Thursday, August 27, 2009

Have Insurance? You Need Health Care Reform

Opponents of health care reform have certainly had their voices heard over the past few weeks. It appears the main arguments against reform are “socialism is bad” and “Obama is Hitler.” My proposed response is to engage in a rational discussion about public policy.

Much of the debate so far has been focused on the uninsured, the public plan, and death panels. What we really need to be talking about is how people who already have insurance are being taken to the cleaners by our dysfunctional health care system.

Just this month, the Commonwealth Fund released a study documenting what most of us already know to be true: “Middle-income individuals and families have been losing ground as the cost of health insurance continues to rise at a faster rate than incomes.” Among the Commonwealth Fund’s findings:

- “Between 1999 and 2008, employer-sponsored family health insurance premiums rose by 119 percent nationally, while median family income rose by 29 percent.”

- “Studies indicate that slower growth in wages and lower savings for retirement (worker and employer contributions) have been part of the trade-off to preserve health benefits.”

- “Despite such trade-offs, the monthly cost of premiums paid by workers and their families is up—consuming an ever-greater share of any wage increases they might receive.”

- “Absent significant reforms, current projections estimate that national per-person spending on health insurance premiums will increase by 94 percent from 2009 to 2020, increasing an average of 5.7 percent annually.”

The trends are true for Washington State as well. A series of reports released by Health Care For America Now demonstrate in each state how health care costs are growing much faster than wages. Among the findings:

- “Health insurance premiums for Washington working families have skyrocketed, increasing 87 percent from 2000 to 2007.”

- “For family health coverage in Washington during that time, the average annual combined premium for employers and employees rose from $6,496 to $12,120.”

- “The combined cost to employers and workers of health insurance for a Washington family of four is equal to 21 percent of the state’s median family income. Given current trends, that share will grow to 42 percent in 2016.”

- “The cost of employer-sponsored health insurance in Washington is growing at an annual rate of 8.6 percent, compared to a 1 percent growth rate for income.”

In fact, people who receive health insurance through their employer have a greater stake in reform than just about anyone else. As columnist Froma Harrop wrote, “Your company health plan does not come free… Employer-provided health coverage cut cash wages by nearly 8 percent last year, according to the Bureau of Labor Statistics.”

The 2009 Milliman Medical Index, an annual industry survey, had similar findings. According to reporter R.H. Sheldon, the latest MMI study found that “A family of four covered by employer-sponsored health insurance now incurs $16,771 per year in medical expenses, which represents a 7.4% increase over 2008 costs… Add to this the trend toward greater cost sharing on the part of the employee, and families are paying more out-of-pocket medical expenses than ever... [2009] is the third consecutive year in which there has been a double-digit percentage increase in the amount that employees and their families are spending for health care services.”

Researcher David Grande wrote, “Most working Americans underestimate how much they are already paying for health insurance, since most get it through their employers… Their employers' share is really paid through lower wages… Health-care costs are rising at more than three times the rate that middle-class wages are. Any pay increase workers might receive is chewed up by rising health care costs, and many workers have less money available for things other than health care with each passing year.”

The bottom line is the standard of living for every state worker, as well as everyone else, will continue to erode until Congress finds the courage to enact meaningful reform. Boy, I sure hope Congress comes through. I'm tired of getting ripped off. -- Dennis

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