now kno why I never been to his university! I bet it cost a fortune for his DVD package. I have no idea, never looked it up? I apologize, but I needed to express my irritation. Of course, the CEO and Board salaries of double digit millions won't be touched for the sake of our nation, but that's not pat of the math, it's just a sad part if our reality. He could afford a wireless mic, I'm certain. Just sayin

  10. It really is gross—especially pretending to be an un-biased news source (hmmm, where have we heard of that before?!)

    His math is so off, he doesn't make sense and he makes blatantly discriminatory statements that, like I stated in a comment above, is part of the reason that we're passing the Affordable Care Act—so that everyone has a (slightly more) equal chance to be healthy.

  11. Also, I'd like to mention as a side-note that well before this political discussion came up after the shutdown, there are already several articles intelligently stating how his math in other arenas is off. (He's a financial Dr. Phil.)

  12. Mike Livingston says:

    The 15% Dave Ramsey refers to includes Medicare. The employer must remit 2.9% of all wages for Medicare. The 12.4% on FICA + 2.9% on Medicare adds up to 15.3%

    The 46% number used to identify taxpayers who don't pay income taxes, includes people who pay in but at the end of the year, receive a refund sufficient to cover all of their annual income tax. This number has nothing to do with the previous 15% figure Ramsey spoke on.

    There is an assumption made in your rebuttal that adding the uninsured will offset those with a prior medical condition. I imagine, not trying to put words in your mouth, you anticipate this will offset the overall costs for everyone. There isn't sufficient statistical evidence to support this assumption or that costs will be reduced for everyone because those without insurance are being treated. In fairness to both, I would suggest this remains to be proven. An argument could be made just as Ramsey and you both have, when in the final analysis we don't know yet. Current anecdotal findings suggest everyone appears to be suffering from sticker shock.

    Eventually the computer program issues will be resolved and we will have a better understanding of the costs. I tend to believe there's no such thing as freebies. There's always a price to be paid when the government adds their administrative cost. So far, there's no accurate statistical data you can point to suggesting Ramsey is wrong.

  13. Lisa says:

    Check out Medicare. Government administrative costs for health care tend to be much lower than those of private companies.

  14. Alan says:

    Good luck, Mike trying to set the record straight. Frankly, I'm not even sure why people are harping on him for his math, since he didn't really present what I would call math, at least in the sense of number-crunching. I wouldn't have known of Ramsey's video if it hadn't been reported by Jennifer. And after watching I can say I don't much care for his style of expression. Seriously, he suggests an actuarial analysis of the impact of Obamacare can be done by an 8th grader, but if that were true then how would he explain that professional actuaries earn $150K to $250K a year. Perhaps his deficiency in that regard is why he spent most of his time in the video engaged in irrelevant commentary and then never gets around to doing any math that pertains to the ACA. He's a radio/TV personality who's good at what he needs to do to maintain his ratings. And though he doesn't have any professional designations like CPA, CFP, or ChFC, he does have a bachelor's in finance and gives decent advice to people wanting to get out of debt, despite his apparent condescension.

    In contrast, Jennifer's places her confidence in an anonymous male blogger in Oregon whose occupation is simply 'human' and whose inflated sense of ego leads him pen a rant entitled, "Taking Dave Ramsey to the Woodshed." I'm stunned that anyone would point to that blog as an example of 'intelligent' analysis. To use Jennifer's own quote: "Are you fucking kidding me?"

    Anyone who runs a business well knows that the payroll tax (also known as FICA) is 15.3%, and not 12.4% as the blogger wrote in error. True, Ramsey was sloppy in referring to the payroll tax as simply SS. And regarding the percentage of taxpayers paying no tax, Ramsey clearly stated 'federal income tax,' though again he got sloppy a few moments later and simply called it a tax. Such nitpicking, apparently, is what constitutes taking Ramsey to the woodshed. Ramsey of course is accurate regarding nearly half of taxpayers not paying any federal income tax, and in fact many working poor who pay no income tax may actually get a refund credit of as much as $6,000 they never paid in. Ramsey of course neglects to mention that working people who pay no income tax must still pay the FICA tax and numerous other misc taxes when they buy fuel, clothes, etc.

    Anyway, this is just a long-winded way of saying I think you're spot-on with each of your comments and that no credible statistical data exists to show otherwise.

  15. Alan says:

    Lisa, your statement may be true, or half-true, or not true, depending on what you mean by "much lower." Such language is clearly subjective, so perhaps you can further explain your opinion, or at least cite your sources of fact.

    Senator Barbara Boxer made a similar claim—"There's a 1.5 percent to 2 percent overhead in Medicare. The insurance companies have a 20 percent to 30 percent overhead."—and it was found to be unsustainable.

