Health Versus Wealth

iVillage Member
Registered: 04-16-2003
Health Versus Wealth
48
Fri, 07-09-2004 - 11:54am
Health Versus Wealth

By PAUL KRUGMAN

Published: July 9, 2004

Will actual policy issues play any role in this election? Not if the White House can help it. But if some policy substance does manage to be heard over the clanging of conveniently timed terror alerts, voters will realize that they face some stark choices. Here's one of them: tax cuts for the very well-off versus health insurance.

John Kerry has proposed an ambitious health care plan that would extend coverage to tens of millions of uninsured Americans, while reducing premiums for the insured. To pay for that plan, Mr. Kerry wants to rescind recent tax cuts for the roughly 3 percent of the population with incomes above $200,000.

George Bush regards those tax cuts as sacrosanct. I'll talk about his health care policies, such as they are, in another column.

Considering its scope, Mr. Kerry's health plan has received remarkably little attention. So let me talk about two of its key elements.

First, the Kerry plan raises the maximum incomes under which both children and parents are eligible to receive benefits from Medicaid and the State Children's Health Insurance Program. This would extend coverage to many working-class families, who often fall into a painful gap: they earn too much money to qualify for government help, but not enough to pay for health insurance. As a result, the Kerry plan would probably end a national scandal, the large number of uninsured American children.

Second, the Kerry plan would provide "reinsurance" for private health plans, picking up 75 percent of the medical bills exceeding $50,000 a year. Although catastrophic medical expenses strike only a tiny fraction of Americans each year, they account for a sizeable fraction of health care costs.

By relieving insurance companies and H.M.O.'s of this risk, the government would drive down premiums by 10 percent or more.

This is a truly good idea. Our society tries to protect its members from the consequences of random misfortune; that's why we aid the victims of hurricanes, earthquakes and terrorist attacks. Catastrophic health expenses, which can easily drive a family into bankruptcy, fall into the same category. Yet private insurers try hard, and often successfully, to avoid covering such expenses. (That's not a moral condemnation; they are, after all, in business.)

All this does is pass the buck: in the end, the Americans who can't afford to pay huge medical bills usually get treatment anyway, through a mixture of private and public charity. But this happens only after treatments are delayed, families are driven into bankruptcy and insurers spend billions trying not to provide care.

By directly assuming much of the risk of catastrophic illness, the government can avoid all of this waste, and it can eliminate a lot of suffering while actually reducing the amount that the nation spends on health care.

Still, the Kerry plan will require increased federal spending. Kenneth Thorpe of Emory University, an independent health care expert who has analyzed both the Kerry and Bush plans, puts the net cost of the plan to the federal government at $653 billion over the next decade. Is that a lot of money?

Not compared with the Bush tax cuts: the Center on Budget and Policy Priorities estimates that if these cuts are made permanent, as the administration wants, they will cost $2.8 trillion over the next decade.

The Kerry campaign contends that it can pay for its health care plan by rolling back only the cuts for taxpayers with incomes above $200,000. The nonpartisan Tax Policy Center, which has become the best source for tax analysis now that the Treasury Department's Office of Tax Policy has become a propaganda agency, more or less agrees: it estimates the revenue gain from the Kerry tax plan at $631 billion over the next decade.

What are the objections to the Kerry plan? One is that it falls far short of the comprehensive overhaul our health care system really needs. Another is that by devoting the proceeds of a tax-cut rollback to health care, Mr. Kerry fails to offer a plan to reduce the budget deficit. But on both counts Mr. Bush is equally, if not more, vulnerable. And Mr. Kerry's plan would help far more people than it would hurt.

