Tweet
Health insurance premiums for a typical employer-provided family policy grew by an incredible 9 percent this year according to a new Kaiser Family Foundation study. Not only have premiums increased for employers, but the employee cost sharing has gone up as well.
Compared to only a few years ago, there has been a big increase in high deductible plans, co-pays and co-insurance. In 2006, 10 percent of workers with employer insurance had a deductible as high as $1,000 for single coverage; now 31 percent face such deductibles.
The first chart from the study shows how health insurance premium increases have far outpaced worker earnings. The second shows how more and more workers confront high deductibles. From KFF:
Charts like these should put to death the zombie myth that the way to control America’s incredible health care cost growth is to just give individuals more “skin in the game.” The idea that making Americans pay more out of pocket for their health care will reduce overall health care spending is false, and pursing it will be a complete failure. The idea is based on a childish, simplistic belief that a “free market” functions well in health care and health insurance; it has no basis is reality. But sadly this notion is still championed by free market economists, including prominent advisers to President Obama.
As the study and its graphs show, we have been dramatically increasing the amount of “skin” individuals have in the game for years, yet our health care costs continue to grow rapidly. Our health care costs also rise faster than those in the rest of the first world even though we tend to pay far more out of pocket. There is no reason to believe further cost shifting to consumers/patients in the future will end up controlling our out of control health care costs.
This is why I don’t have much faith that the Affordable Care Act will control costs. Many of the so called “cost saving” ideas, from the exchanges to the excise tax, are supposed to magically reduce health care costs by farther increasing skin in the game and relying on “free markets.” The evidence shows that doesn’t work.
37 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL Action
Great post. Thx, Jon Walker, for your tireless clarity on this issue.
We are so f*cked.
Great job, Jon, once again. Too bad Neolibs like Obama don’t get that the all-powerful market just doesn’t work for everything.
The more people who don’t have healthcare, the more expensive it will be for those who do.
Our capitalistic notion of our society/economy denies the truth of cooperation and propagandize the myth of competition as the best form of allocating scarce resources. This myth is ingrained in us sometime after childhood. We are taught to share as children but before we are adults we learn to horde for ourselves and think in terms of self interest only. We as a society will continue to believe this myth, even as our environment deteriorates to the point where it won’t be surprising that you will see people walking around with small tanks of oxygen to breath clean air as we do today to buy a bottle of clean water to drink today at a convenience store.
Markets properly exist to serve humanity, not the other way around. Otherwise you invariably end up with a Rule of Greshman’s Law race to the bottom (which, of course, enriches some people at the expense of everyone else).
“propagandize the myth of competition as the best form of allocating scarce resources.”
___
All “competitions” have to have rules. Again, “markets properly exist to serve humanity, not the other way around.” People who deny that implicitly have to believe in “Might Makes Right,” that the powerful get to set the rules to ensure their advantage.
Beg to differ. Markets exist to serve PTB, not the other way around. (Quibbling, I know.)
Assuming facts not in evidence, mainly that resources are scarce.
As an economist brainwashed in school to that particular “myth” I’ve been a long long time a learning that resources are anything but scarce, and the myth of competition is only a red herring to make people think there’s something magical about “market” or “competition” or “scarcity.”
Our skin, bones, hearts, bladders, kidneys and all of our various and sundry organs, have been in the game from the get-go. We are profit centers to the medical industry. Paying our claims is a loss to the insurance industry. The solution to the health care question being promoted by practically everybody is to bancrupt us and then let us die.
Needless to say, as a tenured MIT prof, Jonathan Gruber doesn’t have any skin in the game.
Are you saying I implicitly believe that “might makes right”? I don’t. Competition is better left for games and sports where the rules are applied evenly on all players and all the players start the game on equal footing. Life is not that way, no matter what economist will tell you. Governing and making society better is not a game or sport if you believe that human life is more important than the pursuit of money and above all human rights and basic dignity is more important than some economic theory written up somewhere.
Global leadership has failed in this regard because of the myth of competition.
Missing snark tag?
And we can’t even profit by selling our own organs. The only entities allowed to profit from our organs is big biz. We are forced to give them up for nothing.
It wasn’t proffered as a scientific hypothesis, but rather as a moral argument. There’s no empirical way to “prove” it directly.
LOL. Give me a real world example of your hypothetical case.
My take on games & sports (strictly from the POV of someone who finds them one of the most boring time occupiers of humans) is that they were devised by the PTB to distract the masses, like lions & gladiators.
“Are you saying I implicitly believe that “might makes right”?”
___
Of course not. It’s a generalized moral argument. Wasn’t directed at you personally.
But, do you or do you not agree that markets properly exist to serve humanity? In the aggregate.
I simply say that the sustainable advancement of human civilization requires something other than zero-sum or negative-sum games (which, obviously, have “winners” short-term).
Never played a board game before?
Well, there is evidence. Cite me a resource which is scarce, or an instance when competition resulted in a hypothetical “good” outcome for real people. Resources are, of course, scarce for the poor & middle class, which is the hidden agenda of econ “schooling.” Not so scarce for the 1%ers.
Now competition between factions among the 1%ers is fierce. After all, the spoils all go to the faction that gets to the top of the mountain, at the expense of all the other factions.
Thus O’s PhRMA/insurance faction fights relentlessly for their rewards for supporting him at the top ‘o the mountain.
LOL. Just gave away 14 board (bored?) games that I was never inneressed in to begin with but kept kiddies occupied when they were little. Last I played was prolly 2 decades ago.
