Saturday, June 25, 2011

The Long Slow Decline of Health Care

Earlier this month, a report was released "...suggesting that 30 percent of U.S. businesses will stop offering health care benefits to their employees after most of the provisions of the Affordable Care Act go into effect in 2014."   Worse yet, Wendell Potter photo above), author of the article about the report, former V.P corporate communications CIGNA, now whistle blower and consumer watchdog, predicts its eventual collapse. 

"When I began working in the insurance industry in 1989, the vast majority of Americans -- well over two-thirds of the population -- got their coverage through employers. Just about every year since then, the percentage has been declining."

Potter quotes a 2010 Gallup Poll reporting only 44.8% of American adults have insurance coverage through their employer.
My company's fiscal year insurance update was Thursday. We're taking a 19% increase in premiums for medical, 7% for dental,  with no improvement in coverage. Last year, we absorbed a 49% increase in medical and switch ed to a high deductible:  $3000  individual/$6000 family.  My Station Manager, in his mid-thirties, has two young children and is seriously contemplating not taking the insurance option this year because of the premiums.  His premiums and high deductible cost him more than his outlay for medical care.  Inotherwords, he's rolling the dice.

Our employer pays 50% of the premiums.  They contribute to our HSAs (healthcare savings accounts).  I know how lucky I am to have health insurance but I admit I took it for granted throughout my career.  I remember when health care was covered 100% by many employers in many categories of business.  

Fourteen years ago, my husband and I were self insured, living in California.  We had two small children, I'd taken a few years off, my husband had his own business.  At that time we had a $400 per month family premium with $750 deductible individual/$1500 family.  
The cost of health care has soared. The cost of medical care has gone up 136% since 1960 even when adjusted for inflation – from $8,100 in 1960 to $19,150 in 2010. Worse still, these numbers do not tell a complete story. Treating a sick child can be very expensive. High-tech medical advances have -while improving the quality of care – caused medical expenses to go through the roof. According a 2007 Congressional Budget Office report “about half of all growth in health care spending in the past several decades was associated with changes in medical care made possible by advances in technology.”  Skyrocketing Cost of Child Care: 1960 to Today
The other day I spoke with a close friend, also self-insured with a catastrophic policy.  She lives in Florida, is self employed.  She said when she receives treatment, she tells them she doesn't have insurance.  She has seen bills discounted by as much as two thirds!  She buys her prescriptions online from Canada.  What she pays for one month of Lipitor in the U.S. buys a 6 month prescription from Canada.

The Potter article concludes by commenting on the insurance industry's assault on small business,
"The reason more and more small employers are no longer offering coverage is because many of them have been "purged" by their insurance carriers. Insurers routinely "purge" employer customers they believe have become too much of a risk to profits. All it takes is one employee of a small business -- or the spouse or child of one employee -- to get critically ill for the company's insurer to jack up rates so high that the business owner has no choice but to drop coverage for everyone."
So, the insurance industry is having it both ways and our legislators do nothing.



injaynesworld said...

It's so fucking scary. I was covered by my union, the Writer's Guild, through 2006 and thank God because that was the year I broke my neck and ran up $95,000 in medical costs. My insurance was so good that I had a $300 deductible and $1,000 out of pocket. But I haven't worked in the industry for a few years and now I'm on my own with a plan that keeps going up and a deductible of $8,000. I'm just hoping I can stay healthy for the next three years until I can get Medicare -- if the Republicans don't destroy it.

Mildred said...

Absolutely disgraceful. But when health care comes up - as it has for decades - , it gets roundly defeated. Lobbying yes but also confusion and ambivalence on the part of voters.

As a nation, we might not be willing to take action until things fall apart.

mermaid gallery said...

Health care is a basic need and this scenario sounds a little scary. We are all covered here in Canada and it really makes life more secure. Making it only for the rich will destroy opportunity and hope for many. Insurance companies are afraid of lost profits. Together with Republicans, they may start another flood of refugees coming to Canada. The area where I live was a destination for draft dodgers at one time. That has helped us build a sensitive, intelligent, compassionate community in the middle of a very remote area.....all with health care!

California Girl said...

jayne: scary indeed, particularly for our children who are on my policy til they are 26 years old thanks to OBAMACARE. after that, their only hope is to find a job with health insurance which doesn't sound promising.

Mildred: it is a disgrace, a national disgrace. The voters don't understand the nuances. I doubt they even understand their own policies. Did you hear about the man who gave a bank teller a note he wanted to rob the bank for one dollar, then waited to be picked up by the police. He has a growth, cancerous I believe, and wanted health care while in prison. He's 59 years old.

mg: how hard is it for Americans to move to Canada now? my husband has talked about it for years and my thoughts were it might be quite difficult w/o a job. once upon a time it was so easy. my father did the majority of his business with pioneering Canadian broadcast companies. He always wanted to live there but Mother didn't want to leave the U.S.

