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For years, conservatives have warned that rapidly rising health care costs require the United States to repeal the Affordable Care Act, gut Medicaid and privatize Medicare.  Now, the American Enterprise Institute cheerfully insists, the recent slowdown in that rate of the growth argues for precisely the same Republican policies.  But far from happily revealing new "marketplace disciplines on the demand for medical care" in which "consumers are finally getting more involved in managing and paying for their own care," the slower pace of growth in national medical expenditures reflects something else.  Instead, thanks to the erosion of the employer-based health insurance system and the dramatic cost-shifting to workers, more and more Americans are simply doing without the medical care they need.

As AEI's J.D. Kleinke noted in Friday's Wall Street Journal, "the growth rate of national health expenditures, according to data compiled by the Centers for Medicare and Medicaid Services, has been moderating since 2002."  And in Kleinke's assessment, this doesn't merely reflect the new medical breakthroughs, improvement in health care practices and cost-savings from generic drugs, but the growing magic of the marketplace:
The moderation has been driven by cumulative improvements in medical care and by insurers, and by marketplace disciplines on the demand for medical care. Consumers are finally getting more involved in managing and paying for their own care...

Combine all these new medicines, information channels and business compulsions with the slow, steady transfer of economic responsibility for health care--from corporate and government bureaucrats to consumers and their families--and suddenly health-care starts to look almost like an actual market.

A failing market, that is.  After all, with over 50 million people uninsured and another 25 million underinsured, so-called "consumer driven health care" remains beyond the reach of large swaths of the American public.  But it's not just those at the losing end of the health insurance "income gap" who are doing without.  Millions more are self-rationing by delaying or deferring altogether needed medical care.  And while President Obama's Affordable Care Act will help alleviate the crisis of the American health care system, Republicans and their allies would make it much, much worse.

At the heart of the problem is the rapid deterioration of the employer-based insurance system.  As the data show, that process was well underway before the onset of the Bush Recession in December 2007.  A September 2010 analysis by the Economic Policy Institute found that employer-sponsored coverage plummeted from 68.3% of those under 65 years old in 2000 to just 58.9% in 2009.  That translates to 7.3 million more people without workplace coverage in less than a decade.  In September 2011, the U.S. Census Bureau put the percentage of Americans covered by employer health care plans at 55.3 percent, down from 64.1 percent in 2000.  While the Census announced last fall that the ranks of the uninsured jumped to 16.1 percent, a recent Gallup poll put the figure as high as 17.1 percent.

(It's worth noting that these grim figures would be grimmer still without the actions of President Obama and his Democratic allies in Congress.  The Affordable Care Act has lowered the uninsured rate among young adults by enabling parents to add 2.5 million of their children to their existing policies.  And as EPI rightly notes, "The only reason why the drop in employer-sponsored insurance (ESI) did not translate into an even larger increase in the total share uninsured is because 4.9 million more people under 65 were covered by Medicaid/SCHIP in 2009.")

A year ago, the Commonwealth Fund revealed that since the start of the recession, almost 60% of Americans who lost a job and their health insurance - 9 million people - could not afford to regain coverage. Medical costs pushed four million more into bankruptcy.  But that tragedy doesn't even capture the dramatic shift of costs from employers to workers underway for years.

The 2011 Annual Survey of Employer Health Benefits by the Kaiser Family Foundation highlighted the growing burden on working families.  With the economic recovery starting to take hold, the average annual cost of a family premium jumped by 9 percent to $15,073 after slower increases in previous years.  As the New York Times explained, more and more of that cost is being borne by workers:

Over all, the cost of family coverage has about doubled since 2001, when premiums averaged $7,061, compared with a 34 percent gain in wages over the same period...About three-quarters of workers now pay part of the bill when they go see a doctor, and nearly a third have a deductible of at least $1,000 if they have single coverage, up from just one in 10 in 2006, according Kaiser.
As the Kaiser chart below shows, over the last decade employees' share of health care costs has not only grown faster than their employers' premiums, but has risen at more than triple the rate of wage gains.