If we ever get a clear national debate about health care and taxes, I don't see how President Bush will win it.

http://www.nytimes.com/2004/07/09/opinion/09KRUG.html?hp

iVillage Member
Registered: 08-28-2004
Sat, 08-28-2004 - 11:07pm
maybe our health care costs wouldnt be so high if lawyers like EDWARDS didn't sue them for every little thing. My uncle was a lawyer, he died in 1976 and I remember him saying back then " once lawyers are allowed to advertise we will all be in trouble" Doctors can't afford the malpractice insurance no wonder our health care costs are so high.
iVillage Member
Registered: 03-18-2000
Sun, 08-29-2004 - 1:04am

If a Dr.or hospital

 


Photobucket&nbs

iVillage Member
Registered: 07-04-2003
Sun, 08-29-2004 - 1:31pm
Lawsuits are one of the main reasons, perhaps even the #1 reason, for soaring health care costs. And John Edwards has been a direct contributor to this problem. Each doctor has to pay tens of thousands or hundreds of thousands of dollars every year just for malpractice insurance. I've read several times that it's the #1 reason doctors quit their practice. Ob/Gyn doctors often have to pay $300,000 a year just for malpractice insurance! The doctors have to cram in more and more patients to cover their insurance costs, which means they can't even adequately care for those patients. In some states the shortage of doctors is a major crisis. If you are a pregnant woman in Nevada, good luck finding a doctor to take care of you and deliver your baby, and that's no joke. Most doctors say they would not recommend their profession to their children. Caps MUST be put in place for lawsuits.

Also, allowing drug companies to advertise on TV, in magazines, etc. was a big mistake. Imagine what this costs them. Of course the costs get passed on to us.

iVillage Member
Registered: 03-23-2003
Sun, 08-29-2004 - 1:43pm

Caps MUST be put in place for lawsuits.


Sorry, I don't agree.


iVillage Member
Registered: 04-16-2003
Sun, 08-29-2004 - 1:51pm
Glad to here the good news. It is always so great to get better.
iVillage Member
Registered: 04-16-2003
Sun, 08-29-2004 - 1:55pm
<< Add drug companies to that list.>>

Three loud cheers from here.

iVillage Member
Registered: 04-16-2003
Sun, 09-12-2004 - 2:21pm
Perhaps this thread should be chanaged to wealth equals health.

Higher medical costs cause employers to drop, reduce benefits

September 11, 2004

BY KIM NORRIS

FREE PRESS BUSINESS WRITER

As a new enrollment period gears up, employers are bracing for how much it is going to cost to cover their workers' health.

Although insurance premiums are expected to rise at a slower rate than in the previous four years, the increase is coming on top of rates that have risen an average of 59 percent since 2001.

The cost of employer-sponsored health coverage rose an average of 11.2 percent in 2004, about five times the rate of inflation and workers' wages, according to a survey released Thursday by the Kaiser Family Foundation and Health Research and Educational Trust, which jointly conduct an annual benefits survey of 3,000 companies.

Although the 2004 increase was smaller than the 13.9-percent increase in 2003, it still was the fourth consecutive year of double-digit increases.

In 2004, the average cost of health coverage was $9,950 for a family plan and $3,695 for single coverage, the survey found.

The cost of providing health benefits to workers has some of the country's largest companies calling on the government for relief, a major departure for companies that for years willingly assumed responsibility for insuring the health of their employees.

"When you have enormous companies like GM and Ford saying they're powerless, it tells you something," said Larry Levitt, vice president of the Kaiser Family Foundation. "If GM tells you they can't do anything, how is the corner grocery store supposed to cope?"

Many are not. More companies appear to be dropping coverage. Some are continuing to cover current employees but not new hires. Many are asking workers to share the premium cost -- and that share is creeping up. Workers are paying higher copayments for doctor and hospital visits and for prescription drugs. Their deductibles are rising and their benefits are shrinking.

From 2001 to 2004, the percentage of employers offering health coverage to their workers declined from 65 percent to 61 percent. That means at least five million fewer jobs are providing health insurance in 2004 than three years earlier, analysts found. Most of the decline in employer-sponsored coverage was attributed to small businesses, which typically receive the largest premium increases and have the fewest financial resources to absorb them.

At Sweetwater Texas Steakhouse, keeping employees' health insurance has commanded more of owner Steve Griffith's time and cut into profits at the Dearborn restaurant, despite the fact that relatively few of his 23 workers get coverage through the company and the ones who do share equally in the costs.

"I have bills of $1,000 a month. When you have $30,000 in gross sales, that's a big number," Griffith said. "At the same time, it becomes harder for workers" who share the costs.

