Washington Matters


Why Obama Can't Sell Health Reform


If there were a single reason why President Obama has been unable to win wide backing for revamping the health care system (of course, there isn't), it would be this:  Most Americans don't have any idea what they pay for medical care or how fragile the insurance they have really is.

Think you know? Take a guess at your annual costs and then read on.

If you're one of the 160 million Americans who get health care through your employer, you might know how much your monthly premiums are, but you probably don't know that you pay only about a quarter of the cost. Your employer pays the rest, and that's one of the reasons he can't afford to give you much of a raise.

The cost of coverage for the average family is now about $13,375, according to the Kaiser Family Foundation. Over the past decade, that figure has climbed 138 percent, and if the trend continues, by 2019 the average cost will be $30,083. Next year alone, it's expected to climb about 10 percent -- to about $14,700. Employers, on average, pick up 73 percent of that, or $10,740. So adding 10 employees to the payroll, costs a company over $107,000. No wonder a firm thinks twice about creating new jobs or giving bigger raises.

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The average employee share will be close to $4000 next year, or $330 a month. And remember, that's the average. The less your employer can afford -- or the more generous your plan -- the more you'll pay. Add  to that of course, your out-of-pocket expenses, including deductibles, copays and the myriad of expenses that aren't covered. No one has compiled a reliable figure for what the typical family total is, but you'd do well to take a hard look at your own expenses before concluding everything is just fine the way it is.

If the total number is shocking, consider this: Everyone who has insurance is helping to pay for the uninsured. Many object to the reform plans because they see it as income shifting -- making those who can afford care pay for those who don't. But we already do. When hospitals treat the uninsured for free, they shift the costs to the rest of us -- resulting in a $1,000 annual increase in our tab. And there's a good argument to be made that it will be cheaper to provide insurance for almost everyone, rather than subsidize unnecessary emergency room visits.

Also unknown to most Americans is how fragile their situation is. Few even realize their coverage is capped until they are hit with a major illness and quickly reach the cap. Health bills are the single biggest cause of bankruptcies in the U.S. in 2007, according to a Harvard University study, and half of those who went bankrupt had insurance.

Plus, few who have individual coverage realize how quickly they can lose it -- how easily an insurer can cancel it or raise the premiums by tenfold if you get sick. Lost your job? You can continue coverage under COBRA for a while, but it's expensive. Subsidies in the stimulus bill helped make it affordable for many, but that's short- term help.

Retiring before you're eligible for Medicare? Good luck getting health care you can afford. You'll be astounded at the prices if you have any kind of pre-existing or potential vulnerabilty -- from high blood pressure to a parent who died of cancer or had osteoporosis. 

Too many of these costs and potential problems are hidden, and too few Americans take the time to examine their coverage, its limits and what their total bill is now. And very few worry about the effect on employers, although their costs directly affect job creations and compensation. Americans need to look at these issues a lot harder, and employers need to do a whole lot more to make their expenses -- and the indirect impact  -- a lot clearer. 

  




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