Where is the US economy headed?

The White House link?
Isnt that the same WH that said they would cut taxes for 95% of workers?
And even you admit that isnt possible.

I dont know enough about the Obama medical plan to judge it or to have any serious comments about it, so I am reserving judgement till the actual plan is made public.

But I do have a question.
If its a combination, as you claim, wont that eventually drive the private plans out of business?
After all, no private plan can compete when the govt starts subsidizing and driving down costs.

It's not just a matter of saying yes to what they agree with; they must also provide real solutions to problems that exist in health care. All they are capable of is saying no, then complain they didn't have the opportunity to provide input. Obama has asked often for their input.

But for the last 2 years of the Bush admin, when the dems were in control of congress, they also said "no" to everything Bush wanted.

So didnt that make them "obstructionists" also?

They won't be able to compete on price, but maybe they can on service, speed, or quality.

This is of course assuming that the government doesn't demand that ALL doctors be forced to accept the public option, which I would oppose the government doing.

The National Coalition
on Health Care
1120 G Street, NW,
Suite 810
Washington, DC 20005

202.638.7151

www.nchc.org
[email protected]



Health Insurance Costs

Introduction

By several measures, health care spending continues to rise at a rapid rate and forcing businesses and families to cut back on operations and household expenses respectively.

In 2008, total national health expenditures were expected to rise 6.9 percent -- two times the rate of inflation.1 Total spending was $2.4 TRILLION in 2007, or $7900 per person1. Total health care spending represented 17 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP.1

In 2008, employer health insurance premiums increased by 5.0 percent " two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,700. The annual premium for single coverage averaged over $4,700.2

Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

National Health Care Spending

* In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012.1 Health care spending is projected to reach $4.3 trillion by 2016.1
* Health care spending is 4.3 times the amount spent on national defense.3
* In 2008, the United States will spend 17 percent of its gross domestic product (GDP) on health care. It is projected that the percentage will reach 20 percent by 2017.1
* Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens.3
* Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.4


Employer and Employee Health Insurance Costs

* Premiums for employer-based health insurance rose by 5.0 percent in 2008. In 2007, small employers saw their premiums, on average, increase 5.5 percent. Firms with less than 24 workers, experienced an increase of 6.8 percent.2
* The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,700 in 2008. Workers contributed nearly $3,400, or 12 percent more than they did in 2007.2 The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712).
* Workers are now paying $1,600 more in premiums annually for family coverage than they did in 1999.2
* Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period.2
* Health insurance expenses are the fastest growing cost component for employers. Unless something changes dramatically, health insurance costs will overtake profits by the end of 2008.5
* According to the Kaiser Family Foundation and the Health Research and Educational Trust, premiums for employer-sponsored health insurance in the United States have been rising four times faster on average than workers’ earnings since 1999.2
* The average employee contribution to company-provided health insurance has increased more than 120 percent since 2000. Average out-of-pocket costs for deductibles, co-payments for medications, and co-insurance for physician and hospital visits rose 115 percent during the same period.6
* The percentage of Americans under age 65 whose family-level, out-of-pocket spending for health care, including health insurance, that exceeds $2,000 a year, rose from 37.3 percent in 1996 to 43.1 percent in 2003 " a 16 percent increase.7


The Impact of Rising Health Care Costs

* National surveys show that the primary reason people are uninsured is the high cost of health insurance coverage.2
* Economists have found that rising health care costs correlate to drops in health insurance coverage.8
* A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.9 Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.
* A new survey shows that more than 25 percent said that housing problems resulted from medical debt, including the inability to make rent or mortgage payments and the development of bad credit ratings.10
* About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs. 11
* A survey of Iowa consumers found that in order to cope with rising health insurance costs, 86 percent said they had cut back on how much they could save, and 44 percent said that they have cut back on food and heating expenses.12
* Retiring elderly couples will need $250,000 in savings just to pay for the most basic medical coverage.13 Many experts believe that this figure is conservative and that $300,000 may be a more realistic number.
* According to a recent report, the United States has $480 billion in excess spending each year in comparison to Western European nations that have universal health insurance coverage. The costs are mainly associated with excess administrative costs and poorer quality of care.14
* The United States spends six times more per capita on the administration of the health care system than its peer Western European nations.14


Time for Action on Reining in Health Care Costs

Policymakers and government officials agree that health care costs must be controlled. But they disagree on the best ways to address rapidly escalating health spending and health insurance premiums. Some favor price controls and imposing strict budgets on health care spending. Others believe free market competition is the best way to solve the problems. Public health advocates believe that if all Americans adopted healthy lifestyles, health care costs would decrease as people required less medical care.

