http://news.yahoo.com/s/latimests/20050915/ts_latimes/risingpremiumsthreatenjobbasedhealthcoverage;_ylt= Ai9DtI43qR6mbnVSiPKsbQbF_8QF;_ylu=X3oDMTA4b3FrcXQ0 BHNlYwMxNjkz

The average cost of health insurance for a family of four has soared past $10,800 — exceeding the annual income of a minimum-wage earner, according to a survey released Wednesday.


For some, this year's survey by the Kaiser Family Foundation and the Health Research Educational Trust was the latest sign that a relentless rise in premiums threatens to collapse the central pillar of America's health insurance system: job-based health coverage. Since 2000, premiums have gone up 73%, while wages have grown 15%, Kaiser researchers concluded.

Rising costs are forcing many businesses, especially smaller companies, to stop offering coverage and are causing some employees who can no longer afford insurance at work to buy it on their own — or go without.

"What we are seeing is an unraveling of the way we finance healthcare in the United States," said William Custer, director for the Center for Health Services Research at Georgia State University in Atlanta. "It is coming apart at the edges, and those edges are small business and low-wage workers. The levees are breaking."

Drew E. Altman, president of the Kaiser Family Foundation, said the cumulative effect of rising costs was that "we are seeing a slow deterioration of our employment-based health insurance system, which is the backbone of healthcare in this country."

As the Kaiser report was being released Wednesday, Starbucks Corp. Chairman Howard Schultz said his company would spend more on health insurance for its employees this year than on raw materials needed to brew its coffee — a sign, he said, that American businesses face a healthcare crisis.

"It's completely nonsustainable," he said, even for companies such as his that "want to do the right thing."

The Kaiser Foundation survey, published each fall before workers choose policies in open-enrollment periods, is considered the definitive measure of what coverage will cost workers and employers.

This year researchers, who collected data from 2,995 randomly selected U.S. employers, estimated that premiums for family coverage grew 9.2% from last year to $10,880, including company contributions — more than the $10,712 a worker earns before taxes at the federal minimum wage.

The average worker's share of premiums for family health coverage was $2,713 in 2005, or about a quarter of the total cost. The average employee contribution has increased by more than $1,000 in three years.

The premium increase is less than the Kaiser survey has found in recent years — the jump was 11.2% in 2004 and 13.9% in 2003 — but it continues a trend that is hard on employers and families alike.

Employers, equally hard-pressed by the rising costs, increasingly are dropping health coverage as an employee benefit or offering high-deductible plans that shift more cost — and more risk — to employees. Just 60% of businesses offered health insurance this year, down from 69% in 2000, the study found.

The employer-sponsored system of healthcare in the U.S. is relatively recent, tracing its roots to wage and price controls implemented by the government during World War II. To attract workers, some companies began offering health benefits as a perk, said John R. Graham, director of healthcare studies at the Pacific Research Institute in San Francisco.

But "employers don't have a competitive advantage to providing you health insurance any more than they have in buying you a house or a pair of running shoes," Graham said.

Small companies are most likely to drop coverage because of cost concerns, according to Menlo Park, Calif.-based Kaiser Family Foundation, which is not affiliated with healthcare provider Kaiser Permanente.

"When we consider that it is small business that drives the economy — to have that engine resting on the backs of millions of uninsured workers is a bad proposition for the U.S. economy," said Peter Lee, president of the San Francisco-based Pacific Business Group on Health, an alliance of employers that buys insurance for big companies. "This has to be seen as a wake-up call to policymakers and healthcare providers as it puts an increasing burden on an already frayed safety net."

Insurers blame doctors, hospitals and consumer demand for new medical technology for escalating rates.

"Prices are going up, especially for hospitalization," said Chris Ohman, president of the California Assn. of Insurers, a trade group.

But consumer advocates question why premium increases are needed as insurance industry profits rise.

"What the HMOs can't explain is why premiums are increasing twice as fast as hospital and physician costs," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights, a Santa Monica nonprofit.

Although Congress has passed some limited healthcare measures, such as a new Medicare prescription-drug benefit, efforts to revamp the system have failed. Meanwhile, the number of Americans without health insurance continues to grow, with the Census Bureau reporting last year that the number of Americans without coverage grew to a record 45 million.

...

I'm interested to know what Spabley thinks about the cost of corporate health benefits to employers.

I'm not good enough at micro to know what would fix it, but my first instinct would be to cap medical fees. That's probably unconstitutional and has some fatal flaw anyway that would backfire, but it sure sounds good, doesn't it?

I suppose big corporations could offset the empolyees' premium costs out of their HUGE CEO salaries, but I'm not going to hold my breath waiting on that one.

I think it's time this country start looking into national medical care.

The statistics are somewhat distorted by the fact that many people who do entry level jobs without health coverage either opt out because they are young and healthy or are covered by their parents.

That said, health care is a huge problem. The only real solution, imo, is consumer co-ops which enable individuals to pool purchasing problems and remove employers from the health care providing business. The fact that consumers were, for many years, shielded from health care costs, is now coming home to roost. (A similar thing is happening in the cost of higher education due to the availability of low cost, federally subidized school loans). When demand is backed by excessive funding, the price of the supply artificially inflates.

You do realize that the American pattern of businesses picking up health care was one of the many variables which hugely increased the overall standard of living and the thriving middle-class in this country during the late 40s, 50s and 60s.

Co-ops might be a good alternative, but in return, businesses should increase wages to pay enough for people to afford those premiums since in the past part of employee salaries has traditionally been the benefits.

I'd rather see taxes cut, and health care expenses be fully tax deductible, so that people can afford to pay for their own health care.

The median tax burden on a family of four has doubled, as a percent of income, since the 1950s. This is much more financially devastating than the cost of health insurance.

