The
purpose of health insurance, initially, was not to pay for health care, but to
replace lost income due to illness—more like disability insurance. Until the late 1920's, there wasn't much
demand for today’s kind of health insurance, because the middle class could
still afford to pay health care costs out of pocket, according to Melissa
Thomason in the EH.net Encyclopedia of
Economic and Business History. [Thomasson,
1900-1920]
Back
then, doctors treated most people in their homes, even did surgery there. Annual costs for medical care averaged $12.33
per person in 1921, and lost wages due to sickness cost workers another $12 a
year, according to Sara Beazley in her HHN
Magazine article, “Eight Decades of Health Care: The 1920’s.” [Beazley]
Gene Smiley reported in “The U.S. Economy in the 1920s,” also in the EH.net Encyclopedia, that unskilled
males in manufacturing were earning an average yearly wage of $1,240. [Smiley]
$12.33
a year for medical care is less than 1% of an individual factory worker’s $1,240
annual wage. If he supported a family of
4, that $12.33 per person still added up to barely 4% of his yearly income. That may have been the last time we had
affordable health care in this country.
As
medical science improved, and treatment shifted more and more from the home to
the hospital, health care costs began to rise beyond what the middle class
could afford. Health insurance emerged to fill the gap.
BEGINNINGS
The
web site of Blue Cross Blue Shield summarizes the first version of today's
health insurance:
Born out of necessity in the Great Depression, the Blue Cross concept was
created in 1929 by a pioneering businessman, Justin Ford Kimball. He offered a way for 1,300 school teachers in
Dallas to finance 21 days of hospital care by making small monthly payments to
the Baylor University Hospital [BCBS Beginnings].
This was shared risk insurance: not all the teachers would need 21 days in the
hospital each year, which none of them could afford, but since they couldn't
know in advance who would need the hospital care, they pooled their resources
and shared the risk. The idea spread to other employee groups.
Prepaid hospital care helped consumers, gave hospitals a steady source of
income during the Depression, and raised the percentage of occupied beds.
However, like physicians, the hospitals abhorred competition:
Since single-hospital plans generated greater competition among hospitals,
community hospitals began to organize with each other to offer hospital
coverage and to reduce inter-hospital competition. These plans eventually combined under the auspices
of the AHA (American Hospital Association) under the name Blue Cross
[Thomasson, 1930-1940].
The AHA and Blue Cross became powerful political lobbyists, according to
Thomasson. They won privileged conditions
through state-level legislation,
…allowing them to act as non-profit
corporations, to enjoy tax-exempt status, and to be free from the usual
business regulations. [Thomasson, 1930-1940]
Like
Blue Cross, Blue Shield also started in the 1920's as an employment benefit,
this time providing doctors' care:
…the Blue Shield concept was growing out
of the lumber and mining camps of the Pacific Northwest. Serious injuries and chronic illness were
common among workers in these hazardous jobs. Employers who wanted to provide medical care
for their workers made arrangements with physicians who were paid a monthly fee
for their services. [BCBS Beginnings]
Occasionally, employers also established community hospitals to help those
physicians serve workers and their families, which was the case in the hazardous-industry
town where I grew up. Our doctor was
also expected to, and did, help the company deny workers’ compensation claims.
Seeking to avoid competition from, and control by, hospital prepaid plans,
doctors banded together to offer prepaid physician care, and Blue Shield was
born in 1946. Again, lobbying and legislation exempted them from laws
governing insurance and gave them non-profit, tax-free status.
GROWTH
During World War II,
wages were frozen. To attract and hire more workers, employers
offered health care plans since they couldn't offer higher
wages, and plan sales increased. Thus the almost-unique U.S.
pattern of employer-provided health insurance became firmly
established. It grew rapidly after WW II, as unions bargained
for both higher wages and more benefits.
The
spread of health insurance coverage—from less than 10 percent of
the population having coverage in 1940—grows
to nearly 70 percent in 1955 [BCBS History].
Employees are a
younger, healthier group to insure than the general population.
With this reduced risk, commercial insurance companies entered the
market, according to Thomasson. Because they were not tax-exempt, they could use
experience rating and charge sick people higher premiums than healthy
people, or simply refuse to insure them.
But as part of their
tax-exempt deal, Thomasson explains, Blue Cross and Blue Shield (BCBS, or "the Blue's") had to use community
rating and insure everyone equally. This difference gave the
commercial insurance companies a competitive advantage, and they won
business away from the Blue's.
People don't worry
about costs they don't have to pay for out of pocket when the
insurance company pays instead. Shielded by the concealing
buffer of insurance, health care providers kept increasing their
prices.
Health insurance used
to be only for major medical expenses, not for routine and preventive
care. But as prices kept increasing, routine care also got too
expensive for the middle class, and pressure grew during the 1970’s
to insure preventive health care as well as
major medical expenses. It seemed logical for
insurance to pay less to prevent a serious illness, than to wait for
illness to strike and then pay a lot more.
Enter the HMO's
(Health Maintenance Organizations), whose health care plans included
and encouraged preventive care. In order to compete, both Blue Cross
Blue Shield and the commercial companies had to add preventive care
coverage.
Insurance premiums and underlying prices both
continued to increase.
PHARMACEUTICALS
A similar pattern occurred with prescription medications. As they became too expensive, pressure grew
to insure them as well, and when the health insurance industry entered the
picture, prices increased more.
Pharmaceutical companies charge us significantly higher prices at
home for the same medications that they sell abroad for less. Their
lobbying is the reason Congress has prohibited our own government from
negotiating for lower medication prices for Medicare and Medicaid, and
prevented both our government and the public from importing cheaper medications
from other developed nations with standards as high as our own.
They’ve done it because Congress has allowed it. Why this lobbying has
succeeded is another story, but the results are chronic and grotesquely
out-of-control price increases for prescription medication.
The pharmaceutical companies are following patterns long established by the
medical profession. As prescription
drugs moved under the umbrella of the health insurance industry, medication
prices also became, like doctors’ prices, secret and discriminatory. They soon rose to match the inflationary rate
of the providers' prices. Not
surprisingly, health insurance premiums continue to rise even more.
The pharmaceutical industry says they are
entitled to profit margins as high as 80%, because they have such high costs
for research and development. They're using conflation—combining two
readings into a single text—to conceal the truth. The untangled version is that the
pharmaceutical industry's high profits are free and clear after they have
already paid for the standard and deductible business expense of research and
development.
There are three steps we can take to correct exorbitant
prescription drug pricing:
First, get FDA-approved and
strictly monitored reciprocity agreements with foreign pharmaceutical companies,
so we can purchase safe medications from outside the US.
Access to international competition will bring American drug prices
down.
