Current trends in paying for healthcare insurance
Crooks and Liars has us look at employers shifting the cost of health insurance to workers. In MA this shift will happen with public employees such as teachers probably soon as well.
Health care costs soar for insured workers presents another chart to gain a perspective when someone says health insurance premiums will rise with government intervention…ask more complex questions by remembering health care premiums are rising very rapidly anyway, and individuals will be bearing more of the costs of those premiums.
http://facts.kff.org/chart.aspx?ch=706
” employers shifting the cost of health insurance to workers.”
Eh?
It’s pretty standard analysis that employees already pay the costs of their health care. Employers have one big pot of money which they mark “what we’re willing to pay the workers”. Whether that pot goes directly in wages, indirectly in health care, indirectly as employer social seocurity contributions, whatever, doesn’t make any difference to the company.
Sure, tax treatments can vary how the workers would like that pot to be apportioned but to employers it’s all the same thing.
It will be interesting to see what the U.S. Government plans to do if, for whatever reasons, healthcare insurance premiums continue to increase over the next ten years at or near previously projected rates of increase or more than anticipated with passage of the healthcare bill.
In the long run, the standard analysis is probably correct. In the shorter term, though, information and search costs, inertia, social contacts and the like all militate against workers responding to a sudden reduction in real, take-home pay by finding other work. A worker who signs on for a certain level of pay and benefits can end up with reduced pay if the cost of the benefit is shifted. Shifting the explicit cost of benefits more heavily to workers is an effective reduction in pay. If the employer is careful about which benefits to cut back and by how much, the frog can be boiled pretty thoroughly without much backlash.
I don’t understand why we can’t model our system after one of the 40+ countries that have better systems than ours, get better results, and pay signifigantly less to cover their whole population. Our system and lack of willingness to change to something better is pathetic.
I think this is a necessary step in decreasing the overall cost of healthcare. My company recently renewed coverage and kept our premium amounts the same by increasing co-pays and deductibles. This means employees of my company will ration their own health care. I don’t think my company is evil for doing this, they have a bottom line just like I do – and if more companies put the ball in your court for how much you spend on your healthcare, it WILL become cheaper.
DG,
There aren’t better, your just being told they are better to fulfill a political agenda. If they were truley a reasonable solution to Health Care and Health Care costs that meets or is better than the American System, this country would have shifted to a more Socialist System many, many years back.
If more people are covered then health care is rationed…You can’t sqeeze blood from a stone.
Just because your being told they spend less money doesn’t matter. Do they have an immigration problem? What is the difference in population? What is the doctor to patient ratio? What is the standard practices laws and guidelines in comparison? Many other factors involved…..
Your not seeing…or maybe I should say, you weren’t seeing doctors leave the United States to work abroad in their own practices, but the influx of doctors from the rest of the world come here…Why?
Becareful what you wish for, becuase in a couple of years your gonna pay more for less, who will you blame?
This country has in the past and continues in the present and will continue in the future to shift to a more socialist medical system because it does work better. The VA. Tricare. Medicare. Medicaid. CHIP. The medicare prescription drug benefit. The subsidies in the latest reform.
Even republicans, when the actually want to improve healthcare for some favored constituency such as seniors or the military, go for socialism. Medicare prescription drug benefits. VA funding. Tricare.
Rugged libertarian idiocy is for other people. The poor. Immigrants. Children. The hated ‘other’ in all its incarnations.
Modern republicans with their deeply ideological corruption tend to do socalism in unusually inefficient ways in order to direct some of the money to their paymasters, but deep down they know that it is the only way to actually improve the situation which is why they do it again and again. Six years of dominating all three branches of the federal government and all they do for healthcare is socialist prescription drugs for the elderly and make medicare less efficient by privatising part of its administration at higher cost.
It isn’t pathetic, it is disgusting.
Jeff,
That is why they lost, and will continue to lose until there is two distinct (equal but opposite) political parties. Republicans are nothing more than historical Democrats, and Democratics have become radical collectivists.