Kitchen manager David Kovalchik has worked at the restaurant for 10 years, starting as a dish washer at age 14. For the last six years, the Allen Park resident has received coverage through his employer, and this year is paying about $85 a month for coverage for him and his wife. But, fewer doctors were willing to accept the health plan the company contracts with through Wayne County.

Today, Kovalchik's wife, Jennifer, and 3-week-old daughter, Larissa, are on Medicaid, the insurance program for poor and disabled people supported through state and federal taxes, while Kovalchik basically prays he doesn't get sick. He looked into coverage on his own but said the cheapest plan would cost about $150 a month just for him and only for hospitalization - an amount equivalent to almost one-tenth of his annual salary.

"It's a little nerve-wracking," he said. "I'm not worried about it for myself, but for my wife and baby. Now I think about it more."

Kovalchik admits he would consider leaving the only employer he's ever known for a job that offered better health coverage.

Griffith understands.

"I wouldn't blame him for leaving. I'd help him pack," he said.

According to the Kaiser/HRET Survey, employee contributions to employer-provided health coverage increased 57 percent for single coverage and 49 percent for families, while workers' wages increased 12 percent.

"In some sense I think a lot of business execs are throwing up their hands," Kaiser's Levitt said.

"Now, the only market-based solution has been shifting costs to employees. Employers held off doing it for a long time. But in the last year or two, it definitely accelerated."

Millenium Manufacturing is one company resisting that trend.

Like most auto suppliers, Millenium has felt the fallout from lower sales, overstocked inventories and competition from overseas. The company, with locations in Troy and Redford, has gone from 80 workers to 40 this year. Still, the company offers health coverage to its workers and pays for nearly all of it.

Health benefits account for about 30 percent of the tier-3 supplier's payroll, according to Chief Financial Officer Brian Callaghan.

"We've thought about not offering it, especially now when we've had to do layoffs," he said. "But we're competing in the marketplace with everybody, not just manufacturers.

"Yes, it's a burden, but we think it's part of our competitive edge in hiring and retaining workers. And we want to keep our best people."

Millenium changed its health plan when it received notice its premiums were going up 60 percent in 2003.

The company switched insurers for medical coverage and, on the recommendation of its benefit consultants, found a separate provider for prescription-drug coverage.

"By carving out the prescription-drug benefit for the first time in 2003, we saved about $4,000 a month over what it would have cost under our previous plan," Callaghan said.

The company also implemented a $10 copayment for doctor's visits in 2003 and raised copayments for certain medications.

Millenium employees have a choice between a medical plan with a high deductible, which the company pays for, or a plan with a lower deductible that the employee pays part of. Callaghan said about half the workers take each option. Workers covered by their spouses' plans receive a $100-a-month opt-out payment.

The company has not received its rate notice for 2005 yet, but Callaghan expects to see an increase because the pool of workers is smaller. He said the company does not expect to pass more costs on to employees.

Wilson Wigley III, has been with Millenium for five years. The 33-year-old purchasing manager said he feels blessed to still have a job, let alone one that pays most of the health coverage for him and his family.

"It would be very hard for me to pay for it on my own, but I still would have it. I take health insurance very seriously," he said.

http://www.freep.com/money/business/insurance11e_20040911.htm

iVillage Member
Registered: 03-29-2003
Sun, 09-12-2004 - 2:30pm
"Consumers would select any health care providers they wanted that were approved by the federal government."

That freaks me out. Why should the government approve my doctor???

I like knowing that private insurance companies are competing for my company's business and for our employees to choose them. It helps keep the quality of care high.

Carrie

 

 

Photo Sharing and Video Hosting at Photobucket ths

iVillage Member
Registered: 03-26-2003
Sun, 09-12-2004 - 2:58pm
It was my understanding that (I am not very educated on this subject) lawmakers wanted a cap on punitive, but not liability. (If I have that right, meaning you couldn't get millions to cover pain and suffering, but the cost of care would be covered in full.)

I agree with that. There is no reason to sue for so much more than your medical bills.

iVillage Member
Registered: 04-16-2003
Sun, 09-12-2004 - 6:59pm
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The cost also, competition is expensive!