Second, prohibit secret and
discriminatory medication prices, and require open and uniform pricing instead,
so that within each pharmaceutical company, everyone pays the same publicly
known price for each of its drugs.
Third, we can correct an
anti-competitive, monopoly-making feature of our patent system. Having a
patent today means two things: one is ownership of newly created
property, which is essential for protecting and rewarding ingenuity.
The other
gives the patent owner an exclusive right to produce, price, and sell the new
product for all the years the patent is in effect. With that production
monopoly, pharmaceutical companies can charge high prices because they face no
competitive forces that would bring those prices down. This is why they have
so vehemently opposed generic drugs. It took legislation to make them
accept competition from generics after
their patents have expired.
We can require medical patent owners to grant production licenses to all
FDA-approved producers in return for a standard royalty on sales—and prohibit
all such licenses from setting any minimum sales price. This will inject competition into the
pharmaceutical industry and bring their prices down.
The monopoly-making feature of our patent system allows and
protects those exorbitant drug company prices and profit margins. We
learned the hard way, from the Robber Barons of the 1800’s through the
anti-trust suit that broke up AT&T’s monopoly on telecommunications in
1982, that monopolies are dangerous to both consumers and the economy, so
dangerous that the government has had to step in more than once.
One prescription drug, PremPro, will illustrate the monopoly problem with
pharmaceuticals. Hormone replacement therapy has been around since
the 1960's, but PremPro is still available only at high-cost, brand-name,
top-tier prices.
Why? Because every time Wyeth tinkers with the formula, it gets a new
patent, and each new patent Wyeth gets continues to prohibit competitors from
producing cheaper generic versions of PremPro.
The current formulation of PremPro was approved in November 1995, as a
modified version of an earlier product.
[FDA] This pattern is common throughout the
pharmaceutical industry.
What can we do to protect ourselves from these costly abuses of our patent
system? How can we get pricing competition
into the medications market?
We can end the pharmaceutical companies' production and pricing monopoly, while
protecting their patent ownership, through mandatory licensing with standard
royalties.
Incidentally, we can also require that the medical patent holders pay royalties
from the sales of successful new medical products into public health care funds
in proportion to the government grants we taxpayers gave toward their research
and development.
Health care providers’ prices have risen dramatically since 1960,
but similar dramatic increases in the prices charged for prescription drugs did
not occur until after 1980. Once the
health insurance industry got involved, medication prices rose so fast that
they caught up with the inflation rate of physician and hospital prices.
The health insurance industry has become a huge, lucrative middleman, obtaining
revenue not only from insured patients, but also from physicians, employers,
pharmaceutical companies, and the government. This situation developed
over nearly a century, almost too slowly for us to notice, in increments that
seemed logical at each stage.
But we now see that the end result is hurting us badly, with denials of benefit
claims and unchecked price increases, until millions of uninsured people had no
access to health care except in emergency rooms. And it is crippling
the job market for the American middle class.
Jobs: Data from the U.S. Department
of Health and Human Services shows that health care costs have grown over the
past 50 years from 5% to 16.2% of the Gross National Product [HHS/CMS].
This growing imbalance in the national economy endangers us all. Our
health care crisis is not just a health care crisis any more.
The high cost of health insurance is diverting our earnings from our paychecks
to the health insurance companies, sending full-time jobs overseas, and eliminating
them at home. It has become a powerful driving force for employers to
create separate and unequal jobs at home through underemployment.
The damage caused by exorbitant and chronically increasing health insurance
premiums is creeping through our economy like gangrene, crippling middle-class
earnings and constricting consumer spending. It reaches far beyond our
health care system.
The Bureau of Labor Statistics (BLS) reports that our average weekly earnings,
measured in constant 1982 dollars, have actually declined by 17% since the
early 1970's, from $334.01 in January 1973 to $276.69 in January 2006. [BLS/CES]
But our employers' labor costs were
going up. Where did the money go?
While our real-dollar wages have declined, the costs for employee health
insurance have been increasing, especially between 1988 and 1993 and even more
noticeably in recent years. According to the Kaiser Family
Foundation,
[Employer] health insurance premiums have increased rapidly over
the recent past, growing a cumulative 78 percent between 2001 and 2007 and far
outpacing cumulative wage growth.... [Kaiser].
Labor
cost increases have been going to the health insurance companies instead of
into employee paychecks.
Personal experience opened my eyes to the falling-dominoes impact of tying
health insurance to jobs. Along with many others, I was laid off from a
full-time job in Massachusetts
in 2003.
Since then I've watched many friends—highly qualified professionals—scramble
for sub-contract opportunities. Others, myself included, piece together
two or more part-time jobs.
From my stunned, “What just happened?” state of mind after 2003, I began to
wonder how we got here, and started looking for answers.
According
to Virginia Colliver in the San Francisco
Chronicle, over half of us get our health insurance through our jobs [Colliver];
the Bureau of Labor Statistics Consumer Population survey reported that “62.2
percent of the nonelderly U.S.
population had employment-based health benefits in 2006.” [Beckmann]
The percentage of health insurance premiums paid by employers varies
considerably over time by firm size, how many options are offered, types of
plans, including whether single or family policies, employee wage levels and the
rates of employee enrollment (lower-wage workers have to contribute more and
tend to participate less).
But generally speaking, our employers have been paying roughly 70% [Kaiser, BLS,
Beckmann, Towers Perrin] of employee health insurance premiums to cover half
the population [Colliver], which suggests that the American business community
has been carrying 35% of the nation's health care costs on their backs in
addition to their own business expenses.
It's an incredible burden for American industry. Unlike most of the rest
of the world, we've tied health insurance to employment for nearly 70
years. Since the 1990’s, U.S. jobs have been going overseas for good
reason—having to bear the cost of health insurance puts American businesses at
a significant disadvantage in the global marketplace.
It’s easy to understand how the ever-increasing cost of employee health
insurance drives employers to find ways to get rid of it or go broke.
Non-profits in Massachusetts, particularly higher education, discovered many
years ago how to avoid that expense altogether. They make more and more
jobs part-time, since Massachusetts law exempts employers from having to
provide benefits to most part-time employees.
This sometimes leads our employers into absurd positions. Massachusetts
community colleges hire the same individual in two different part-time
positions whose total weekly hours would make them eligible for full-time
status. However, they pay such individuals as though they were two
separate people holding two different jobs in order to retain their
classification as "part-time" and thereby avoid providing
benefits. I have the pay stubs to prove it.
Employers in the private sector have increasingly been copying this
“underemployment” strategy. According to the Bureau of Labor Statistics
(BLS) Current Population Survey (CPS), job losses nationwide more than doubled
between April 2001 and May 2003—from 2,298,000 to 5,101,000 [BLS/CPS].