There is nothing wrong with needing to go a little socialist in certain areas, but that not whats going on..The american people have been bamboozled…the corporations and the politicians are moving to control behavior not solving health care issues.
Cost alone doesn’t tell the story of Socialized Medicine, and I know no serious person who believes that if the United States moves into a Single Payer Socialized System that more Health Care will be provided for more people at a lower cost and maintian the standard and type of Health Care American deserve and are used to.
Why is your employer’s responsibiliity to provide you with health insurance? This system is a relic from WWII where employers offered a health insurance benefit to avoid the war-time wage controls then in effect. As costs keep going up, it becomes a drag on revenue so companies are passing on the extra costs in the form of increased premiums and co-pays. How is that evil?
Most all “insurance” schemes amount to some kind of subsidity of sick by the healthy and the poor by the not poor. In reality they are not insurance because the premium often does not reflect the risk. One way or another, the Pareto Principle will assert it self, 20% of the people will be responsible for 80% of the costs (this might need an age adustment for sick costs). Coping with this fact of life is the major political problem.
Why is your employer’s responsibiliity to provide you with health insurance? This system is a relic from WWII where employers offered a health insurance benefit to avoid the war-time wage controls then in effect. As costs keep going up, it becomes a drag on revenue so companies are passing on the extra costs in the form of increased premiums and co-pays. How is that evil?
Most all “insurance” schemes amount to some kind of subsidity of sick by the healthy and the poor by the not poor. In reality they are not insurance because the premium often does not reflect the risk. One way or another, the Pareto Principle will assert it self, 20% of the people will be responsible for 80% of the costs (this might need an age adustment for sick costs). Coping with this fact of life is the major political problem.
Why is your employer’s responsibiliity to provide you with health insurance? This system is a relic from WWII where employers offered a health insurance benefit to avoid the war-time wage controls then in effect. As costs keep going up, it becomes a drag on revenue so companies are passing on the extra costs in the form of increased premiums and co-pays. How is that evil?
Most all “insurance” schemes amount to some kind of subsidity of sick by the healthy and the poor by the not poor. In reality they are not insurance because the premium often does not reflect the risk. One way or another, the Pareto Principle will assert it self, 20% of the people will be responsible for 80% of the costs (this might need an age adustment for sick costs). Coping with this fact of life is the major political problem.
Why is your employer’s responsibiliity to provide you with health insurance? This system is a relic from WWII where employers offered a health insurance benefit to avoid the war-time wage controls then in effect. As costs keep going up, it becomes a drag on revenue so companies are passing on the extra costs in the form of increased premiums and co-pays. How is that evil?
Most all “insurance” schemes amount to some kind of subsidity of sick by the healthy and the poor by the not poor. In reality they are not insurance because the premium often does not reflect the risk. One way or another, the Pareto Principle will assert it self, 20% of the people will be responsible for 80% of the costs (this might need an age adustment for sick costs). Coping with this fact of life is the major political problem.
Why is your employer’s responsibiliity to provide you with health insurance? This system is a relic from WWII where employers offered a health insurance benefit to avoid the war-time wage controls then in effect. As costs keep going up, it becomes a drag on revenue so companies are passing on the extra costs in the form of increased premiums and co-pays. How is that evil?
Most all “insurance” schemes amount to some kind of subsidity of sick by the healthy and the poor by the not poor. In reality they are not insurance because the premium often does not reflect the risk. One way or another, the Pareto Principle will assert it self, 20% of the people will be responsible for 80% of the costs (this might need an age adustment for sick costs). Coping with this fact of life is the major political problem.
Why is your employer’s responsibiliity to provide you with health insurance? This system is a relic from WWII where employers offered a health insurance benefit to avoid the war-time wage controls then in effect. As costs keep going up, it becomes a drag on revenue so companies are passing on the extra costs in the form of increased premiums and co-pays. How is that evil?
Most all “insurance” schemes amount to some kind of subsidity of sick by the healthy and the poor by the not poor. In reality they are not insurance because the premium often does not reflect the risk. One way or another, the Pareto Principle will assert it self, 20% of the people will be responsible for 80% of the costs (this might need an age adustment for sick costs). Coping with this fact of life is the major political problem.
