Yesterday it was announced that my company would implement a co-pay for all health plans. So now, depending on the plan, employees will get between $20 and $200 deducted directly from their paycheck. Up until now the company covered all premiums for all health care plans.
I'm not really all that upset about the whole thing. In fact, I kind of expected it. The move is to try and control the company's contribution toward the upward spiraling cost of healthcare in two different ways.
A) Keep the companies contribution to healthcare flat even though cost have risen
B) Keep the companies contribution to all employees equal whichever plan they select.
B. Is being implemented by charging a higher co-pay for the POS plan than the HMO. POS plans cost the employer more so in effect all the other employees on the HMO plan subsidize the cost of the more expensive employees. Considering I'm on the cheapest plan, I am single, and I am young I am the one doing the most subsidizing so this is a good deal for me overall.
However, what I think this really points out is that healthcare is becoming much too expensive and I think this is a shame.
I used to believe in universal health care but I no longer do. There are many reasons why healthcare is so expensive but I believe that the major culprit in the rising cost of healthcare is the fact that most patients see the treatment as free. You go to the doctor, you might pay a small co-pay, and you get treated. Further, that doctor is obligated to treat you with the utmost care no matter the cost (there are some restrictions but in reality very few procedures get denied if the doctor recommends it) and the effect it will have on other patients. There is little incentive for the patient to refuse healthcare as he is paying very little of the actual cost of providing that healthcare, thus cost spiral out of control.
Like anything else healthcare is based on supply and demand. Their are limited resources which to treat everyone. However we live in a society where most people have access to some form of healthcare and those who don't have the right to at least emergency care (which ends up costing taxpayers more money anyway as preventive care is usually less expensive).
In the end, everyone suffers from more expensive and a greatly degraded healthcare system. In a free market system you simply can't legislate something like this. In the end, the people who are most hurt by trying are the people who the system are trying to help. It is the same reason I don't think that excessively taxing the rich actually helps or why I don't think raising the minimum wage is a good idea.
Think about it, who is the person least affected by this raise in cost by my company? Me. Like I said, I'm on the least expensive plan and I require little health care anyway. Within the company I am probably in the top 20% of salaries so losing $20 a month is really no big deal to me. However it is a big deal to the guys barely earning enough to get by. This $20 (much more if they have a family or are on the more expensive plan) is going to come out of something and so they will have to scale back on other necessary goods. The problem is actually even worse than this. As all healtcare becomes more expensive people like myself will probably always still be able to afford it eventually pricing out the people at the bottom.
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3 comments:
DEATH TO TRIAL LAWYERS!!
Actually, trial lawyers really can't be blamed for this one. California put caps on the size of malpractice awards but health costs continued to increase at the same rate. I read an article by one reporter who investigated the actual malpractice insurance costs of several doctors as a portion of their total income and it's not really that significant. The cause of rising health costs are basically because of modern insurance practices (mostly HMOs) and doctors themselves. Health insurance is making it increasingly difficult to choose from a wide selection of doctors, which reduces competition. Doctors are free to increase prices and are earning more now relative to the average income than they ever have. Secondly, though increasingly more advanced equipment/drugs/technology is required doctors are being less and less picky about supliers' prices. The medical supply industry has picked up on this and is often selling items with a several hundred or even several thousand percent markup. Until doctors and hospitals start shopping around more and look into importing cheaper, but perfecty acceptable, alternatives the prices are going to continue to rise. To make things worse congress is haevily influenced by US drug manufacturers and recently passed a law forbidding HMOs from making bulk deals with other drug manufacturers.
What we need is for congress to quit supporting anti-competitive practices and for the justice department to start enforcing our antitrust laws. The Republican tendency to blame economic/financial woes on lawyers is little more than a petty distraction technique.
Terence, you are correct, people don't see health insurance premiums as part of their salary - they see it as a right. Some people use the insurance funds quite freely because, as you say, they think it's virtually free. (These people are actually paying for it with money from you and people like you because you are paying premiums but don't need much health care). When premiums go up, those users think it's unfair for it to come out of their pocket. They see it as a ripoff by "big insurance" and their heartless employers. If some people had to be responsible for saving their own funds for potential health care costs and for retirement (instead of having their employers do it) they would be wiped out by a sudden medical problem and would retire penniless.
-John
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