Ya, well, that's because they took corporate tax down from 87% of revenues to like %17. Now individuals who used to pay only %13 of U.S. revenues are responsible for the other %83.

If they shifted it back, they could lower everyone's personal taxes considerably.

I'm not good enough at micro to know what would fix it, but my first instinct would be to cap medical fees. That's probably unconstitutional and has some fatal flaw anyway that would backfire, but it sure sounds good, doesn't it?
It's a reasonable solution.
I suppose big corporations could offset the empolyees' premium costs out of their HUGE CEO salaries, but I'm not going to hold my breath waiting on that one.
The trick is to continue giving the good incentive to high paid officers. Sometimes it can be other things than salary.
I think it's time this country start looking into national medical care.
I'm not ready to agree with Spab on this one. :)

Nope. The corporate tax rate has absolutely nothing to do with it. As percentage of GDP, total government had grown tremendously to do the expansion of scope, pork, fraud and waste.

It's a reasonable solution.




Yeah. Capping fees is a Really Good Idea.

It worked for Gasoline in the 70s.

:rolleyes:

Taxes are revenue. If tax revenue is being collected in some balance between corporations and private citizens, then it should be obvious that by not taxing the corporations they have to make up the lack of revenue from individual citizens. That is why have high taxes right now, primarily.

Of course there is fraud, pork, and inefficiency and that should be cut too. I'm not arguing with that.

Do you think the government manages our money well?

(I'll be back tomorrow to see your answer.)

Good night, bo. I'll try to come up with a thought out post by late afternoon when I usually log in. It's late here too.

I don't think the government is managing our money well right now. With unlimited defense spending, generous tax cuts for the rich, never-ending war, out of control pork-barrel funding, fraud, and now this Katrina re-build many people have suggested that the BA is intentionally de-funding the government. As our debt reels out of control, our foreign creditors will demand belt tightening. The administration will create sufficient terror alerts to ensure that all future government funds not needed for debt repayment will go to defense. As such, with no social programs, US citizens wil have to depend on churches for needs previously handled by the government. This will give the mullahs the power they crave. Welcome to Iran.

I'm not good enough at micro to know what would fix it, but my first instinct would be to cap medical fees. That's probably unconstitutional and has some fatal flaw anyway that would backfire, but it sure sounds good, doesn't it?

I suppose big corporations could offset the empolyees' premium costs out of their HUGE CEO salaries, but I'm not going to hold my breath waiting on that one.

I think it's time this country start looking into national medical care.

You're confusing prices with costs. The bottom line is that health care COSTS are high. Someone has to pay those costs. Capping medical fees caps the PRICE of the care, but does nothing to address the cost. What follows next is inevitable. As true costs rise and prices cannot rise to cover them, the supply will shrink, as supplyers cannot continue supplying while losing money. In addition, the incentive to use only the care we actually need is reduced. We see this happen every time health care is nationalized. You see long waiting lines and lower quality of care as a result.

Price caps "feel" like a good idea, but as hadit pointed out, they WILL backfire and make the situation far worse than it already is.

National healthcare also "feels" like a good idea, but that will also backfire and make the situation far worse than it already is. Because turning the problem over to the government doesn't solve it. All it does is give decision-making authority over to beurocrats who don't give a crap whether you get better or not.

What needs to be done is to decrease the COST of healthcare, and also to increase the COMPETITION among insurers. If insurance companies' profit margins are growing out of control, that can only be because they don't have enough competition to keep them honest. When people have a choice of insurance providers, they will choose the one that gives them the most bang for their buck. And that is inevitably the one that has the lowest profit margins.

Also, there are a few things we can do to decrease the cost of healthcare. First of all, we could switch to a "loser pays" tort system for malpractice suits. That would drastically decrease the cost of malpractice insurance the doctors have all been forced to purchase. Second, we can eliminate the FDA and reform the parent laws so that presciption drugs are more available to people who need them. This will lower the price of drugs and increase the drug companies' revenues at the same time.

i work for Starbucks, and our health coverage is fantastic, and dirt cheap.

Do you think the government manages our money well?

(I'll be back tomorrow to see your answer.)

No.

However, I think it's interesting that Americans bitch about the one thing the government does (however grudgingly) that it should. Promoting the general welfare by helping the less fortunate through immunizations, housing, medical care and food.

Funny how that's the least expensive part of the budget. The massive pork, fraud and gifts to the wealthy in the form of corporate welfare and undeserved tax breaks are apparently fine with the public at large.

You want to shrink the government expenses considerably? Cut that off. You want to help the U.S. economy? Increase the amount for social services combating poverty out of a tiny portion of the savings you get from cutting off the rich pigs from the public trough.

No.

However, I think it's interesting that Americans bitch about the one thing the government does (however grudgingly) that it should. Promoting the general welfare by helping the less fortunate through immunizations, housing, medical care and food.

Wrong. The Government is not Daddy & Mommy. What it should do is to enforce the Constitution and protect national security. Enslaving some in order to subsidize the lifestyle of others is what Statist countries do - unfortunately, we are hurtling in that direction. You'll be happy - for about 30 seconds until you realize that the benefits you think you'll be getting are always targeted for someone "less fortunate" (although most are siphoned off by the pols and bureaucrats for themselves).

Funny how that's the least expensive part of the budget. The massive pork, fraud and gifts to the wealthy in the form of corporate welfare and undeserved tax breaks are apparently fine with the public at large.

Wrong. 41% of federal spending in 2004 was for SS, medicare and medicaid entitlements.

You want to shrink the government expenses considerably? Cut that off. You want to help the U.S. economy? Increase the amount for social services combating poverty out of a tiny portion of the savings you get from cutting off the rich pigs from the public trough.

^ Recipe for Decadent Socialist Decline - ala old Europe. Just ask France.