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When Will Health Care Cost Too Much?

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Most healthy people think about their health insurance about as much as they do their retirement; not much. It’s hard to value something that you don’t use regularly.

But a recent survey showed that the total cost for an employed person’s health care has risen to now be more than $20,000 a year. That includes what the employer pays as well as the individual with deductibles, copays and family premiums. The cost increased 5% this year, is expected to go up 6% next year and has been rising at twice the rate of wage growth for 10 years or more.

Since I hear so few griping about it, I find myself thinking of the frog in a pot slowly brought to a boil. Most of us aren’t jumping out.

Some are. For the first time in 10 years the number of uninsured Americans increased last year, now up to 8.5%. Before the Affordable Care Act, we were at 13.3% uninsured. I can’t blame folks for dropping health insurance when the total annual cost could buy you a pretty good car, or pay for a kid’s college costs.

But will these slow but steady increasing health care costs kill us?

I believe they already are.

Think how plush “Cadillac Health Plans” for well-paid or union workers tie them to a job. They might have an idea of a way to do this work better and want to go off on their own and build a new business. But the costly health insurance for small businesses could scare off an entrepreneur.

I believe the cost of health care is contributing greatly to our stagnating economic growth, but even more to our slow wage growth.

We hit the lowest unemployment on record recently, but wage growth in adjusted dollars, especially for the lower income earners has not changed much since the 1960’s.

But benefits have increased significantly. Wages are being eaten up by health insurance costs.

With a significant amount of our income being siphoned into health care, we ought to all be pretty healthy, huh? Let me remind you, the United States has seen a declining life expectancy for three of the last four years. This is mostly due to the striking rise in accidental overdose deaths and suicides. And we can put a lot of the blame for narcotic overdose deaths square at the feet of our medical industrial complex.

Let’s stop feeding it.

That’s what the Democratic presidential candidates who have lined up behind Bernie for the Medicare for all have in mind. Outlaw private insurance, let government starve the big Pharma, for-profit hospitals. I understand their perspective, I just don’t buy it.

I believe the market place would be much more powerful than a big government program, and would better suit our national character. Let private insurance compete against government plans, the so called “Public Option”. Such a change might be acceptable, though I can’t imagine any Republican voting for anything right now.

What is the Republican plan for this? I’ve heard the “Repeal” chant for eight years, then the “Repeal and Replace” chant for another two, but now I only hear crickets from Republicans; not even a Tweet. Maybe they have found a cool place in the simmering pot.

I don’t think so. I think we are all in this frog stew together. And the sooner we can start talking about realistic solutions, the better off we all will be.

It can start on the state level. There are many promising innovations some states have made in their Medicaid programs. Look at Missouri’s Health Homes for high cost patients. Consider Tennessee’s waiver for Money Follows the Person to move patients out of high cost nursing facilities into community care. Idaho has a similar waiver. Oregon is rolling out Community Accountable Care Organizations that put some of the risk (and reward) at the local level.

It’s time to get to work. Feel the heat.
 

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