Alex Blaze

Health care on paper only

Filed By Alex Blaze | May 05, 2008 2:30 PM | comments

Filed in: Living, Politics, The Movement
Tags: economic policy, health care reform, Purple Parasol

The NY Times has an article up about the state of health care in the US, specifically for the insured, or, more precisely, the insured-on-paper-only:

Mr. Corbin said that under their employer's health plan, he and his co-workers are now obliged to pay up to $4,000 of their families' annual medical bills, on top of about $1,600 a year in premiums. Five years ago, they paid no premiums and were responsible for only about $2,000 of their families' medical bills.

"That's a big jump," Mr. Corbin said. "You've just lost a month's pay."

More after.

The article takes the "soft economy" narrative (yes, they use the R-word in it, too) to explain why health care is so expensive, why businesses are cutting benefits, and why insurance companies are raising premiums.

The statistics all point to something having changed around five to seven years ago:

Since the recession of 2001, the employee's average cost of an annual health care premium for family coverage has nearly doubled -- to $3,300, up from $1,800 -- while incomes have come nowhere close to keeping up. Factor in other out-of-pocket medical costs, and the portion of the average American household's income that goes toward health care has risen about 12 percent, according to the consulting and accounting firm Deloitte, and is now approaching one-fifth of the average household's spending.[...]

"It's a bad-news situation when an individual or household has to pay out-of-pocket three, four or five times as much for their health plan as they would have at the time of the last recession," [Helen Darling, president of the National Business Group on Health] said. "Americans have been giving their pay raise to the health care system."

As coverage gets more and more expensive (about 17% of the average household's income in 2008, up from around 14 in 2000 and 9 in 1980), more and more businesses are going to look to individualized health care to try to save money:

While Mr. Nussbaum and other consultants say it is unlikely that significant numbers of employers will simply drop coverage for their workers, the weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles.

And while these plans often allow employees to put pre-tax savings into special health care accounts, they typically end up forcing the worker to assume a bigger share of overall medical costs. About six million people are now enrolled in these medical plans.

And, at this time, McCain's plan for health care (after Step 1, which is "Don't be sick") is deregulation and individualization (via moving the tax credit associated with providing health care from employers to individuals). I don't know many other times when prices were controlled for a commodity people absolutely need and are willing to pay anything for with deregulation.

Well, not anything. The article reports on a woman with Chron's Disease and arthritis whose employer's insurance priced her out of health care. Deregulation won't help her get health care either - no firm is going to want to insure someone who's going to be taking more out of them than she's paying in. But wasn't that the whole point of her having health care in the first place?

Yes, the economy's slow, but health care's not where we should be skimping, and this paragraph is the exact reason why:

Already, many doctors say, the soft economy is making some insured people hesitant to get care they need, reluctant to spend a $50 co-payment for an office visit. Parents "are waiting longer to bring in their children," said Dr. Richard Lander, a pediatrician in Livingston, N.J. "They say, 'The kid isn't that sick; her temperature is only 102.' "

How are we going to build long-term economic strength with sick kids?

Oh, yeah, we're not.

****

As a side not, I used to live in Walla Walla, Washington, a few years ago when I was going to college, and it was rumored there was only one place in town to buy sex toys: The Purple Parasol. Since it was a bridal shop, I had no reason to go in (I buy my sex toys online, thank you very much), but the owner made the Times article because of her medical bills.

She found out that her policy (individual because she's self-employed) wouldn't cover the last $100,000 of her husband's pacemaker after his congestive heart failure. The hospital covered half of that for her, meaning other patients would have to cover it, or the government would pick up the tab.

In other words, we're already paying for a health care system right now. So can we organize it, formalize it, redistribute it, and find more efficient ways of doing it than this?


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Thanks, Alex. But now that you're living in France, you really don't have to worry about the whole health care mess. This is why I want to move me ass to Holland. That and the drugs. And the prostitutes. Did I mention that I love the Dutch?

Robert Ganshorn Robert Ganshorn | May 6, 2008 7:46 AM

I have never understood that our government does not allow individuals or families to deduct the cost of health care premiums off of their incomes. As an employer with an S Corporation in Illinois I could deduct those costs and we had a small "group" plan where my company paid the full permium. I would add, just because you can deduct it from your taxeable income does not mean you do not have to go out and earn the money to pay the premiums.

But Alex, (wearing my employer's hat) employees tend to never consider health coverage as part of their income either. Younger, healthier employees would rather take the cash, and older employees, are often working to have health coverage.

True 2002, when I sold the business, was not yesterday, but I have to tell you that in "retirement" I enjoyed being part of someone else's health plan as an employee. It was heaven!

The economies of scale that could be achieved by insuring everyone are compelling. People who use doctors offices instead of emergency rooms will save a lot of money. I am for national health coverage for a variety of reasons.

1. Cost savings through economies of scale coupled with lower costs through preventive care.

2. Taking the backbreaking complexity of it away from American business will allow us to be more competitive in the world.

3. Most overlooked by Republicans, a sick contageous population, regardless of nationality, within the United States can be a greater risk to public safety than a terrorist attack.

4. It is the absolutely correct thing to do in a decent society that holds itself out to the world as an example of "freedom."

Sorry to have gone on so long Alex. Excellent Post! Five Stars!