This is a guest post that originally appeared in the Huffington Post by Pearl Korn from Oct 5, 2011. This is reprinted with her permission.
Last Tuesday the
Kaiser Family Foundation, a highly respected nonprofit health research organization, released its
annual health insurance survey
based on its research of some 2,100 small and large firms. Kaiser
reported a whopping 9% rise in premiums this year for family plans and
an 8% increase for single plans. These increases do not reflect
additional out-of-pocket costs workers pay for healthcare, such as
co-pays, deductibles and prescriptions. These plans cover some 150
million in the work force.
Closer scrutiny of these numbers is required to clearly see and
understand how the model of job-based insurance is becoming a serious
and eroding issue to Americans economically. Kaiser documents that in
the past decade, workers' wages rose 34%, while inflation increased 27%.
However, in 2011 earnings rose 2% while inflation rose 3%. Job-based
healthcare plans now cost a whopping $15,000 per year for a family, with
workers picking up $4,129 of that amount, meaning that workers' share
of healthcare costs has risen a stunning 131% in 10 years. The cost for a
single employee plan comes in at $5,429, with the workers' share rising
an even more shocking 159% during the decade. Add to this increasingly
unbearable burden the fact that 31% of covered workers are now in
high-deductible plans, which can range from $1,000 and up. One should
note that the bulk of the costs in these plans are paid by employers,
for which they receive tax breaks. This story made the
front page of the New York Times last Wednesday as the details of Kaiser's report were rolling out, and also hit
The News Hour on PBS as well as
McClatchy Newspapers. Even Nancy-Ann DeParle, Deputy Chief of Staff for Policy in the White House,
weighed in on this issue, particularly as it related to insurers profits.
Barclays Capital reported that 13 of the 14 top health insurers
beat their projected earnings in the last quarter, with profits coming
in at hefty 46% higher than expectations. Insurance CEO's must be living
large with their booming industry, one of the few growing sectors in
this stagnant economy. This 9% increase in premiums is the highest since
2005, and comes on top of a 3% rise in healthcare costs in 2010.
Speculation is plentiful. Will costs continue to rise, or drop as they
had in the preceding few years? Is the recession a factor? And has this
increase come in anticipation of more of the
Affordable Care Act
kicking in next year? After all, these increased rates were set last
year, so they would be more proactive than reactive to the current
situation. These increases in co-pays, premiums and deductibles makes
the current health care model an unattractive and faulty product that
encourages lack of use, with more of the costs increasingly shifted to
the workers, two factors that would play a significant role in increased
insurer profits.
Another discouraging ploy to limit healthcare use is the growing
trend toward tax-preferred health savings accounts, with money regularly
placed in accounts to be used for medical needs. This appeals to the
young, who believe they will never become ill or in need. The money
keeps growing, which in itself is an attraction to keep on saving and
not use healthcare services, delaying needed healthcare that can only
lead to deeper crises down the road, when serious, more complex illness
sets in and the system becomes overwhelmed. What then?
The health insurance costs for those in the individual and small
business markets are even worse. One insurer last year in California
sought
a 38% increase in premiums for individual policyholders, outraging the
nation. If we factor in the acknowledged 50 million with out health
insurance, and add in those 23 million unemployed and underemployed, we
have a serious problem. We have an unsustainable, fractured healthcare
system that, simply put, does not work for anyone except the insurers
and drug industry.
Of course, one would think that corporations would also get that
they should not be in the business of providing healthcare, at least if
that is not already their primary function. Are we not the only
industrialized nation that places such a tremendous responsibility and
burden on corporations? They should be unburdening themselves from the
responsibility and costs by becoming major advocates and players in the
growing movement pushing for an Improved and Expanded Medicare For All.
Now that would be lobbying most of us could support. Corporate America
would be off the hook and would only pay a reasonable tax -- along with
their employees -- to provide a true National Healthcare system. As the
current, patchwork, failed system continues down its current path, it is
clear there is really only one makes sense solution -- a single payer
system with an administrative cost currently of only around 3%. This
would save our nation $400 billion annually and could provide quality
healthcare to one and all at half the cost of the current system. Where
are the deficit hawks on this thinking?
Just look at the single payer model of the VA, which has provided
innovative, efficient and quality healthcare to our veterans, not to
mention negotiating prescription drug costs directly with pharmaceutical
companies. Another model would be Medicare, at least before the specter
of privatization crept in. The ACA leaves prescription drug negotiating
out, which also occurs in Medicare Part D plan, offering little more
than tremendous gifts to the drug companies. As health plans begin to
roll out and hit our mailboxes, there will be shocks aplenty. Some
information I received over the weekend from my insurer clearly shows
further slicing and dicing of benefits, with costs hiked significantly
across the board for all services and drugs, especially those nasty,
annoying co-pays. Meanwhile, insurance CEO'S are hopping, skipping and
jumping all the way to the bank, with their high multi-million dollar
annual salaries and perks. Take from the poor and middle class and give
to the rich -- Robin Hood must be rolling in his mythical grave.
Next year, to implement any rate increase above 10% for new
enrollees in plans, insurers will have to go public and justify those
rate increases to state regulators. This is law in the ACA, one of the
several good inclusions in the bill, and could affect those 30-odd
million that would be insured under the ACA who are currently uninsured.
But does that mean premium increases of 9.5% would go unchallenged?
Employers will make every effort to opt out of providing health
insurance to their workers, sending them off to join an ACA subsidized
plan if they qualify. The costs of workers' healthcare now -- on a state
and corporate level -- has produced fierce battles in many states to
downsize workers benefits in union contracts. Collective bargaining was
the big summer issue across the country, and will continue to be for
the foreseeable future as states under GOP control continue to decimate
workers' rights, especially targeting health benefits.
In the coming months, we can also look to the Supreme Court to rule
on the constitutionality of ACA. Last week, the president and 26
states contacted the high court to move forward on this issue. Surely,
the question of the government mandating the public to buy a commercial
product will be hotly debated. All of this will play out just before the
election, giving the GOP a powerful weapon to distract the public and
aim at the president, which may ultimately sink his chances of being
re-elected, especially if the moribund economy and jobless rate continue
unabated in 2012.
-- With Jonathan Stone