Surveys in 2010 by Kaiser and the National Business Group on Health found that the situation is quickly worsening. The NBGH sampling of 507 firms each with over 1,000 employees revealed that 56% would hold workers responsible for a greater share of health care costs the following year.  The Washington Post summed up Kaiser's dire findings:

Forty percent of employers surveyed said they are likely to increase the amount their workers pay out of pocket for doctor visits. Almost as many said they are likely to raise annual deductibles and the amount workers pay for prescription drugs.

Nine percent said they plan to tighten eligibility for health benefits; 8 percent said they plan to drop coverage entirely. Forty-one percent of employers said they were "somewhat" or "very" likely to increase the amount employees pay in premiums -- though that would not necessarily mean employees are paying a higher percentage of the premiums.

And those are costs Kleinke's health care "consumers" already can't afford.  In August 2010, the New York Times reported on a study from the National Bureau of Economic Research which found that "among Americans responding to the survey, they said, 26.5 percent reported reducing their use of routine medical care since the start of the global economic crisis in 2007." A year earlier, Thomson Reuters reported that "21 percent of U.S. adults expected to have difficulty paying for health insurance or healthcare services in the next three months."  And as McClatchy reported in October 2009, a Consumers Union survey revealed that due to skyrocketing costs and reductions in coverage, Americans are being forced to deny themselves needed medical treatment. Among the findings of CU's poll of a 1,002 respondents:

In the new poll 59 percent said that the cost of their health care had increased more than their other expenses over the past two years. Fifty-one percent said they had faced difficult health care choices in the past year. The most common responses were putting off a doctor visit because of cost (28 percent), not being unable to afford medical bills or medication (25 percent), and putting off a medical procedure because of cost (22 percent).

Twenty-eight percent said they had lost or experienced cutbacks in their health care coverage in the past year. The greatest concerns about health care expressed by respondents were a major financial loss or setback from medical cost due to an illness or accident (73 percent), not being able to afford health care in the future (73 percent), necessary care being denied or rationed by health insurance companies (73 percent), and the prospect of rising costs forcing them to choose between health care and other necessities (64 percent).

Nevertheless, whether America's national expenditures rise quickly or slowly, the prescription for Republicans and their water carriers is unchanged.  "If we really want to tame the health-care cost beast and make insurance 'affordable,'" AEI's Kleinke declared, "We would double down on all of the positive developments":
"We would liberate people with their own money from layer upon layer of arcane, localized insurance rules. We would fix the tax code to uncouple health insurance from employment and let people purchase their own mix of services and coverage."
But we already know how this story ends.  Health care is not a market in which consumer and provider meet as equals, free of coercion.  The asymmetry in knowledge, the compulsion to buy (i.e. the sick patient cannot walk away) and exorbitant prices in the private insurance market virtually guarantee the self-rationing Americans experience today.  (Note that both Medicare and Medicaid are significantly less expensive than comparable private insurance.)And the policies Republicans would pursue - repealing the Affordable Care Act, gutting Medicaid, privatizing Medicare and giving tax breaks for high-deductible plans and health savings accounts - would only make things worse.

* Crossposted at Perrspectives *

Originally posted to Jon Perr on Sun Feb 19, 2012 at 12:40 PM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  Excellent post, AA! Consider that (7+ / 0-)

    conservatives will never admit that anything in their ideology is ever wrong, and no amount of data is going to change that.  The ideology simply bends to fit the moment, and amnesia suddenly sets in.

    Their own ideas, like the mandate that everyone must by private health insurance, suddenly becomes an unconstitutional violation of individual freedom, once adopted by a democrat... and that the original policy authors were 1990's conservatives is now absent from the conversation.

