September 26th 2008
Economic crisis may hamper candidates’ health plans
The US banking and economic crisis has taken centre stage. Many Americans are worried about whether they’ll be able to get a car loan next year, much less pay for health care.
But they have good reason to worry about the latter. There was some stark news this week from the Henry J Kaiser Family Foundation, which tracks the cost of employer-paid health coverage. That’s the bedrock of the American health-delivery system, which more than 160 million Americans getting their insurance through their workplace or a family member’s workplace.
The hard facts: private health coverage for the average family of four now costs US$12 680 per year. Workers’ share of that staggering costs is $3354, which Kaiser described as only a “modest” rise of 5% from last year.
It’s true, a 5% rise in premiums is relatively small compared to the double-digit rises in some years over the last decade. But the figure is more than double what workers paid in premiums in 1999. Over the same time period, wages are up 34% and inflation 29%.
Kaiser’s data shows that it’s not just consumers who are clamoring for some cost relief in the health system. Employers are buckling under the weight of rising costs, leading more and more of them to opt for high-deductible insurance plans that let them limit their financial liability when it comes to workers’ health care.
It’s a big part of the reason Republican nominee Senator John McCain wants to lure employers out of the health-financing business altogether.
But there’s a good chance the current panic over America’s financial markets could have a real impact on how well John McCain or Barack Obama will be able to sell their health plans as president.
First McCain. He’s offering up tax credits that consumers can take onto the individual insurance market to buy their own coverage. He wants to join that with wholesale deregulation of the health insurance industry so that companies can get out from under state rules and have easier access to the patient’s they’d like to insure. Which begs the question: will a country in the throes of an economic crisis due at least in part to lax financial regulation want to turn around and allow deregulation of the insurance industry as well?
But it also presents a dilemma for Obama. Right now Congress is mulling a $700 billion White House proposal to bail out the financial industry and get credit moving again. That’s as much in one swipe as the Iraq war has cost in five and a half years. Obama’s health plan mandates insurance for all children, and increases subsidies so that millions of others can have access to coverage. Almost no one in Washington is opposed to spreading access to insurance. But now a lot of them may think more than twice about Obama’s estimated $65 to $100 billion price tag.
Todd Zwillich
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