    Even if Medicare's administrative costs are indeed a bit less than that of private companies, it's only because the math ignores some of the overhead, such as the deadweight costs of tax collection as part of Medicare's administrative cost. One might also consider that Medicare calculates the % based on costs per dollar of medical expense rather than costs per patient. Private insurers actually spend *less* in administrative costs per beneficiary. An analysis of administrative expense based on total dollars of expense rather than total number of beneficiaries will favor Medicare, since Medicare beneficiaries incur most health care costs on average.

    Nor do admin costs include the massive fraud that is rampant in the system. The Medicare program exceeds $500 billion in cost, and the government's own estimate of improper payments is somewhere in the range of $50 billlion.

  16. Steven says:


    Dave Ramsey gave the principles behind the math. Anyone who understands insurance and a basic business model knows that the rates WILL increase. You cannot accept a pool of high risk customers and force insurers to charge them the same rate without the rest of the rates increasing.

    Dave was also correct in his analogy on Social Security. Regardless of how you try and deceive yourself in believing you pay little for SS and Medicare, your employer and you pay 15.3 percent (12.4 SS and 2.9 Medicare). The rate of return in comparison to personal investment accounts is paltry. Why would we ever be satisfied by paying more and receiving less? This is the track record of government and you believe the Affordable Care Act will be different?

    Also, Dave was correct on the percentage of people who do not pay Federal Income Tax. You can try and get around it by stating all these other taxes which are earmarked that people pay but federal programs outside of the earmarked ones are paid with federal income taxes. Those people who want health care at a cheaper rate then someone else is going to have to pay the doctor. That someone else will be those who earn more. I am not satisfied with the idea that just because I earn more that means I am forced to pay for those who earn less.

    Which brings me to my last point and health, you make the assumption that people who have lower income are sicker because they do not have access to health care. This is FALSE. Medicaid is currently in effect and anyone eligible can get care. I have a lot of poor family members and I can tell you much of the reason for their poor health care is their poor daily choices. If those people made better choices then not only would they be healthier but they probably would have more income.

    I am not sure your income level Jennifer but the main issue with supporters of this act is they believe that health care will improve and someone else will pay for it. That someone else is YOU and you most certainly will pay more than you do now. I would encourage you to be sober minded and look at what you are paying and see how fast the costs escalate. Know that once a federal government program is entrenched it is virtually impossible to get rid of.

  17. Hawk says:

    Here's some math. The group policy at my company went up over 20 percent this year, and with 20 percent increases for the last five years, the average annual premium per employee is now at around $10,000, for healthy professionals ranging in age from 25 to 60. I've heard varying estimates of the number of previously uninsurable people the government wants to sign up on the exchange, but let's just say for the sake of discussion that it's 30 million. Based on the premium we pay means the cost to insure the previously uninsurable is around $300 billion. We need 300 million people to pay $1,000 each to cover the cost of insuring the uninsurable, not counting the cost to insure the insurable.

    The math just doesn't work. There is no such thing as free health care. Until last year, we had always provided 100 percent paid health coverage to all full time employees for the 28 years we have been in business. Last year, we couldn't cover it anymore without either letting someone go, or making the employees pick up the increase. Now this year, another 20 percent. Next year, who knows what will happen when this mandate forces all employers to go searching on a government web site. I don't know anything about biased studies or actuarial tables, but I do know about what is actually happening to our small company since this law was passed, and it is a killer.

  18. Johnny5 says:

    Let's talk about the math because he left several variables out of the equation. 1) competition on the market place. 2) limits on the amount of profit an insurance company can receive (the 80/20 rule) before they have to issue refunds to policy holders. 3) transparency in the hospitals (helps make hospitals accountable and make it easier for you to shop around…creating competition which is a mechanism for driving costs down) 4) More people purchasing insurance (and based on his own words this would drive cost down) 5) Government Subsidy that a person may qualify for. 6) inflation 7) rising costs of healthcare with or without new health care law

    Now an intelligent conversation about the math would have included these points. It's possible that he may have still reached the same conclusion, because these are variables that we don't know how are going to play out in the real world. But he doesn't do that…he completely ignores this part of the math. Why would he do that? And by the way, Obama's original plan had also included a government run insurance program to help create more competition. That was compromised out of the final law.

  19. The goal of this article is not to present the completely opposite side, which obviously, you did not understand in the slightest. The goal was to remind the many, many people who I personally saw posting this "factual" video that you simply cannot believe something is true merely because the speaker claims it to be so. In short, it was a reminder to question "un-biased' claims, especially in political spheres. The last thing that I really wanted to do was promote another slanted view that's "as far from (your?) Republican as you can get."

    Additionally, your comment is neither the intelligent or factual response that you claim to be demanding from me. rather, you are horrendously insulting (which I believe was your intent) and you sought to personally attack me on a level that you obviously have no right to do so on. I hope further comments from you will be banned and blocked—well, if you have the courage to not be anonymous (like me).

  20. RetREMF says:

    "Everyone (including the young, healthy, etc…) has to sign up. HAS TO" No they don't HAVE to. They can simply pay the fine !