    Bottom line... If healthcare costs rose post ACA, Rethuglicans would be screaming that the country is clearly heading the wrong direction.  However, when healthcare costs actually decline post ACA, they just claim that things would be better with their "free-market" policies.

    When fascism comes to America, it will be wrapped in the flag, carrying a cross. - Sinclair Lewis

    by BelloBass on Sun Feb 19, 2012 at 01:29:33 PM PST

  •  Can you fix the link that says "AEI's J.D. Kleinke (3+ / 0-)

    noted in Friday's Wall Street Journal"?  Still reading ;)

  •  Excellent post! I'm still in chemo and have been (19+ / 0-)

    for the past 12 years.  Every week.  I have insurance.  Just about every week when I go for treatment I run into someone who has been diagnosed and is meeting with the on-staff advocates about their payment options.  Many of these people aren't willing to bankrupt their families and so choose to forego all treatment.  They just disappear.

    But they don't.  They go home and die.  Nobody cares. And it's criminal.

    "I speak the truth, not as much as I would, but as much as I dare, and I dare a little the more, as I grow older." --Montaigne

    by DrLori on Sun Feb 19, 2012 at 02:48:37 PM PST

  •  is there a chart that shows (2+ / 0-)
    Recommended by:
    yaque, Amber6541

    where this money goes?  Why did premiums double?  Did our use of services and drugs go up? the price of services and drugs themselves? the insurers' overhead? machinery?  

    It's one thing to say prices need to come down (they do), but what exactly do we need to get to come down?  I know it isn't all the insurance companies--- with MLR's of 80%, that's 20% of costs we can cut, tops, by going to single-payer, without cutting pay for providers and practitioners.

    "You're not stuck in traffic, you are traffic."

    by nominalize on Sun Feb 19, 2012 at 08:27:42 PM PST

  •  See, our economy depends on it (2+ / 0-)
    Recommended by:
    yaque, 207wickedgood

    Healthcare is about 18% of our GDP . When one considers what the executives of those companies make, you'll never get single payer passed. You and me make a single joint donation to a Super PAC lets say. Now, a CEO making 10 million a year can more than likely make a much larger contribution than the 2 of us combined - bam, we'll never have single payer and prices will never come down.
    Some of the provisions of the Affordable Healthcare Act are being waived , like executive pay. Wave the thing that gives the bill teeth.
    Whatever.
    If everyone can have access to healthcare, why the f*** would one work at McDonalds , Home Depot or some other McJob ?
    See, wages have to become competitive if we are all insured. Now, you give people making minimum wage a raise that shit trickles up to people with better jobs - until it reaches management, then they don't get theirs.
    Our economy is based in desperation and a huge part of that is healthcare costs.

    you can't remain neutral on a moving train

    by rmfcjr on Mon Feb 20, 2012 at 03:34:14 AM PST

    •  Actually, our economy is dying because of it. (2+ / 0-)
      Recommended by:
      mmacdDE, barbwires

        Our system is a model for no other country in the world. That's how bad it sucks. There is nothing about it that is in our best interest as a nation.
         The increasing premium and out of pocket costs we devote to accessing medical care, while wages have been largely flat for decades, have shifted money that would have been spent in the broader economy and shifted to a system of ever greater executive compensation and corporate profits.
         Coupled with increasing demands for personal savings for retirement due to declining pensions (and expected reductions in government benefits) and runaway costs of higher education and student debt the hollowing out of this nations real economic engine has been underway for decades.
         And it is not just the cost of accessing health care system, there is the personal toll of fighting your way through it. Denails of claims, denials of payments, statements no one can understand, bills for services you do not recognize for costs you can't understand. All of which add to the stress and frustration in our lives when we need it least.