Corporations laid off a great many full-time employees with standard health
insurance benefits, creating a large pool of highly qualified people looking
for work.
Then they turned around and drew on this pool to under-employ them as
part-time, sub-contract, or long-term "temporary" staff with no
benefits. Not just no health insurance, but no paid holidays, no
paid vacations or sick days, no maternity or family leave, even, for some, no
Social Security withholding with employer matching. Much cheaper for
employers this way, but very tough on the middle class.
We have allowed the creation of a new lower class in America—the underemployed—but the
BLS has not identified and does not directly track the full scope of our
underemployment. It does track the number of people who work part-time
involuntarily for “economic reasons” (meaning the employer's economic
necessity), and that number increased by 50%, from 3,201,000 in April 2001 to
4,592,000 in April 2003.
By 2009, the reports of annual average hours of work showed that part-timers
were fully 28% of the employed population [BLS/CPS*]. According to CBS 60 Minutes on October 24, 2010, the
nation's unemployment rate (9.6%) would be 17% if we counted those who settled
for part-time jobs or gave up looking for work; California's would be 22%.
Incidentally, it appears that many of the underemployed are women, a pattern
which may be contributing to the continued inequality of women's incomes
compared to men's. Since 2001, more women have held multiple jobs than
any other group in the labor force [BLS/Dem], another indicator of people
without benefits struggling to make ends meet.
The highly successful Massachusetts
health reform law of 2006 mandates employer-provided health insurance—except
for most part-time staff [mass.gov]. That’s a powerful incentive to
replace full-time positions with part-time jobs, but it isn’t new. It’s
just spread from the non-profits through the private sector to government
policy.
Many
part-timers have incomes that are limited by employer ceilings on the number of
hours we can work, in order to maintain our part-time status. And although
the Massachusetts
health reform law lets those employers off the hook, it still requires us to
purchase health insurance on our own.
Of course the underemployed can't afford very much in premiums or
coverage. If we get seriously sick, we know massive medical debt, even
bankruptcy, will follow. On the other hand, if our incomes are kept low
enough, the taxpayers are stuck with our health care costs. Yet we're
still taxpayers ourselves.
Those who still have full-time jobs get low group rates and large employer
contributions for their health insurance premiums; they also have job security
when they need maternity, parental, or dependent care leave. Most of the
underemployed have no access to group health insurance, and no job security
when family needs arise; instead, they are often treated as disposable adjunct
staff.
With the more recent 2008-2009 rise in unemployment, there's a new twist on
employers avoiding benefit costs—using use a bait-and-switch hiring
strategy. One employer advertised and interviewed a well-qualified job
applicant for a full-time position with benefits, then offered this successful
candidate only a part-time position with no benefits and a lower pay rate—less
than he was getting on unemployment.
Isn't bait-and-switch illegal in consumer advertising? Do we need our
legislators to prohibit it as an employment strategy as well?
Better yet, mandate full parity in benefits and pay for part-time employees—and
pass laws to separate health insurance from jobs so our employers can afford to
let us work.
Inflation:Health
insurance got its start, and grew, because the cost of hospital care was higher
than the middle class could afford. Even
though the commercial insurers, the Blue's, and the HMO's all negotiate with
doctors and hospitals for prices lower than the providers' stated fees, the
charges for those services still continue to rise [BLS/CPI]. Then
insurers add in their own administrative costs and profit margins, and pass on
the total cost increases to consumers and employers.
Between 1960 and 2008, inflation increased the cost of good and services by
more than 7 times, or 627%, according to the Consumer Price Index. (When prices double, that is a 100% increase;
ten times higher is a 900% increase.)
According to data from the Department of Health and Human Services (HHS),
health care prices went up significantly more than the 627% inflation rate
between 1960 and 2008:
Healthcare
Price Increases ($
billions)
1960 current $B**
1980 current $B
2008 current $B
1960-2007 Inflation
1960-2007 Healthcare
Consumer Price Index* conversion based on $100 in constant 1982-1984 dollars*** [CPI]
$100.00
$ 27.30
$278.38
$ 76.00
$727.38
$198.60
627.4%
TOTAL
National Health Expenditures [HHS Table 3]
27.3
255.7
2,391.4
8,659.7%
Hospital Care [HHS Table 1]
9.0
100.5
722.1
7,923.3%
Physician and clinical services [HHS Table 1]
5.6
47.7
486.5
8,587.5%
Prescription drugs [HHS Table 1]
2.7
12.0
237.2
8,685.2%
Health insurance premiums [HHS Table 2]
5.8
69.0
790.6
13,531.0%
* The CPI
Calculator says you’d need $727.38 in
2008 to buy what you could get for $100 in 1960: 7.27 times more, or a 627%
increase. ** Current
dollars have not been adjusted for differences in prices (such as
inflation) between that year and a base year.
*** Constant dollars are adjusted for differences in prices (such as
inflation) between that year and a base year (1982-1984 = $100).
Compared
to the 627% inflation rate from 1960 to 2008, making prices over 7 times
higher, hospital prices were 80 times higher, and physician prices 86 times
more. Medication prices caught up after
1980 and were 88 times more by 2008, while health insurance premiums were 136
times higher than in 1960.
Does
this mean that medical price increases are largely responsible for
inflation? The obvious difference
between overall inflation and health care inflation rates raises the question,
what would the national inflation rate have been over those years without those
astronomical increases in health care prices?
In our health insurance system we have not just one, but two layers of
separation between consumers and providers—employers, and health insurance
companies. Those buffers effectively conceal
providers’ price increases from their patients, and from the scrutiny of the
general public and our legislators.
Collusion: The
secret and discriminatory pricing practices of the medical profession [Doctors], paired with the
"non-disclosure" terms of their contracts with insurers, provide
fertile ground for collusion among doctors, hospitals, and health insurance
companies. Well-organized groups of providers with a large market share can
match the negotiating power of the big insurance companies.
Investigative reporting by Scott Allen and others on the Boston Globe Spotlight Team, published November 16, 2008, revealed
that the Partners hospital chain and Blue Cross Blue Shield of Massachusetts
had made a secret handshake deal in 2003 for Partners to get 15% to 200% more
than competing hospitals for the same procedures. The result is that
...individual procedures...can be
two or three times more expensive in one hospital than in another.... The hospitals that are paid at the highest
rates all share one trait: They have the bargaining clout to demand higher
insurance payments.... [Allen]
Both insurers and providers gain. Guess who loses? Our health insurance system of secrecy not
only prevents competition; it actually fosters collusion verging on the
criminal between insurers and providers. We're the ones who pay for it.
