Numbers That Matter

[babylonsister]

http://www.mydd.com/story/2009/9/15/22853/1453

Numbers That Matter

by Charles Lemos, Tue Sep 15, 2009 at 10:08:53 PM EST


Dr. Drew Altman of the Henry J. Kaiser Family Foundation today published a very simple and must-read one page summary of their annual benchmark survey of employer health coverage and costs. The summary highlights two numbers: the average cost of a family health insurance policy and the astoundingly large differential between between increases in health insurance premiums and the overall inflation rate.

Two numbers jumped off the pages.

The first number was the average cost of a family health insurance policy in 2009: $13,375. To put that number in context, if you are an employer, you can hire an employee at the minimum wage for about $15,000 per year. If you are a consumer, you can rent an average two-bedroom apartment nationwide for $11,136 per year (though it is quite a bit more here in Menlo Park, California where our Foundation is based). You can also buy a new Chevy Aveo for $12,000, and it gets 35 miles per gallon on the highway.

The other result that jumped off the page was the stark contrast between increases in health insurance premiums and overall inflation in the general economy. Premiums went up 5% and prices overall fell 0.7% (mainly driven by a big drop-off in energy prices).

The 5% increase we found in premiums is moderate by long-term historical standards. For example, two different times during the last decade premiums increased by 13% a year, in 2002 and 2003. This year's increase continues a multi-year period of relative moderation in premium increases. Still, over the last ten years premiums have increased by 131%, while wages have grown 38% and inflation has grown 28%. Consider this: If people (and businesses) are as concerned as they are now about rising health care costs in a period when they are actually moderating, how much more concerned will they be when rates of increase return to historic averages?

It's a fair question and the Kaiser Family Foundation goes on to do some simple arithmetic.

Let's do some very simple arithmetic. Start with a fairly conservative assumption: If we assume that premium increases over the next ten years will average what they did over the last five (about 6.1% per year), the average premium for a family policy in 2019 will be $24,180. That's a big number. On the other hand, if we assume increases revert to the average of the last ten years--an average annual increase of about 8.7% and a very plausible scenario--premiums in 2019 will average a whopping $30,803, a very scary number.

Indeed, these numbers are sobering and reflect a broken health care system that threatens to subsume the American economy and thus American living standards. Healthcare costs in the United States consume one-sixth of GDP. It is imperative that we bring this number in line with other advanced economies who are spending one-tenth of their GDP on healthcare providing universal coverage and obtaining better life metrics.

[KharmaTrain]

1. A New Phase In The Debate About To Begin...

Seems more and more likely that reconciliation will be the game. Dr. Dean outlined it a couple weeks ago how this would play out. Reid (or more likely Schumer, Durbin & Dodd) will force all the Democrats to force a party line vote on cloture with the compromise to all those with "reservations" to vote up or down on ammendments and the final bill (which will require only 51 to pass). The other day I read a report where Schumer felt he had 51 for public option already onboard.

The game now won't be IF, it'll be WHAT is in a final bill. Too much focus has been put on the "Gang of Six" as there are four other bills that are out there and the reconciliation process is still ahead. First the Senate will hash it out...this will be the big cloture vote to get it into the next phase...reconciliaton and then conference with the House on a final bill. Yep, this could be months down the road still, but the whole debate will now turn on reigning in the costs through reigning in the insurance companies.

The Insurance industry has shot their wad. Millions spent on advertising and tea bagging haven't really moved the polls in their favor. President Obama regained the high ground last week and now the momentum is toward restrictions on those companies and the public option. For all their circle jerking, the Baucus "bill" is the one that is DOA.

[babylonsister]

2. Baucus' bill is DOA, as it should be. The rethugs won't sign off on it,

and hopefully Rockefeller will have started a groundswell for Dems to distance themselves from it.

:hi:

[KharmaTrain]

3. Listen To DiFi...

A couple weeks ago I recall hearing her say she though a Public Option wouldn't be in a final bill. Last week she was singing its praises. Methinks the fence-leaners are being pushed hard. I was very happy to hear Senator Rockafeller...who also was on the fence, come out so strongly in favor recently. Seems like the combination of Senator Kennedy's passing and "inside baseball" by President Obama, Senator Schumer and VP Biden are at work here.

[demwing]

4. And some DUers scoffed when Obama pulled Biden up to bat for Health Care

Biden is the Senate, pure and simple