Commentary By Ron Beasley
You hear the chant a teabagger events and town hall meetings - "keep the government out of my health care." Of course many of those people are on Medicare but according to this report from the Kaiser Family Foundation the rest may change their minds in next ten years.
The first number was the average cost of a family health insurance
policy in 2009: $13,375. To put that number in context, if you are an
employer, you can hire an employee at the minimum wage for about
$15,000 per year. If you are a consumer, you can rent an average
two-bedroom apartment nationwide for $11,136 per year (though it is
quite a bit more here in Menlo Park, California where our Foundation is
based). You can also buy a new Chevy Aveo for $12,000, and it gets 35
miles per gallon on the highway.The other result that jumped off the page was the stark contrast
between increases in health insurance premiums and overall inflation in
the general economy. Premiums went up 5% and prices overall fell 0.7%
(mainly driven by a big drop-off in energy prices).
The 5%
increase we found in premiums is moderate by long-term historical
standards. For example, two different times during the last decade
premiums increased by 13% a year, in 2002 and 2003. This year's
increase continues a multi-year period of relative moderation in
premium increases. Still, over the last ten years premiums have
increased by 131%, while wages have grown 38% and inflation has grown
28%. Consider this: If people (and businesses) are as concerned as they
are now about rising health care costs in a period when they are
actually moderating, how much more concerned will they be when rates of
increase return to historic averages?
Let's do some very
simple arithmetic. Start with a fairly conservative assumption: If we
assume that premium increases over the next ten years will average what
they did over the last five (about 6.1% per year), the average premium
for a family policy in 2019 will be $24,180. That's a big number. On
the other hand, if we assume increases revert to the average of the
last ten years�an average annual increase of about 8.7% and a very
plausible scenario�premiums in 2019 will average a whopping $30,803, a
very scary number (Figure 1).
The message we see in these numbers is simple - sometime within the next ten years private health insurance will become so expensive that neither employers or individuals will be able to afford it and it will become a thing of the past. A few years ago my employer at the time was forced to make employees to share the cost of family coverage. Many of the those employees made less than $15.00 an hour and could not afford the $100 a month so they dropped their coverage. This will become the rule rather than the exception in the years to come. Many employers will be forced to drop insurance altogether.
The bottom line is that for profit health insurance will cease to exist in the next 10 years and Medicare for all may look pretty good to those protesting today.
It's time to introduce single payer - Medicare for all - legislation and force the Republicans and blue dogs vote against it.
"premiums in 2019 will average a whopping $30,803"
ReplyDeleteI love these mathmatical projections that fail to take into account things like, oh, maybe reality. Things like a worker making $24,873 per year being unable to pay $30,803 per year. Premiums increased 5% last year, and 5% the year before, therefore they will increase 5% every year in the future regardless of what anyone can pay or is willing to pay, and regardless of what hospitals and doctors charge.
The increase of premiums is, of course, entirely due to the evil insurance companies, and has nothing to do with the fees charged by cosmetic surgeons, or with hospitals charging $350 to provide a warmed blanket for a surgical patient. Insurance companies are supposed to pay those fees without raising the premiums at all.
But isn't that the point of a simple projection to show what the world might look like without something changing. Me I prefer simple stuff like accounting models and straight forward projections. The ones that confuse me are the ones with behavioural factors stuck in them. Looking at the graph you can say for certain somethings going to change if the track pictured is to be true. Now outside the issue of US health premiums, even in countries with universal health care - i.e. care for all people living within their borders - the raising cost of providing care is a concern for gov't.. Most OECD countries, the USA excluded as you seem to be a special case, none have sorted out exactly how to deal with this issue. For the time being, as other things seem to be just now more crucial for our beloved dysfunctional leaders, the matter of health care costs rising much more rapidly than general inflation and the growth in GDP (is it growing yet) is a real concern and politics and posturing be damned.
ReplyDelete"...force the Republicans and blue dogs vote against it."
ReplyDeleteIt's way past time to force the Republicans to vote against popular legislation. Trouble is, that would mean Reid would have to put his pet blue dogs in the same position.
Poor Harry can't embarass them, he's pretty much one of them. He doesn't believe in anything progressive, even if it helps his voters. That's why he's polling very poorly against a generic Republican opponent.