Collusion
impacts the middle-class wallet in more subtle ways as well. Secrecy in pricing and payments allows price
discrimination. It disempowers all
health care consumers, from individuals to the government.
In
2009, $18,332 was the shocking cost of employee health insurance from the Blue's
for two people in Massachusetts—and
that was at group rates, through my former husband's employer. Another
family member pays $500 a week for family coverage. Why so much?
As an insurance customer, I'm a cheap date, needing only routine and preventive
health care. I had to wonder, out of my
half of that $18,332, or $9,166 how much actually went to my doctors to pay for
my health care? How much did my annual health care actually cost?
There's no way I can find out. I don’t know what my doctors charge, I
don’t know how much the insurance company discounts their prices or how much it
actually pays them, and because of non-disclosure agreements neither of them
will tell me—the insurer says it's all “proprietary information.”
I find that appalling. How can we, as
individuals or as a nation, manage our health care costs when we're not allowed
to know what they are?
Secret pricing in our current health insurance system shields high prices from
public scrutiny, prevents competition, and helps providers take advantage
of consumers.
Worse, our health care system discriminates against whole groups of
people. Charging different prices to
different groups of people for the same product happens not only with doctor
and hospital prices, but also with insurance itself. Commercial health
insurance companies favor the young and healthy; they can reject others, or
charge them exorbitant premiums. And until the health care reform law of
2010, they could also drop insured customers if they got sick.
“Defining Affordability for Massachusetts,” an April 2007 Community Catalyst
report by Christine Barber and Michael Miller, states that
Even the new Massachusetts universal
health insurance law "allows insurance rating differences for age and
geography," and under the new law, the insurance plans charge higher
premiums to older citizens. [Barber]
In fact, they charge seniors twice as much for the same coverage—legalized age
discrimination.
Health insurance companies are so powerful that only big employers and
sometimes the government have the leverage to negotiate with them for lower
premiums; small businesses and individuals have had to pay much more.
Bankruptcies:We
have a law, COBRA, which allows people to keep buying health insurance at group
rates through their former employer when they lose their jobs, but it actually
isn't much help in the real world. Most
people who lose their full-time jobs because of downsizing also lose their
health insurance anyway, in spite of COBRA, because paying 100% of even the
group-rate premiums is still far too expensive for the unemployed and
under-employed.
Non-group individual and family policies are impossibly expensive, far higher
than group policy rates, certainly beyond the reach of the underemployed.
If I hadn’t been fortunate enough to divorce the right man, that's what I would
have faced. For middle class families, losing a full-time job can mean
losing access to all but the most critical, emergency-room health care.
Why? Most doctors and hospitals require a signed commitment to pay any
uninsured expenses before they will even treat us. Before a doctor will see us, we all have to
sign agreements to pay the full price entirely out of our own pockets if we
don't have health insurance, or if the insurance company denies our
claim. And the doctors' prices are not disclosed in the form we have to
sign.
Both the health care providers and the insurers keep secret the insurance
payment schedules and the reduced amounts the physicians and hospitals actually
accept. But the real catch is that the providers charge uninsured
patients by a much higher fee scale than the amounts they actually get for
treating patients with insurance.
The
lower prices are negotiated by the health insurance companies, but they don't
apply to the uninsured. This drives many of the uninsured to go to
emergency rooms instead.
Others try to handle it financially themselves, only to fail. Many
personal bankruptcies in this country are due to medical debt, according to the
San Francisco Chronicle and the Kaiser
Family Foundation [Colliver]. Many people don't realize they can
negotiate with providers to reduce their bills.
AARP reports that medical debt caused a staggering 62 percent of
personal-bankruptcy filings in 2007—and three-quarters of these filers actually
had health coverage when the serious illness began [AARP].
It is now much harder for the average citizen to survive financially even after
declaring bankruptcy, under the federal Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005, because this new law forces more people into 5-year
plans for repaying the medical debts that caused the bankruptcy—another step in
the expanding victimization of the American middle class by our health care
system.
The kind of power the insurance industry has over a family's economic situation
can easily be abused, and it often is. According to the AARP, “…the most frequent
outrage in health insurance may be the rejected claim.” Health insurance is no protection from medical
debt—health insurance companies routinely deny 14% of our claims—one out of
every seven!
Doctors are protected when the insurance company denies our claims, but we are
not—remember those commitments we have to sign in the doctor's office that we
will pay if the insurer doesn't? If we don't take the time and do
whatever we have to do to fight the denial, including getting the doctor to
advocate for us, or if we do all this but are still denied, we have two
choices: pay the doctor's undiscounted
price, or get sued, even forced into bankruptcy.
The unregulated business practices of insurers, hospitals, and doctors, especially
secret and discriminatory pricing, guarantee that the individual citizen
remains unprotected from their power over our pocketbooks. Together they
can gouge us, even drive us into medical bankruptcy, with impunity.
Many
part-timers have incomes that are limited by employer ceilings on the
number of hours we can work, in order to maintain our part-time
status. Although the Massachusetts health reform law lets our
employers off the hook, it still requires us to purchase health
insurance on our own.
Of
course the underemployed can't afford very much in premiums or
coverage. If we get seriously sick, we know massive medical
debt, even bankruptcy, will follow. On the other hand, if our
incomes are kept low enough, the taxpayers are stuck with our health
care costs. Yet we're still taxpayers ourselves.
Those
who still have full-time jobs get low group rates and large employer
contributions for their health insurance premiums; they also have job
security when they need maternity, parental, or dependent care
leave. Most of the underemployed
have no access to group health insurance, and no job security
when family needs arise; instead, they
are often treated as disposable adjunct staff.
With
the more recent 2008-2009 rise in unemployment, there's a new twist
on employers avoiding benefit costs—using use a bait-and-switch
hiring strategy. One employer advertised and interviewed a
well-qualified job applicant for a full-time position with benefits,
then offered the successful candidate only a part-time position with
no benefits and a lower pay rate—less than he was getting on
unemployment.
Isn't
bait-and-switch illegal in consumer advertising? Do we need our
legislators to prohibit it as an employment strategy as well?
Better
yet, mandate full parity in benefits and pay for part-time
employees—and pass laws to separate health insurance from jobs so
our employers can afford to let us work.
Bankruptcies:We
have a law, COBRA, which allows people to keep buying health
insurance at group rates through their former employer when they lose
their jobs, but it actually isn't much help in the real world. Most
people who lose their full-time jobs because of downsizing also lose
their health insurance anyway, because paying 100% of even the
group-rate premiums is still far too expensive for the unemployed and
under-employed.
Non-group
individual and family policies are impossibly expensive, far higher
than group policy rates, certainly beyond the reach of the
underemployed. If I hadn’t been fortunate enough to divorce
the right man, that's what I would have faced. For middle class
families, losing a full-time job can mean losing access to all but
the most critical, emergency-room health care.