No I do not believe that markets exist to serve humanity. Capitalism serves those who own the capital. Thus the rules/laws are slanted in their favor. I think we may have the same belief on what the future humanity should be like, however I don’t think capitalism will get us there.
The glaring problem of capitalism is poverty. If competition even came close serving humanity than there really shouldn’t be any starving people in the world. Go to any U.S. supermarket or restaurant where tons of food is wasted everyday and yet people all across the world go without why because it isn’t profitable to feed them.
Not unique to capitalism. Communism did not feed starving peeps either. Diff system, diff reasoning. Commonality is that PTB in whatever political or econ sys hate real peeps and do their best to make sure the real peeps are oppressed.
In other words communism or socialism was never really tried. Authoritarian systems where put in place with different names, just like America and our so- called democracy.
Just labels; no substance behind any of them: capitalism, communism.
Socialism not so much. As brainwashed as I was by my econ schooling, I always thought that a “mixed” system would work out better than the alternatives. Western Europe, as near as I can tell, came a little closer than other countries.
Extending Zinn’s reasoning beyond where he took it, U.S. centered, European PTB recognized that giving just enough socialist crumbs to real peeps would preserve the real system for PTB. Mainstreaming of rightwing nutcases in Europe like Sarkozy & Merkel suggests that European PTB never gave up, like U.S.ian PTB, on recapturing their full powers of the 19th C. (Or feudal times, who knows how grand their schemes are.)
The ACA was never meant to control costs. That was obvious from the beginning. All the real cost saving measures were quickly removed from the legislation and Michigan’s Senator Levin played a big role by voting against one of the few that had a chance to make it–the Drug Re-Importation Bill.Ironically, he had championed the same bill vociferously when Dubya was prez. Dems–no better than Repubs.
Yeppers.
ACA is a sick joke — just like the POTUS.
Speaking of skin in the game, is this the same Kaiser that is the leader in managed care in California? If so, they are in direct competition with the employer provided policies they are studying here.
It is going to be really interesting if the ACA is upheld by the supremes. They say it will insure millions but there will be millions who can’t afford to buy the required insurance. And, if they can on day one, in five years they will not. How in the world can you enforce people to buy something they cannot afford?
Maybe the best could happen is the supremes declare the mandate out of bounds and then we repeal the whole thing and try to get it right next time around. More and more we are seeing that private health care insurance for everyone just won’t work.
It’s not a failure – it’s working out perfectly…we’re being skinned alive. The Obama administration did all they could to not control costs, but making sure that we had to pay through the nose either directly with the mandate or indirectly with the subsidies.
“And, if they can on day one, in five years they will not. How in the world can you enforce people to buy something they cannot afford?”
Either:
A) The increasing cost of the subsidies will be used to cut the social safety net (if it hasn’t been done by then already)
B) The subsidies will be cut in the name of deficit reduction, so people either get taxed for not buying unaffordable insurance or they lose much of their income to paying for over-priced ineffective insurance.
Well, should we be joining with the thugs to repeal this thing?
Yep,bluedot,if you wish to frame it as us against the thugs,I’m pro-thug,I hope to never become such a reactionary simpleton that my thinking can be polarized by others,especially the dem/pub camps,
I opposed Obamacare from the very beginning – actually all the backroom dealing is what originally brought me to FDL. I opposed the mandate before it ever become law.
“No I do not believe that markets exist to serve humanity. Capitalism serves those who own the capital.”
___
Don’t misrepresent what I wrote.
According to this article, the health insurance industry reclassifies administrative expenses as medical expenses. Furthermore, the health insurance industry has no antitrust provisions to abide by, and the health care law does not address this.
So, cost controls? Yeah right. Setting a minimum MLR means absolutely nothing when the industry can just spend more on “administration” and chalk it up to “the rising costs of health care”.
I’ve opposed the health care law, and have regretted my vote for Obama, ever since the public option was removed and Obama continued to endorse the mandate. I should have known better, sooner.
Our leaders are idiots. Too much skin in the game means people will put off care until problems are worse and harder to deal with. As much as my insurance company might not like to pay for an ER visit when my not so little little guy was coughing badly, I probably ended up saving them money from treating a child hospitalized for pneumonia.
The whole entire idea that people just vist physicians and undergo testing for no reason is whack. Even with a $20 co pay I can think of a million things I’d rather do than sit in an office waiting on someone to tell me that they may or may not have found something wrong with me and that they may or may not know why it occurred and that they know how to treat it. I can’t imagine the thoughts that goes through the head of someone who has to fork out $1000(and frankly if it comes to this as a deductible I’ll go naked first because I’ll be darned if I’ll be forking out thousands in premiums and my spouse’s employee will be forking out thousands in premiums and I still have to come up with a grand before the insurance company pays a cent.)
As it stands this time next year I have a five hundred dollar co pay for hospitalisation. I have a 5% co pay on anything other than medication or office visits up to $1000 for person and $2000 per family(testing). We have to get pre authorization for certain medications like imitrex and for any tests like mri or ultrasound. My co pay for ER increases to $75 dollars(and they are the only ones who don’t need preauthoriztion for testing.)Oh and have I mentioned this is a so called “cadillac plan.” Swell huh?
Employees pay for all their health insurance (always have)
Your first graph shows that very clearly.
Who is paying is not the problem. The problem is no competition and the runaway costs.
Because employees have been duped into thinking that their employer is paying for some or all of the insurnace premium, they are not as aware of the rising costs. If employees had to pay the full cost of premiums every month on an invoice basis (rather than hidden in their compensation), there would be a hue and cry for more affordable options, more competition, price shopping doctors, hospitals, clinics, services, etc.