There appears to be no agreement on a single solution to health care’s high price tag. Many approaches may be used to control costs. What we do know is if the rate of escalation in health care spending and health insurance premiums continues at current trends, the cost of inaction will severely affect employer’s bottom lines and consumer’s pocketbooks.

Notes

1. Keehan, S. et al. “Health Spending Projections Through 2017, Health Affairs Web Exclusive W146: 21 February 2008.
2. The Henry J. Kaiser Family Foundation. Employee Health Benefits: 2008 Annual Survey. September 2008.
3. California Health Care Foundation. Health Care Costs 101 -- 2005. 02 March 2005.
4. Pear, R., “U.S. Health Care Spending Reaches All-Time High: 15% of GDP.” The New York Times, 9 January 2004, 3.
5. McKinsey and Company. The McKinsey Quarterly Chart Focus Newsletter, “Will Health Benefit Costs Eclipse Profits,” September, 2004.
6. The Henry J. Kaiser Family Foundation. Employee Health Benefits: 2008 Annual Survey. September 2008.
7. Agency for Heathcare Research and Quality. Out-of-Pocket Expenditures on Health Care and Insurance Premiums Among the Non-elderly Population, 2003, March 2006.
8. The Henry J. Kaiser Family Foundation. The Uninsured: A Primer, Key Facts About Americans without Health Insurance. 2004. 10 November 2004 http://www.kff.org/uninsured/
9. Himmelstein, D, E. Warren, D. Thorne, and S. Woolhander, “Illness and Injury as Contributors to Bankruptcy, “ Health Affairs Web Exclusive W5-63, 02 February , 2005.
10. The Access Project. Home Sick: How Medical Debt Undermines Housing Security. Boston, MA, November 2005.
11. Robertson, C.T., et al. “Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures,” Health Matrix, 2008
12. Selzer and Company Inc. Department of Public Health 2005 Survey of Iowa Consumers, September 2005.
13. Fidelity Investments, Press Release, 06 March 2006.
14. McKinsey Global Institute. Accounting for the Cost in the United States. January 2007

© 2009 National Coalition on Health Care. All rights reserved

And because they cant compete on price, eventually they will go out of business, no matter what else they can compete on.

I fail to see how it helps anyone when the govt can force companies out of business.

I don't believe that is true; if the private insurers really provide a higher quality product than the gov't, they will stay in business.

And if they can't provide a higher quality product, and the gov't plan is cheaper, than what is the point of keeping them around?

Cycloptichorn

Exactly. Freedom is about choices. If people would rather buy lottery tickets, or cigarettes, or pay a pricy car payment for that shiny new car, instead of a very affordable medical insurance, then that is their choice. For people under the poverty line, medicaid is available, that is government health care, we already have it, and if the threshold is not appropriate, adjust it. The fact is that most Americans are satisfied with their health care already, but don't bust the bank to institute a worse system.

How many uninsured are smokers. At two packs a day, thats over 2 or 3 hundred a month, which would probably buy insurance for a young person.

Why would that be the case?

If being able to bypass many of the waiting lists that people have been complaining about in Canada for example is one of the major benefits of a private insurance plan, AND it's as important to Americans as many people here say it is, then people will buy the private plan.

If the best doctors in the country decide that they will only accept private health insurance (probably because the private carriers will pay them a premium) then if people want the best doctors/surgeons, they'll sign up for private healthcare.

Won't they?

And if not, then I guess things like queues for medical services, surgery, etc really aren't a problem for Americans, right?

