The most recent report on employer health insurance from the Kaiser Family Foundation is full of disturbing trends that spell increasing trouble for the US health care system.
"Premiums for family health coverage have more than doubled since 1999. Employer-sponsored health insurance premiums have risen from $5,791 in 1999 to $12,680 in 2008."
We haven't been hearing much about health care reform lately, given the cascading crisis in the financial markets, and yet the two are intrinsically linked. Jobless rates are up, incomes are down, and health insurance premiums have doubled under George W. Bush!
And under Senator McCain’s plan, it is estimated that your costs WILL DOUBLE AGAIN!
McCain's plan will tax employer provided health care benefits, making premiums even more expensive for the American people and making it likely that more employers will drop coverage all together for their workers, dumping 20 million Americans into the ranks of the uninsured or into a private plan in the individual market.
More below the fold:
When George W. Bush was first elected President, the average cost of an employer health insurance premium for a family of 4 was under $6,000 per year.
The latest figures, published by the Kaiser Family Foundation, estimate that in 2008, the price tag for the same health insurance has more than doubled to $12,680 a year, or more than $1,050 per month for a family of 4! KFF Report on Employer Health Benefits, 2008
For the individual employee, the cost increases for employer health insurance have also skyrocketed from just under $2,200 in annual premiums in 1999 to more than $4,700 in 2008.
And remember, these are the total costs under EMPLOYER or GROUP insurance.
The prices for these same policies in the individual private market are significantly higher and unlike group insurance, the insurance companies in the private individual market can turn anyone down for insurance for any reason (including pre-existing conditions) and can charge as much as they want to cover you, with NO protections or guarantees that you will be able to find any health insurance, let alone affordable insurance.
John McCain wants all Americans to purchase their health insurance in the private health insurance market. And yet, it is in the private individual market, where the premium and out of pocket costs are the highest and the protections for the American people are the fewest.
McCain wrote in an article published in an actuarial magazine this week indicating that he wants to deregulate health insurance, the same way he did banking. http://www.contingencies.org/... We all know how well that worked out! Throwing people into the unregulated individual health insurance market with only a $5,000 tax credit for a family of 4 will leave most families still unable to buy adequate coverage and will likely double their out of pocket costs!
McCain’s plan is estimated to leave families on the hook for approximately $7,900 in out of pocket costs for premiums alone (the math is $12,860 – $5,000 tax credit = $7,860). And that figure does not include the high deductibles and higher cost sharing that are commonly required under the individual market plans. If Americans think they are paying a lot for health insurance now, ‘you ain’t seen nothing yet,’ under John McCain's proposal.
The typical working American with employer health insurance coverage is currently paying out of pocket on average $3,340 per year on premiums (their employer is paying for the rest). Thus, under McCain’s plan, the cost of health insurance for most working families will more than DOUBLE from what it is now.
“Wait a minute,” you say! I thought McCain wanted to bring down the costs of health care. And you would be right – kind of. He wants to bring down the costs of health for Government and for Big Business – let them off the hook – which only means that you, the American people, will be asked to pick up the remainder of the tab.
Obama has a better idea.
Obama cares about the costs of health care to employers and to the government, but he also cares about the costs to the American people.
Obama’s plan will help people lower their out of pocket premium costs for their employer health care coverage (by about $2,500 per family per year) and he will offer those without any employer or government coverage, new insurance options at group rates with direct premium subsidies based on a family’s annual household income.
The new choices under Obama’s plan are to purchase affordable health insurance:
- as part of a national health insurance exchange. This option gives Americans the same coverage that members of Congress have, where you can choose froma list of private health insurance plans at group rates.
OR
- by enrolling in a new public plan for non-elderly, similar to the Medicare program, where Americans can purchase affordable insurance, under which they can get their health care from any doctor or hospital without insurance company interference.
Estimated Impact of Health Care Reforms for a Family of Four*
Current Employer Market Under McCAIN Under OBAMA
Out of Pocket
Annual Premium $3,354 $7,860 $854
Average Deductible $1,000 $2,750 $1,000
TOTAL $4,354 $10,610 $1,854
Coinsurance 20% 26% 20%
# Americans with
employer/group
coverage 158 million 138 million 200 million
*These estimates are derived from the candidates proposals, recent KFF findings KFF reportand an analysis by Thomas Buchmueller, Sherry A. Glied, Anne Royalty, and Katherine Swartz published in the journal Health Affairs.Health Affairs article
Bottom line:
Under McCain: About 20 million people will LOSE their employer coverage and their average out of pocket costs for health care will increase from about $4,350 per year with 20% coinsurance to over $10,000 per year with 26% coinsurance in the private individual market.
Under Obama – More than 40 million people will newly OBTAIN health insurance coverage and their out of pocket costs for health care will decrease from about $4,350 per year with a 20% coinsurance, to $1,854 with 20% coinsurance, with direct subsidies available based on family income.
The choice seems obvious.
