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Progressive Politics in Minnesota, the Nation, and the World

Exploding Cost of Healthcare

Category: US Politics
Posted: 04/04/05 14:19

By Jay H. Steele

There is a sobering article today in the Los Angeles Times about the numbers of middle class Americans who are becoming "insured poor." As health insurance costs explode, the percentage of their income consumed by insurance premiums is forcing them to make painful choices about whether to turn off their heat, drop their automobile insurance, take on more work, or join the growing ranks of the uninsured in America. Here are a few graphs from the article:

...As employees continue to absorb more of their healthcare costs, an increasing number of people ? even healthy ones ? are drastically altering their lives simply to hold on to their insurance. They are delaying homeownership, putting off saving for their children's education, or otherwise sacrificing their financial security to guard against a catastrophic medical bill.

Many people, especially lower- and middle-class workers and the chronically ill, are beginning to spend a once-unimaginable share of their income on health coverage. In some cases, health costs have become the single biggest expense in family budgets.

Between 2000 and 2004, the number of people spending more than 25% of their earnings on healthcare ? a figure normally associated with homeownership ? rose by nearly a fourth to 14.3 million people, according to Washington, D.C.-based Families USA, a healthcare advocacy group. Over the same period, according to the Kaiser Family Foundation, health premiums rose an average of 59%; federal data show the average employee's earnings rose 12.4%.

"Healthcare has always been expensive. But it's become more than that now," says Glenn Melnick, a Rand Corp. economist and a USC professor of healthcare finance. "How much of someone's income is too much to spend on healthcare? 10%? 30%?"

"More people are nearing a tipping point," says Mark Goldberg, senior vice president for policy at the National Coalition on Health Care, an organization of businesses, provider groups and pension funds that advocates for affordable healthcare. "Eventually, something has to give."

Like the house-rich, cash-poor who stretch their finances to pay for housing, those who are barely holding on to their coverage are increasingly known as the "insured poor." Eventually, many probably will lose the battle, joining the 45 million Americans without medical coverage.

The strain on employees and their families isn't likely to abate any time soon. Estimates are that health expenses will continue to increase three to four times as fast as salaries over the next several years.

I wonder how many Americans losing their health insurance it is going to take before we rise up and force the government to stop kissing up to the insurance companies and start serving the needs of individuals and families struggling to make ends meet. The middle class is shrinking fast and God help you if you are poor.
comments (1) permalink
04/05/05 21:32
It will take some time, but Americans will finally be forced to accept that single-payer health insurance is their only option. The current health insurance system is moving out of the reach of most Americans. One major illness and you are financially wiped out, and you will not be able to prevent the credit card companies from causing further devastation because you will not be able to file for bankruptsy to clear your remaining debts. How awful.


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