      •  I agree (0+ / 0-)

        Your right. I was trying to make the same point as you, only snarky.
        Obama Care ? Now insurance companies can not drop you when your sick. He should run from that ?
        Our country is on decline because what is profitable is not always good. For profit education, whatever. Some things are a human right - education & healthcare are at the top of that list for me.
        I consider our education problem in this country SYSTEMIC. I think 99.8% of teachers WANT to be great, they have the ideas to be great and the will - it is the system that is failing them. Well, that coupled with the system is political .
        I like Singapore's model MYSELF. You could think another country has a better model, I'd love to hear the country and read about it. I love that kind of stuff.
        I am making things out far simpler than they are.

        Our country is dying because of many factors - think about this. Many Americans would rather live under the Taliban than under freedom. You may deny that, but what kind of country do you think this would be under Rick Santorum ?
        Do you think anyone who is voting for him thinks any different ? Aspirin ? As birth control ? ARE YOU FUCKING SERIOUS ? Sorry, that guy upsets me.
        We could go on all day about why we are dying - healthcare and stupidity are just 2 reasons why - 2 big reasons.

        you can't remain neutral on a moving train

        by rmfcjr on Mon Feb 20, 2012 at 04:14:52 PM PST

        [ Parent ]

  •  This is the same tactic Republicans have (2+ / 0-)
    Recommended by:
    Roadbed Guy, Amber6541

    used about tax cuts. To them, no matter what's happening, it's always time for tax cuts. Bush cut taxes while engaging the country in two unfunded wars. Now that the chickens have come home to roost Republicans insist that its time for even more tax cuts. Oh, and spending cuts!

    And so it is with health care, or as I like to call it, medical care--whether costs are rising or falling it is never time for the government to "interfere in the markets."

    The Republican response to either situation favors the 1% over the 99% of us. And the soluctions never change no matter the situation. They know what they want and make the facts fit their predetermined policies.

    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Mon Feb 20, 2012 at 04:40:03 AM PST

  •  I resemble this remark . . . (8+ / 0-)

    As a managing professional making over $100,000 per year, I still can't afford to go to the doctor. After paying $10,000 per year in my share of premiums for my family, which includes two sets of twins and a mother in law that can't work anymore, I can't afford to go to the doctor.

    I've got a deep cough that has persisted for more than two weeks, but even with my excessive premiums I have essentially major medical. I pay all medical expenses up to the $2,500 deductible per year, then I pay co-pays. I'm hoping my albuterol doesn't run out and leave me with an unabated asthma attack, but I simply can't afford a trip to the doctor right now.

    This is an excellent article that points out that I'm not alone. And it's not because I'm "lazy," as the republicans want most people to believe. It's not because I'm not pulling my weight in society. It's not because I've spent all my money wastefully on big screen TVs and (cough, cough) a refrigerator. This is a problem for everyone, and single payer is the only way to effectively deal with it (of course, that would also destroy the whole "Attack on religion" argument as well, so it will never fly).

    •  I could buy a big screen TV every month (4+ / 0-)

      with the money we spend on health insurance.

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Mon Feb 20, 2012 at 08:27:13 AM PST

      [ Parent ]

    •  It is shocking that (2+ / 0-)
      Recommended by:
      Wendy Slammo, mmacdDE

      the median income in this country is as low as it is.  I know many people in that income bracket, and while you and they are in the top 10% I know it doesn't feel like it.

      A middle class, median income in the US should be around $80K, not half that.

      And when I talk to others about the time I spent in Europe, I ask them to imagine what their lives would be like if they didn't have exorbitant medical expenses, and good education was paid for.  Imagine here how our economy would change if all that money was freed-up to be spent on day to day living expenses.

      The insurance companies are sucking it all up...

      "Mediocrity cannot know excellence." -- Sherlock Holmes

      by La Gitane on Mon Feb 20, 2012 at 09:18:30 AM PST

      [ Parent ]

    •  The single payer argument, old bird, (1+ / 0-)
      Recommended by:
      RJDixon74135

      is why I'm so adamant about re-electing the president, retaking the house and at least hold our own in the senate.  THIS is how we get to single payer: protect the first steps and build from there.

