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Stones & Bones: health care / volume 11 number 1, January 2009 DOSE OF REALITY It’s a sad fact that, in large part because of increasing health care costs, Alaska families are financially worse off than they were eight years ago—and that is not even taking into account the recent rise in fuel costs or the recent huge decline in the value of investments. Overall, it’s not a very pretty picture. Health insurance premiums for Alaskans increased 73.6 percent from 2000 to 2007. That increase is 5.7 times higher than the rise in median salaries, and to make matters even worse, out-of-pocket costs for health care not covered by health insurance also substantially increased. This unhappy information comes from a study published in September 2008 by Families USA.* The study details cost increases for both employer-based group health insurance and for families who buy insurance in the individual market. According to the study, the cost of family health insurance premiums rose from $7,456 in 2000 to $12,942 in 2007. A family buying that coverage on the individual market had to bear the full brunt of this increase, but if the insurance was purchased by an employer then both the employer and the worker shared in the increase, and the employer’s increased cost was proportionately higher. On average, the employer’s portion of the premium increased from $5,484 to $9,901, an increase of 80 percent. By comparison, the employee’s share rose from $1,972 to $3,041, a lesser increase of 54 percent. During this same period, the median Alaska worker earnings increased from $27,373 in 2000 to $30,931 in 2008, an increase of 13 percent. However, real earnings—the earnings adjusted for inflation—actually declined nationally (and presumably also in Alaska) by about 7 percent. Consequently, Alaska families are seeing a substantial rise in the proportion of their income going to pay for health insurance and health care. Employers are responding to this change by dropping health insurance altogether or asking their workers to take on an increasing share of the cost. That action is driving more Alaska families into the ranks of the uninsured and underinsured, an unhappy state of affairs. The public is starting to understand that the situation cannot continue in this direction, but only a portion of the public comprehends that the trend can be reversed by instituting a single-payer health care system. The health insurance industry is ahead of the public on this issue, and is very worried that increasing health insurance costs might actually drive the country into establishing a single-payer system that would put the industry out of business. The industry has reason to be worried, as that is exactly what HR 676 calls for. This is the bill in the House of Representatives now sponsored by 93 members and gaining increasing support by many organizations around the country. Hoping to fight any reform disadvantageous to itself, the health insurance industry is going on the offensive. Its trade organization, America’s Health Insurance Plans (formerly the Health insurance Association of America), recently admitted that its members refuse to insure the one in ten Americans having the highest health care costs, and, even so, that the policies it sells directly on the individual market are out of reach of Americans having only moderate income.† Having made these admissions, the organization this month announced a self-seeking health care reform proposal designed to maintain the industry in the profitable lifestyle to which it has become accustomed.** The gist of the proposal is that the industry will agree to insure everybody—even those with pre-existing health conditions, but that the American taxpayer will pick up a big portion of the bill. In short, it is a bail-out akin to that now being given to the financial and auto industries. However, this one will not be a one-time grant, but rather a subsidy that will last forever. Instead of paying for health care directly, the taxpayer will funnel heath care monies through the for-profit private insurance companies who will siphon off about 30 percent to pay for shareholder profits and an administrative bureaucracy that dictates who gets what health care and how much. The industry is hoping to gain traction from the element of American society that believes that unregulated free enterprise best supplies society’s needs, and that includes the need for health care. Government should stay out of it altogether, according to this neoconservative view. The government should neither regulate private enterprise nor be involved in the delivery of health care. Its role should be restricted to paying the bills, and let’s ignore the fact that when the government pays the bill, it is really the taxpayer who is paying. To put it another way, and making use of a new phrase we have been hearing lately, let’s “socialize the losses, and privatize the profits.” It will be interesting to see what the current mood for health care reform leads to. Will those coming into public office have the fortitude to enact meaningful reform—a system of government-operated universal health care—or will they buckle in to the desires of the powerful health insurance and pharmaceutical industries who prefer to maintain their profitable status quo? If our leaders do buckle, we can expect health insurance and health care costs to continue to rise, in Alaska and nationwide. * available on line at http://acpp.info/wp-content/uploads/2008/10/ak-premiums-vs-pay-update-emb.pdf † See http://www.ahip.org/content/pressrelease.aspx?docid=25068 ** See it at: http://www.americanhealthsolution.org/assets/Uploads/healthcarereformproposal.pdf
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