Why?
Most doctors and hospitals require a signed commitment to pay any uninsured
expenses before they will even treat us. Before a doctor will see us, we have to sign
agreements to pay the full price entirely out of our own pockets if we don't
have health insurance, or if the insurance company denies our claim. And
the doctors' prices are not disclosed in the form we have to sign.
Both the health care providers and the insurers keep secret the insurance
payment schedules and the reduced amounts the physicians and hospitals actually
accept. But the real catch is that the providers charge uninsured
patients by a much higher fee scale than the amounts they actually get for
treating patients with insurance.
The lower prices are
negotiated by the health insurance companies, but they don't apply to the
uninsured. This drives many of the uninsured to go to emergency rooms
instead.
Others
try to handle it financially themselves, only to fail. Many personal bankruptcies in this country are
due to medical debt, according to the San Francisco Chronicle and the
Kaiser Family Foundation [Colliver]. Many people don't
realize they can negotiate with providers to reduce their bills.
AARP reports that medical
debt caused a staggering 62 percent of personal-bankruptcy filings in
2007—and three-quarters of these filers actually had health
coverage when the serious illness began [AARP].
It
is now
much harder for the average citizen to survive financially even after
declaring bankruptcy, under the federal Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005, because change in the law forces more people into 5-year plans for repaying the
medical debts that caused the bankruptcy—another step in the
expanding victimization of the American middle class by our health
care system.
The kind of power the
insurance industry has over a family's economic situation can easily
be abused, and it is. According to the AARP, “...the
most frequent outrage in health insurance may be the rejected claim.”
Health insurance is no protection from medical debt—health
insurance companies routinely deny 14% of our claims—one out of
every seven!
Doctors
are protected when the insurance company denies our claims, but we
are not—remember those commitments we have to sign in the doctor's
office that we will pay if the insurer doesn't? If we don't take the
time and do whatever we have to do to fight the denial, including
getting the doctor to advocate for us,
or if we do all this but are still denied, we have two
choices: pay the doctor's undiscounted price, or get sued, even
forced into bankruptcy.
The
business practices of insurers and providers, including their secret
and discriminatory prices, guarantee that the individual citizen
remains unprotected from their power over our pocketbooks. Together
they can gouge us, even drive us into medical bankruptcy, with
impunity.
SUMMARY
We
are in a health care cost crisis that has been building for years. Chronic increases in
health care prices and health insurance premiums have hurt us badly. They
have
diverted
middle-class earnings from our paychecks to the insurance industry
reduced
our average weekly earnings while employers' labor costs rose
helped
drive American jobs overseas
driven business, non-profit, and government employers to replace full-time benefited
jobs with part-time, sub-contract, temporary and per diem positions having no
benefits
created
separate and unequal categories of jobs at home
caused
separate and unequal access to health care
forced
medical bankruptcies
destabilized
the national economy
“The Massachusetts Constitution affirms the dignity
and equality of all individuals. It
forbids the creation of second class citizens,” wrote Margaret Marshall, the
Chief Justice of the Massachusetts Supreme Judicial Court [Marshall, C.J.],
when that court rejected the legality of separate treatment of same-sex
marriage by civil government.
In an interview she added, “The
history of our nation has demonstrated that separate is seldom, if ever,
equal.” [Brazelon] Justice Marshall should know; she grew up under apartheid
in South Africa.
In
Brown vs. Board of Education, the 1954 school desegregation case, the
United States Supreme Court found that racially segregated schools
were separate and unequal, and therefore unconstitutional, under the
equal protection clause of Fourteenth Amendment. We have taken giant
steps to correct our nation's civil rights injustices in our schools
and public services.
Yet
we have allowed the creation of a new group of second-class citizens
in this country—the underemployed. Millions of individuals and their
families now suffer both employment and health care systems that are
separate and unequal.
We have
restricted access to health care by funneling it through the
insurance industry, then limited affordable health insurance
primarily to those with full-time jobs at large corporations—which
has excluded nearly 50 million people.
Employment,
and access to health care, are two entirely unrelated issues—everyone
needs health care; not everyone is in the workforce. Since
health care is a universal need, it is a mistake for us to treat access to
health care as a benefit only for regular, full-time employees and their
families.
In our
system, health care and jobs have a stranglehold on each other. Together they
are causing separate and unequal job opportunities, plus separate and
unequal access to medical care, and this is wrong.
Other developed nations don’t
tie health care access to employment status, and they don’t require employers
to carry 35% of the burden of the nation’s health care (70% of the cost of
health insurance premiums for half the population). It’s time we join the
rest of the world.
We
are a creative and resourceful people; we don’t have to lock ourselves into a
system that doesn’t work for us. Attaching
health insurance to full-time employment is a deadly combination. As economic policy, it’s crippling both the middle class
and our employers. It cannot
continue.
ACTION
The 2010
health care reform law has limited some of the abuses by the health
insurance industry, such as cancellation of insurance when illness
strikes; more people will have health insurance, and fewer will face
medical bankruptcy.
But
reform has not yet addressed the underlying cause of the cost crisis
in our health care system.
It's time
to be straightforward about actively and significantly reducing our
health care costs. That's what reform means to me, that's what I've
expected to hear from Washington, and I think not hearing it is
making the American public skeptical about whether health care reform
is really cost-effective enough to matter.
It's not enough to
reduce the rate of cost increases, not enough to improve efficiency
in care and record-keeping, not enough to strengthen health insurance
rules, not even enough to assure health care access and coverage for
all. Each of these is vitally important, but all of them together
fail to reduce our health care costs from the level they're at today.
The fact is that
today, right now, the
middle class can't afford to pay doctors, hospitals and pharmacies
out of pocket, and as individuals we can't afford the insurance that
would pay them for us. Therefore we cannot afford today's health care
costs as taxpayers, either.
It
hardly matters how we process our health care dollars—as insurance premiums, monthly payments, taxes, out-of-pocket doctor
fees and hospital charges, or any combination
of these. The central fact is that we cannot carry any
reformed health care system at today's prices. That's what I
understand when I hear our leaders say we can't afford to continue
the status quo.
Players and
politicians alike have talked circles around the cost problem, and it
isn't fooling anyone anymore. No reform will work unless costs are
reduced, and that means lower prices. Actively and significantly
reducing health care prices—rolling them back—is the name of the
game for today's sharp-eyed voters.