On a somewhat related topic – one of my peeves with the current system is being forced to choose between multiple competing plans offered by my Fortune 500 technology employer. Every October I am required to choose between multiple offerings, never less than 3 plans that each have different levels of monthly contribution (including 0 for a very basic plan that has relatively high deductables and co-pays).
So on a yearly basis I’m supposed to somehow guess (gamble is a better word) how much health care I will need in the coming year. And guess what – because of accidents and whatnot I’m actually very bad at predicting my yearly healthcare requirements. After getting hosed for a few years on the no monthly contribution plan that required me to fork out 20% copays for in-network care (one ER incident involved a nasty cut from a license plate – 9 stitches and $1200 in copays, another year I dislocated a shoulder in another clumsy accident, that one was about $1500 by the time I covered the needed physical therapy for recovery).
Some might say “Great – more choice and control for you!” Phooey. When I think of my experience multiplied by hundreds of thousands of other US based employees I think what a waste of attention and effort by everyone trying to guess how best to game the “system” (not sure it should be called that).
I often wonder if the nay-sayers of single payer ever bother considering these indirect costs – if each employee only spent 2 hours evaluating the options (some people with specific needs might have to spend longer reading mind-numbing fine print of each plan to figure out which one works better) that is hundreds of thousands of man hours spent yearly exercising a “choice” that’s not much more useful than picking lotto numbers. Hours that are not spend fixing defects, designing next generation systems, engaging with customers and clients, or solving problems. dumb dumb dumb
Meant to indicate at end of 2nd paragraph that after I hosed myself for a few years trying to get by with the basic “free” plan I have “wised up” and now contribute about $60/month ($720 a year before any copays) to a relatively deluxe plan that has minimal copays for most care. And of course since upgrading my insurance – voila! – My luck is better and I have only needed routine checkups and screenings which are fully covered by all the plans with no copays. Go figure.
Sam:
How will it become cheaper? Are you going to negotiate the cost with your doctor when you are ill? Are you going to skip going to the doctor? Are you going to not buy the expensive meds? If the doctor says you need the care, what will you do?
Rationing by the cost of the service and the healthcare service is what we have now and it doesn’t work. The ball in your court just makes you skip the treatment.
A. Zarkov:
Actually this healthcare system is a relic of the UAW negotiations when car companies granted heathcare in lieu of wage increases. It makes good sense to have a healthy work force rather than one that is sickly as the cost of recruiting and training exceeds the cost of healthcare.
Actually a public option would be far better and eliminate the insurance companies all together. In case you haven’t figured it out yet, age is not the #1 cause of healthcare cost increases. Innovation certainly is the #1 culprit, those meds, procedures, and equip which have a high cost as compared beenfit.
Zarkov
stuttering?
amateur:
Welcome to the healthcare club in which you are an obligatory member who has no control.
Right. But here’s a pretend steering wheel where you can imagine you have control of your costs.
End up spending more than you thought? “You Chose Poorly, go back 5 spaces”
Right – I probably don’t need to spend on that expensive cancer screening because it’s not that likely I have cancer. Of course if I end up unlucky enough to contract it you’ll be able to ration the chemo too – why not let the patients with an appetite for risk see if they go into remission on their own?
Sounds a little like: “Indiana Jones and the Last Crusade.”
When picking the Holy Grail makes sure you pick the correct one.
“He Chose Poorly”
Tim:
Gonna disagee a bit here. It does make a difference where that money goes as it is a deduction for the company against gross profit. I am not sure if the Copration SS portion is a deduction but, the income of the employee, the healthcare plan, and other fringe benefits are deductible. In any case those bennies are subsidized by the government.
If the tax rate is high, the deduction for employees has more effect than if the tax rate is low. Since corporate taxes are dropping, it may be part of the impetus to move more cost to the employee. There is almost an argument for higher corporate tax rates.
Companies always figure the net income generated by the employee less the expense of the employee from gross income before hiring the employee. Each employee is supposed to generate a profit.