If I were a health insurer, I would find the best doctors, and offer them premiums to only accept private insurance, as opposed to the public plan or other insurers.

And if you were an auto manufacturer, would you pay your dealers to carry your brand only and thus forego all the lucrative sales from those dealers who take on other makes? But then if you were a dealer, would you agree to restrict yourself to a specific product if you could make much more by offering your customers a choice?

If you were Kellogg or General Mills or Coke, would you pay a premium to grocery stores to carry your brand only and forego all the lucrative sales to grocers who offer a wide variety? If you were a grocer would you give up all the sales you could make to those who wanted different products?

How would you enforce it? Audit their books to see what they are selling? If you were in business, would you open your books to a supplier?

Insurance is a product just like any other product and, in a free market, insurance companies compete for business just like any other private company. The role of the government should be ONLY in the area of anti-trust to prevent insurance companies from bypassing the free market and manipulating the market, but otherwise if you let the free market work, you will generally arrive at the price most people are able and willing to pay. Once the Federal government involves itself in providing the product, however, the whole system becomes skewed and more expensive. It happens every single time.

Let the states do whatever they want re health insurance. If it can be done by government at all, it is far more likely to be successful at that level. Keep the Federal government out of it other than in necessary regulatory capacities.

Or, the companies will collude to charge the highest prices that people can AFFORD to pay, no matter what their 'willingness' is. Health care just isn't like other purchases, which are optional.

And this is exactly the situation we see today: costs have spiraled out of control because of the current system. So, to warn of cost increases under a new system is not persuasive; there is no evidence that costs will not continue to increase anyway.

Cycloptichorn

You didn't read the post did you? I gave consideration to that.

But health care IS just like other purchases and it is optional to free people. It is as optional as it food, water, clothing, shelter, transportation, heat, light etc. that most people consider necessities of life. And it should be treated in exactly the same way.

I can only get a Coke at McDonalds.
I can only get a new Jeep at a new Jeep dealership.
I can only use my AMEX card at Costco.
I can only use cash at my dry cleaner.

How does Coke make sure that McDonalds doesn't buy and use Pepsi?

No, it's not optional, and it's not like those other things, either.

You may say that the government's role should be to prevent collusion, but the fact is that they do not actually do that; and to do it effectively would mean a complete re-organization of the system. And there's no good argument for not having a public option involved in that system.

I will point to you the example of Australia, who has a public option, private insurance as well, no or little waiting, universal coverage, and no bankruptcy. There are real-world examples of public and private options working together. So why not? You have provided no real evidence that it will raise costs whatsoever; only asserted that it would.

Cycloptichorn

The government, if it does its job, can enforce anti-trust laws quite handily. If it cannot, then why in the world would you entrust it with something of far greater significance and far more difficult to do?

Australia's population is smaller than the State of Texas. You simply cannot compare the USA and its widely diverse population and culture with a much MUCH smaller country with a much more homogenous population and culture.

This is why any government organized or structured healthcare plans should be left to the states and the Federal government should stay out of it other than for its Constitutionally mandated responsibilities which would include enforcement of antitrust laws.

Here is the problem.

1) The government FORCES employers to offer healthcare plans.
2) The goverment then goes into competition with private insurance and undercuts them.
3) Employers would be nuts to go with private insurance if they can get govenrment insurance cheaper.
4) Private insurers have to lower their prices to compete with government, but they can't tax people to make up the difference. So they go broke and out of business.
5) And soon there is little or no private insurance for anybody other than they very rich and no choices available for us and we will pay whatever it costs for government insurance which, historically, will almost certainly be double or triple what the government now says it will cost. And we will have to accept whatever the government wants to give us and pay whatever taxes it wants to tax us whether that is satisfactory or not.

Yes you can. I haven't seen any evidence presented which shows that the solutions which work for them, won't work for us; only assertions that they wouldn't.



Nope. We've tried that and it leads to an unworkable and expensive mess. Time to try something different.

Cycloptichorn

If the state plan is an unworkable and expensive mess, why do you think the Federal government is somehow more capable and smarter and more efficient than state government?