That means a lot of
people in the health care industry will get less money than they've
come to expect, and they're not going to like it. That's why they've
opposed reform, whether they did it openly or behind the scenes,
whether they offered genuine change or only window-dressing support
for reform without substantive change, whether they stated their real
reasons for their opposition, or tried to hide their true motive
behind whatever distorted hot-button issue they could find
, like the
falsely-alleged “death panels,” that might upset voters
enough to do the trick for them.
We
can't afford today's health care prices, period. The prices are the
problem—secret, discriminatory, excessive, and chronically
increasing prices. Our history shows how those prices got so high, but we
know we can't change the past. What can
we do today?
Doctor,
hospital and medication prices are non-competitive because they are
secret. Those prices won't come down, either, until they are no
longer secret, but public, and no longer different for different
groups of people.
There
are two steps we can take immediately to end secrecy and discrimination in
pricing throughout the health care industry.
We can insist that Congress pass legislation requiring all health care
providers and suppliers to publish their prices, along with the average of the actual payments
they’ve been receiving from insurers.
And we can require that all the patients using a given doctor, hospital,
or medication pay the same price for the same thing.
Once
we’ve taken these two steps, then consumer awareness and natural marketplace competition will do a
great deal to bring health care prices down toward a level where the middle
class can once again afford to pay for routine medical care without assistance
from either insurance companies or the government.
In addition, there are six major changes we can make in our health insurance
system:
1. Stop
insuring everyday healthcare expenses. Drop the insurance model
for ordinary, everyday and preventive health care needs. They are not insurable
because there is no shared risk.
I
buy homeowner's insurance along with lots of other people—we know
someone's house will burn down but we don't know whose, so we pool
our resources and share the risk. Insurance is for a rare event like
a medical catastrophe or a house burning down, and I'd be glad to buy
some major medical health insurance along with everyone else in order
to share the risk of a big medical expense. Shared risk among a large pool is the
purpose of insurance.
However, we don't buy insurance for
other everyday needs like groceries and utilities, where there is no shared risk. We all have to
pay for bread, soap, and electricity anyway, and insuring them would
only add add an unnecessary layer of costs to those essential purchase. Likewise, insuring
everyday health care, which is not a shared risk, is absurd—an
additional and unnecessary expense on top of a universal need.
Health
insurance began during the 1920's when the cost of hospital care became higher
than the middle class could afford to pay, and the insurance then was only for
hospital care, not for doctors' fees. We
could still afford to pay for our routine care in physicians’ offices long after
we needed shared-risk health insurance for the extraordinary expense of
hospital care.
We
need to make insurance for hospital care and payment for everyday medical care
separate again—to insure only extraordinary health care expenses like
hospitalizations, and find another way to pay for primary doctors' care.
2. Switch
to average-annual-cost, fee-per-patient plans
with affordable monthly payments for routine and preventive medical
care and chronic disease management, much like the budget plans
offered by some utility companies
—again, at the same
prices for everyone in a provider's pool, regardless of gender, age
or employment status.
One discount might be allowed: for non-smoking moderate drinkers whose blood pressure, sugar, weight, and physical fitness were in a
numerically-defined, publicly-known range for good health.
3. Restrict health
insurance to major, extraordinary or catastrophic medical events such as injuries and
illnesses requiring hospital care, incidents which are insurable through
shared risk. This
is consistent with the purpose of health insurance when it began in 1929—to
share the risk of an expensive hospital stay.
4. Assure
a seamless transition between major medical insurance and
regular, ordinary medical care plans, with no gaps in coverage and
nothing excluded.
5. Include medical errors
in major medical insurance.
If we handle mistakes like rare events that are insurable like any other
accident, then the whole issue of malpractice insurance and litigation costs
would be removed from the rationale for charging high prices for doctors’
care. This would also end the practice
of hiding and denying medical errors, because insurers would join regulatory
agencies in scrutinizing the causes to prevent more of the same.
While medical errors may be rare, human nature means that
doctors, like anyone else, will make mistakes. Statistically speaking,
errors are inevitable, and some people will be hurt.
We can do a
great deal to reduce the frequency of medical mistakes and make more and more
of them preventable—if we protect doctors from having to conceal and deny them
in order to shield themselves and each other from devastatingly expensive
lawsuits.
Including doctors' and hospitals'
errors along with other rare but costly medical events under major medical
insurance policies would relieve physicians of the expense of their burdensome
malpractice insurance premiums, and would shift that burden to the shared risk
category for patients, where it belongs.
Negligence and incompetence would not be
insurable, and would be more readily exposed and stopped by fellow doctors
because concealing a colleague’s errors would make a doctor complicit, and
therefore equally negligent and liable. Instead
of demanding self-regulation and pretending infallibility, the medical
profession would be able to take on the honest responsibility of publicly and
transparently policing itself—backed up by regulatory and insurance oversight.
6.Remove health insurance from employment.
Restrict health-related employee insurance benefits to disability insurance
only, which is directly connected with earnings and jobs.
Since health care is a universal
need, it is a mistake for us to treat access to health care as a benefit only
for employees.
We
have tested the idea of providing health through insurance as a job benefit for
more than two generations—since World War II. This approach is failing
us: depleting our
earnings, increasing business expenses, harming our ability to compete in the
global economy, driving American jobs overseas, causing separate and unequal
jobs at home.
Breaking the chains
binding employers to provide health care benefits would strengthen their opportunities in the global marketplace. It would remove the health insurance companies' access to our paychecks, and increase the income we'd have available to pay for our own medical
care.
By relieving America's industries of a major cost unrelated
to their businesses, it would also eliminate that tax deduction, and thereby
increase tax revenues without increasing corporate tax rates.
Unions may well oppose the removal of health insurance as a
job benefit. Perhaps they'll claim that eliminating it will harm the
middle class, but that claim would have to be weighed against the greater
damage caused by allowing the health insurance industry an ever-expanding
access to our paychecks and our business profits. It cannot be sustained, and that costly
benefit is driving increasing hostility to unions, even threatening everyone’s
collective bargaining rights. Unions
have a choice to make, and the time is short.
Stopping our employers
from providing health insurance would significantly reduce the reach of the
health insurance industry, and reduce its inflationary impact on the national economy.
BENEFITS TO DOCTORS, OPPORTUNITIES FOR INSURERS
Expecting
health care providers to roll their prices back far enough for the American
middle class to be able to cover our everyday health care needs out of pocket or with monthly
payments, plus get affordable insurance against
catastrophic medical events—with neither kind of
health care subsidized for us by employers or the government—may look like an
impossible pill for the medical profession to swallow.
However, these changes would not only benefit the middle class by
making health care
affordable, getting the health insurance companies out of our paychecks, and making more of
our earnings available to us. They would
also get the insurance companies out of the practice of medicine, and greatly
improve the financial picture for doctors, especially primary care providers,
in at least five different ways.