Mama Zen said...

I'm terrified and completely unsure where the entire health care situation is going to end up. I'm afraid that the whole mess is so complicated that we are all going to be completely screwed before we even figure out what's happening (if we haven't been already).

Ruth said...

I really don't get why the people who oppose higher taxes that would give us the benefits of what Europeans and Canadians have don't see how much better it is. There are drawbacks, no doubt, but nothing like what you've pointed out here. It's terribly debilitating!

DJan said...

I just cannot believe that people are not realizing how behind the times our country is. Just across the border in Canada, everyone is covered. it might not be perfect, but it's so much better than what we have here it's isn't even worth comparing.

I had to wait until I turned 65 and became eligible for medicare to even contemplate retiring. My old employer turned to high deductible and it was very expensive.

Mildred said...

@California Girl The thing I find baffling is that many people have either experienced or witnessed a desperate situation brought on by a failed health care system but somehow this doesn't translate into the policy arena. I'm beginning to think that we need to reinstate civics and rhetoric classes to stand a fighting chance.

Linda said...

The legislators do nothing because they are supported by people with money; enough money to where the cost of their own health care is of no concern to them. Until people see this and care, the situation will become only worse.

Grandmother said...

I live in Italy now for 2 years and since I'm an elective resident, comprehensive health care is not free- it costs me 368 Euros- a year!
I haven't heard military spending on the same cutting board that health care and social security is on. How come?

California Girl said...

Mama Zen: referring to the stats laid out by former CIGNA VP in my article, we already are screwed. They take just over $500 per pay period out of my paycheck to cover my family medical. That doesn't include our dental which is another $58 or so. My company pays in just under 50% for premiums but it is a HUGE chunk of change. We are going into debt to pay all our bills thanks to health insurance.

Ruth: people don't understand the situation, the facts, the possible solutions. They believe sound bites. They believe the fear mongerers who are, basically, underwritten by lobbyists supporting their campaigns. Big business, big Pharma, Wall Street: they are in charge.

DJan: Right now it sounds as tho' the Dems are caving to the Repubs and Medicare benefits are going to be trimmed and Social Security eligibility will come at a later age.

Mildred: So true but refer to my response to Ruth. It's big business and we haven't figured out a successful way to beat them.

Linda: If the legislature and government employees and city employees and unions had to live with the health care situation the rest of us endure, I think there'd be massive policy changes.

Grandmother: That's about $525 annually? I'm paying that per pay period.

Susan said...

It scares the hell out of me what is happening to this country. How decent health care has become a luxury, and basically available only to the rich and the very poor (and who knows how long that will last with all the extreme budget cutting that the states are having to do). God help us all, because those godly and pious conservatives will take everything away from us, if they get the chance.

California Girl said...

Susan, it is indeed a luxury. My brother and his family have lived w/o it since he stopped working for a company that provided it. I would be in a wheel chair w/o coverage thanks to 2 hip replacements. My husband has had multiple surgeries on his back & knee. He's now fighting Lyme disease which is very debilitating.

Cozy in Texas said...

My monthly cost is $400 a month and a $10,000 deductible (for one person!). I remember when I first moved to the U.S.your employer paid 100% of premiums for you and your family.

EcoGrrl said...

great post and great comments. glad to land over here via ruth's blog. as an "HR person" going through benefits numbers and trying to fit it in budgets was always horrific, and for small businesses i worked at even worse, because one person's healthcare history could affect the entire company's mod rate (major operations etc) and drove our premiums up 60% - how sucky is that.

what upsets me especially right now is hearing about NFL players bitching about not having pensions or retiree healthcare. most of us don't have pensions or retiree healthcare. most of us don't choose an inherently violent sport either, and how they complain about all the head injuries? are they kidding? i looked it up and their average median salary is $1.4M in the NFL, more than many make in a LIFETIME. buck up assholes and buy insurance coverage. or - gasp - get a real job. maybe they should have actually gone to class when they played college football. it pisses me off that the news media is acting like 'aww poor NFL retirees' when people are busting their humps every day without coverage.

i've been without healthcare as a contractor for 9 months, and just finally got a 'real' job where i can go to the doctor. the note about the new plans having options is something i'm glad you pointed out because it's true, so few employers offer cafeteria plans anymore, you get what you get.

(can you see this is a vent for me?) :)


by Cole Scott