      P.S.  Hope you can find the $$$ to get that persistent cough checked.  I'm a person who is independently insured and basically pays hundreds of dollers per month just to avoid a catastrophe.

  •  "Let them eat cake" (1+ / 0-)
    Recommended by:
    Amber6541

    That's what they are saying "Let people purchase their own mix of services and coverage."

  •  I would also like to see (3+ / 0-)

    a chart that shows the increase in insurance company profits and parallels it with this:

    ...over the last decade employees' share of health care costs has not only grown faster than their employers' premiums, but has risen at more than triple the rate of wage gains.

    "Mediocrity cannot know excellence." -- Sherlock Holmes

    by La Gitane on Mon Feb 20, 2012 at 09:10:56 AM PST

    •  Also, executive compensation including salary and (0+ / 0-)

      benefits which, of course, lower profits. From the LA Times in August 2010:

      Leaders of Cigna, Humana, UnitedHealth, WellPoint and Aetna received nearly $200 million in compensation in 2009, according to a report, while the companies sought rate increases as high as 39%.

      Eliminate tax breaks that stimulate the offshoring of jobs.

      by RJDixon74135 on Mon Feb 20, 2012 at 07:08:11 PM PST

      [ Parent ]

  •  Gotta love that marketplace discipline ! (0+ / 0-)

    Healthcare costs are up, now they're down - its all the fault of   . . . no one having any money.

  •  the number of unemployed nurses (0+ / 0-)

    I know personally is something I've never seen in my lifetime. They tell me that most people just aren't getting health care so it's not a surprise to me but darned scary. We are all really going to pay for this when more and more people delay treatment for simple conditions and end up with emergencies that are both expensive and might have long lasting long term health effects whereas early treatment or intervention would have been so effective...not to mention humane. My friends across the pond express dismay at this brutality and indifference towards life in the USA. Most express disbelief at first.

    •  They also have been talking (1+ / 0-)
      Recommended by:
      Wendy Slammo

      about the lack of primary care physicians.

      I know an easy way to fix that. If somebody agrees to go into primary care for at least 5 yrs, they get all their student loans paid off. All of them.

      Poof! We'd have more primary care doctors than specialists in about 2 yrs.

  •  I've often thought DHMO and HDHMO products (2+ / 0-)
    Recommended by:
    barbwires, RJDixon74135

    should not be legal.  Basically they are a way for employers to claim they're offering healthcare while only covering serious disasters.  When you have a $5000 deductible you have to meet before you start getting any discount, healthcare is out of the reach of most people who aren't having some sort of major issue, like cancer or heart disease (and have no choice but to go in).

    All they do is kick the can down the road...and then when you are forced to go in (perhaps in an ambulance), that nagging problem that's been bugging you for a few years is now stage 4 cancer and if it doesn't kill you, will cost many times what treating it early would have.  

    Atheism is a religion like Abstinence is a sexual position. - Bill Maher, 2/3/2012

    by sleipner on Mon Feb 20, 2012 at 12:45:40 PM PST

    •  Speaking of ambulances, (0+ / 0-)

      Here in the Republican stronghold of Tulsa, we've taken a first step on the slippery slope toward socialism and even the Republicans are happy about it.

      We all pay $3/month on our water bills for ambulance service. As long as you don't opt out, there's no further charge for as much service as you need. We've been doing this for 3 or 4 years now, and I haven't heard a single complaint which is a big change from all the complaints people had about the high cost of the service before we made the change. We've never had to use it, bu it's sure a comforting feeling knowing that I won't have to worry about what is could cost to call them.

      Eliminate tax breaks that stimulate the offshoring of jobs.

      by RJDixon74135 on Mon Feb 20, 2012 at 07:25:02 PM PST

      [ Parent ]

  •  Thanks for this diary. Very informative. n/t (0+ / 0-)
  •  So there's diversity... (0+ / 0-)

    On both sides. That's good.

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