First, eliminating our current
fee-for-service form of paying for health care through insurance, and replacing
it with average-annual-cost plans for primary care providers and, for
specialists, with major medical insurance policies whose coverage was
determined by law, would remove the need for each doctor's office to cope with
the constantly changing coverage details for literally hundreds of different
health insurance plans.
Today, in order to get paid for the care they provide, far
too much of doctors' time and resources are consumed by meeting insurance
companies' bureaucratic approval
procedures and paperwork requirements. There is an alternative. Massachusetts General Hospital’s research suggests
that
Physicians end up using nearly
12 percent of their net patient service revenue to cover the costs of excessive
administrative complexity. A single
transparent set of payment rules for multiple payers, a single claim form, and
standard rules of submission, among other innovations, would reduce the burden
on the billing offices of physician organizations. On a national scale, our hypothetical modeling
of these changes would translate into $7 billion of savings annually for
physician and clinical services. Four
hours of professional time per physician and five hours of practice support
staff time could be saved each week. [MGH]
Reducing
the size of their office staff would be a substantial savings for the medical
profession, which they could pass on to their patients at no loss to
themselves.
Second, physicians would no longer have to fight the insurers' denials of
coverage for one in seven insurance claims, or sue their patients in court, in
order to get paid at all. Today, these
insurance cost factors reduce doctors' freedom to focus on providing care.
Eliminating these two
big insurance-caused overhead expenses—denials and collections actions—would
let doctors reduce their prices without reducing their net incomes.
Third, a monthly payment system for primary care, and standardized major
medical insurance policies, would put the doctors back in the driver's seat. Their professional judgment has been usurped
by the health insurance companies whenever they can dictate care decisions
according to the terms of each patient’s insurance plan. Physicians would be free to determine patient
needs and provide their medical care without getting permission from the
insurance companies.
Fourth, eliminating the insurance industry's control over the terms and
conditions of medical practice would be likely to stabilize patient populations
for primary care providers. Today,
patients too often have to change doctors at the whim of the insurance
companies, either when insurers drop providers, or when doctors stop accepting
the patients' health insurance plans.
From the business point of view, customer turnover is expensive, while repeat
business allows more efficient service.
Without interference from the insurance companies, both primary care doctors
and their patients could depend on long-term continuity of care, and come to
rely on each other they way they used to.
Finally there is a fifth factor, already mentioned above, that would greatly benefit
all health care providers: eliminating malpractice insurance by insuring
medical errors under major medical insurance, like any other rare accident or uncommon illness. This would be a substantial cost-cutting
measure for physicians to pass on to their patients.
Without cutting into
physicians’ earnings, we can significantly reduce their costs if they could downsize
their support staff, stop fighting claim denials, avoid collection costs, stabilize
their patient populations, and eliminate malpractice insurance premiums. Those changes would not be bitter pills for
the medical profession to swallow.
The health insurance
industry and its employees would appear to take the biggest hit from these changes. Removing everyday health care from the group
of insurable medical needs, and converting such care to average annual cost
plans with regular monthly payments directly to primary care doctors, would
make a lot of our medical care inaccessible to the health insurance companies,
and entirely eliminate the premiums they now collect to cover routine
care.
However,
many insurers would have the option of switching their business away from
insurance and into managing those average annual cost plans. They already have electronic medical data and
records systems established and in use.
Those who continued in the health care industry as insurance companies
would be limited to selling major medical policies to the public, and not to
employers.
In addition, a
related business opportunity is already opening up for insurers to replace some
of that revenue stream: electronic
medical records. This would be a
feasible job transition for insurance employees with minimum retraining
needed—except perhaps for the mind set—since insurers already have the
data management systems in place to make such a change.
CONCLUSION
There's
no question that health care prices have to come down in order to reverse the
annual cycle of double-digit increases in health insurance premiums. Every step we can take to reduce our health
care providers' costs of doing business would allow them to reduce their prices
more.
The
goal of health care price reductions is affordability for the middle
class. According to a 2007 Community
Catalyst report in Massachusetts,
Middle
income people pay average of 8.5% of income for total health costs
At
600% FPL, people can afford unsubsidized, non-group health plans, at
8.5%/income after meeting other basic needs.
[Barber]
In
other words, those whose incomes are 600% (seven times) or more above the
Federal Poverty Level (FPL) can afford to pay for their health care with no
help from either employers or the government, as long as the total costs for
all their care, including health insurance premiums, medications, and co-pays, does
not exceed 8.5% of their earnings.
If these conditions were the norm, it would be reasonable to pass legislation
requiring people to buy average-annual-cost plans for routine and preventive
medical care and chronic disease management, plus major medical insurance for
extraordinary expenses—perhaps on subsidized sliding scales for those with
lowest incomes—just as our states can require drivers to buy auto insurance, and
national banks can require mortgaged property to be insured.
While some claim that states, but not the federal government, may
require all to purchase health insurance, federal funds could be tailored to
reward states that require universal coverage and penalize those that do
not. Furthermore, under
such a law people could opt out, unless and until they had a
medical emergency and could not afford to pay for those medical services
out of pocket. Then they could be
required to purchase health coverage, and to pay a substantial penalty for
having none and imposing their costs on the public.
During the 2009-2010 health care reform debates in Congress, the
health insurance companies insisted that requiring universal coverage was
essential in order to have a large enough pool of the insured to keep
premiums affordable. If healthy young workers were all buying
health insurance, the costs of caring for those with serious medical conditions
and for retired seniors would balance out—and affordable health insurance would
still be available for those young workers when they suffered medical
misfortune or grew older, and needed more medical care.
By the same big-enough-pool reasoning, with universal coverage we
could prohibit price discrimination by any criteria, including age.
For
a specific example on the issue of affordability, in 2006 the FPL for a family
of 4 was $20,000; seven times that amount (600%) would be $140,000. Theoretically, this
family could afford to pay out of pocket up to 8.5%, or $11,900, for their
total health care—at the current health care prices for 2006, without the
benefit of the several steps we can take
to significantly reduce those prices.
The
problem is that $140,000 a year is nearly twice the $68,000 a Boston area study
calculated is the minimum household income necessary for a family of four—on a
budget for essentials only, including nearly 8% ($5,440) for health care, but
with no discretionary income available for vacations, dining out, charity,
gifts, new technology, or entertainment (not even cable TV or cell phones).
For
a capitalist economy that had grown to expect its consumers would have 50% of
their income available for discretionary spending, that $68,000 a year, or
$17/hour for each of the two income earners, is not enough. They would need double that amount--$136,000,
or $34/hour each—for their consumer spending to return to the levels that once
made our economy thrive.
