The insured should be very, very afraid
Too Great A Burden: America’s Families at Risk
Families USA
December 2007
Health care costs have become a growing burden for America’s families, as premiums and out-of-pocket expenses continue to rise at alarming rates.
Families USA commissioned The Lewin Group to analyze data from the U.S. Department of Health and Human Services and the Census Bureau.
Millions of Insured Americans Are Affected
- More than four out of five people (82.4 percent) in families spending more than 10 percent of their pre-tax income on health care costs are insured.
- 50.7 million non-elderly Americans with insurance are in families that will spend more than 10 percent of their pre-tax income on health care costs in 2008.
- More than three out of four people (75.8 percent) in families spending more than 25 percent of their pre-tax income on health care costs are insured.
- 13.5 million Americans with insurance are in families that will spend more than 25 percent of their pre-tax income on health care costs in 2008.
http://www.familiesusa.org/assets/pdfs/too-great-a-burden.pdf
Comment:
By Don McCanne, MD
For health reform advocates, this report is well worth downloading. It confirms not only the enormity of the financial burdens of health care, but also the alarming rate of increase in those burdens.
Since most reform proposals would build on our private insurance system, the numbers above were extracted from this report to demonstrate just how ineffective insurance is in protecting the finances of non-elderly Americans who are fortunate enough to be insured.
I won’t repeat the numbers here, but read them again. Now read them once more, and absorb them.
Our insurance industry has failed miserably to protect us from financial hardship and even personal bankruptcy. No amount of insurer regulation can reverse these trends because the private insurance industry cannot provide insurance products with premiums plus out-of-pocket expenses that have a stop-loss of 10 percent of income. More than fifty million non-elderly, insured Americans can already attest to that.
The neoliberal view expressed by the leading Democratic candidates for president is that those healthy individuals who would rather keep the insurance they have should be able to. But those individuals need to understand that insurance that works well while you’re healthy and don’t need it, has not worked for fifty million others in our nation. Over a lifetime, those odds can catch up with almost everyone.
So why can other nations such as Switzerland and the Netherlands rely on private plans (albeit highly regulated) to finance health care? The answer is simple. Over $2.2 trillion is what we’re already spending on health care. On a pro rata basis, that is $7500 per person. That requires an income of over $75,000 to limit an individual’s pro rata share to under 10 percent of income. For a family of four, an income of $300,000 would be required.
Health care is too expensive. Segregated private insurance risk pools no longer work. If we want everyone to have affordable access to health care, we are going to have to establish a universal risk pool, and ask the wealthy to step up and return to us, in the form of health care, just a small amount (for them) of the great rewards they have received from our entrepreneurial system. If they are not willing to do that (by supporting health care financing through progressive taxes) then we are going to have to continue to sit back and watch people suffer needlessly and die prematurely. The rest of us simply do not have the funds to prevent that.