Originally, this topic had little resonance with me because I have been well-covered by commercial insurance companies for many, many years. I even recently became a large utilizer (i.e. had an expensive surgery) and the insurer, Blue Cross Blue Shield of Illinois, could not have treated me any better.I know that past performance is no predictor of future value, as they say, but BCBS really did the job.
I support a progressive agenda and appreciate the even temperament and intelligence of President Obama. So I’ve looked into healthcare a little deeper and have come to appreciate this cause a little more.
I see H.R. 3200 as having 4 components. The first is changing the rules for commercial insurers so that they can no longer cherry-pick their customers. The second is strengthening Medicare through adjustment of the rules and broadening coverage of the preventive aspects of care, with the intention of reducing emergent disease and reducing expenses with Part D and Medicare Advantage plans. The third is the mandate that will both get more Americans in to see a doctor and greatly reduce the uncompensated care in hospitals. The fourth is the healthcare exchange concept where a government run plan will be one of the choices for a basic insurance option. Without this aspect, we will simply be delivering 30-40 million new customers to commercial insurers without any incentive to contain costs.
What if we approached this more incrementally? I think the urgency is driven by the trajectory of the costs. Health insurance costs have risen 5% in the past year, while general inflation is -1.5%. According to research published by the Kaiser Family Foundation and the American Hospital Association, family insurance premiums for employer-provided insurance now cost $13,375 annually, with workers paying an average share of $3,515 and employers paying $9,860.
According to the study, premiums have jumped 131% during the past decade. That is 3 times the rise in workers’ wages and 4 times general inflation. 42% of companies plan to raise the premium to employees, 36% plan to increase the deductible amounts, 39% plan to increase the office visit copays, and 37% plan to increase prescription costs.
Only 2% of firms are very likely to drop coverage completely, and 6% are somewhat likely to drop coverage. Projecting that 2% figure out over 10 years, around 17% (1 in 6), of those with company-sponsored health insurance today will be losing their insurance and either purchasing their own plan or losing coverage completely.
That’s why a plan that looks like Medicare for all, or a mechanism to use competition and risk-spreading to move costs downward, is so important for Americans. Health insurance status quo is a poor option.