The
other side of the solutions package for our health care cost crisis, besides
medical care cost-cutting, is to raise middle-class incomes. (See Hearthstones,
“Erosion of the Middle Class,” for the causes of depressed incomes for the
American middle class, and steps we might take to correct them.)
The
demand for insurance was created, and continues to grow, because the middle
class could not and still cannot afford the continually-increasing prices charged by health care providers and, since 1980, by the pharmaceutical companies as well. Chronic insurance
premium increases expand on those underlying price increases.
COURAGE TO ACT
Many
U.S. political leaders have
been saying we must reduce health care costs, but I have seen only one with the
courage to take effective action and actually start to do it: Governor Deval Patrick of Massachusetts.
In the spring of 2010, Massachusetts health insurance companies sought
significant rate increases—again. The Boston Globe reported that Gov.
Patrick's administration rejected a majority of the premium increases sought by
the insurance companies for individuals and small businesses.
“Unless insurers can give us a good
reason why, when everything else is flat, they deserve 20 percent, 30 percent,
and in some cases 40 percent increases, they’re going to be denied,’’ Patrick
said. [Weisman]
The insurers immediately took him to court, and a Suffolk Superior Court judge
ruled in his favor. The insurance
companies then had no choice but to go back to the providers to re-negotiate
for reduced price increases. However,
Unlike in past years, insurers believe they have widespread backing from
politicians, regulators, and employers to aggressively push back against large
price increases, even if it means some unhappy providers drop out of insurers’
networks, forcing patients to find new doctors and hospitals. [Kowalczyki]
Ultimately, the Patrick administration and the insurers negotiated many of
those rate increases to less than 10%. [Weisman] It was still a reduction in the rate of
increase, not an actual reduction of current prices, but it was a solid start
that we can repeat, and build on, to use a carrot-and-stick approach and force
actual reductions in health care prices.
Gov.
Patrick gave us the evidence for how we might begin. We actually do have
the political power to compel lower prices for our health care. We can do this—we really can!
When everyday health care and
medication prices are no higher than the middle class can afford to pay out of
pocket, then—and only then—will we have a viable health care system in this
country.
Beckmann,
Alan. “Comparing
Employer-Provided Medical Care Benefits for Lower and Higher Wage
Full-Time Workers,” Compensation and Working Conditions, Bureau
of Labor Statistics, December
19, 2007. http://www.bls.gov/opub/cwc/cm20071214ar01p1.htm
BLS/CES.
U.S. Department of Labor, Bureau of Labor Statistics (BLS), Current
Employment Statistics (CES) Data.
http://www.bls.gov/ces/data.htm,
CES Databases. Employment,
Hours, and Earnings - National (Current
Employment Statistics - CES), Series
Id CES0500000031,
Seasonally Adjusted, Total private. [see CES Databases,
One-Screen Data Search; choose 1) AVERAGE WEEKLY EARNINGS, 1982
DOLLARS; 2) Total private; 4) Seasonally Adjusted; 5) Get Data; at
the top of the database, "Change Output Options, select
1973-2006.]
BLS/CPI. U.S. Department of Labor, Bureau of Labor Statistics Data
(BLS), Consumer Price Index (CPI).
http://www.bls.gov/cpi/data.htm.
At the page "CPI Databases," scroll down to Calculators /
More Tools / "Create Customized Tables (multiple screens)--a
form-based query application which allows you to obtain BLS time
series data based on choices you make." Choose Series
Report, and enter Series ID's SUUR0000SAM2 & SUUR0000SAM1
for Medical care services and Medical care commodities,1999-2008
(results are not seasonally adjusted).
BLS/CPS
Unemployment. U.S. Department of Labor, Bureau of Labor
Statistics (BLS), Current Population Survey (CPS), National
Unemployment Rate. http://data.bls.gov/cgi-bin/srgate
[See Series ID LNS13023621, 1999-2010].
BLS/CPS
Part-time. U.S. Department of Labor, Bureau of Labor Statistics
(BLS), Current Population Survey (CPS), Employment Situation
archives, April 2001 Table A-4, May 2003 Table A-5, and September 2010
Table A-8, http://www.bls.gov/schedule/archives/empsit_nr.htm.
*Also Table 19, Household Data, Annual Averages, 2009, by hours of
work. http://www.bls.gov/cps/cpsaat19.pdf
HHS.
U.S. Department of Health and Human Services (HHS), Centers for
Medicare and Medicaid Services (CMS), National Health Expenditure
Data/Historical,
(this link downloads the file),http://www.cms.hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp.
Download the PDF file "National
Health Expenditures by type of service and source of funds, CY
1960-2007." HHS
1. Table 1: National Health Expenditures Aggregate, Per Capita
Amounts, Percent Distribution, and Average Annual Percent Growth, by
Source of Funds: Selected Calendar Years 1960-2007, "Billions
of Dollars" and "Percent of Gross National Product." HHS 2.
Table 2: National Health
Expenditures Aggregate Amounts and Average Annual Percent Change, by
Type of Expenditure: Selected Calendar
Years 1960-2007. HHS 3. Table
12: Private Health
Insurance Premiums, Benefits and Net Cost, Selected Calendar Years
1980-2007.
Kaiser,
BLS, Beckmann.
It is a somewhat conservative estimate to say that our employers
carry 35% of the nation's health care costs, or 70% of the premiums
for half the population, because the employers' portion is often more
than 70%. For example, according to the Kaiser
Foundation, “The average percent worker contribution was 16% for
single coverage and 32% for family coverage,” in 1999, and “17%
for single coverage and 27% for family coverage” in 2009. [Kaiser:
Employer health benefits 1999, p. 60, and 2009 p. 66,
http://www.kff.org/insurance/ehbs-archives.cfm]
The
BLS publication Program
Perspectives on Health Benefits
reports that in March 2008 employers paid between 81% and 90% of the
premiums for single employees' health insurance, and 71-73% of the
premiums for family coverage.
http://www.bls.gov/opub/perspectives/issue1.pdf.
Incidentally,
the BLS also reports that “For family coverage, however, the
average monthly employee contribution is almost $25 more for lower
paid workers than for their higher paid counterparts.” [Beckmann,
Alan: “Comparing Employer-Provided Medical Care Benefits for Lower
and Higher Wage Full-Time Workers,” Compensation and Working
Conditions, Bureau of Labor Statistics, December 19, 2007.
http://www.bls.gov/opub/cwc/cm20071214ar01p1.htm]
Thomasson,
Melissa (Miami University, Ohio). "Health Insurance in the
United States," EH.Net
Encyclopedia of Economic and Business History,
(or Economic
History Encyclopedia).
Economic History Services, 2003. http://eh.net/encyclopedia/article/thomasson.insurance.health.us.
