No end to economic mess without health reform


Dedicated to affordable, quality healthcare and coverage for all Americans.

By Consumers Union on Tuesday, November 25th, 2008

I’m not an economist. In fact, I get all woozy and sweaty when asked to figure percentages. But when the guy just tapped by President-elect Obama to run our nation’s budgeting says we can’t get out of this economic morass unless we also fix our healthcare system, I listen. We all should.

“Although it (healthcare reform) may not seem immediately relevant given our current difficulties,” writes Peter Orszag in his blog post as Congressional Budget Office director, “it will be crucial to address the nation’s looming fiscal gap – which is driven primarily by rising healthcare costs – as the economy eventually recovers from this current downturn.”

Orszag’s right, most of us are still in shell-shock over the losses in our 401(k)s and our home values – an estimated $11 trillion, just vanished. And then there are the impending job layoffs. How is healthcare relevant to getting out of this economic hole?

It’s that fiscal gap he speaks about – we can’t keep paying more for less. If you’re fortunate enough to have insurance through your job, your premiums keep going up. The average for a family this year is $12,680, of which you pay about $3,350. That’s nearly double what you paid in 1999. Your salary didn’t increase that fast.

And then there are your deductibles. You now pay an average $1,000 a year if you’re in a PPO, according to the latest survey of employer-sponsored health plans. That, too, has doubled over just the past year. If you think all these cost increases don’t affect your employer, too, just ask GM.

More spending doesn’t mean better care. The Washington Post put it bluntly in dispelling healthcare’s biggest myths. The United States is No. 1 in only one sector of healthcare – spending. But we’re behind most developed countries on virtually every statistic for quality of care. That’s worth it.

As for those predicted layoffs, no job means no insurance. Try buying a policy on the open market. Consumer Reports found in a survey that three-quarters of people without insurance couldn’t afford an individual plan. And if they could afford it, we found that the median out-of-pocket expenses for a year were $2,264; while those with employer-based coverage paid less, only $973.

Even if your job is secure, each lost job costs all of us more for healthcare. For every 1 percent rise in the nation’s unemployment rate, another 1 million people will enroll in Medicaid (600,000 kids and 400,000 adults). The states have to come up with another $1.4 billion each time the unemployment rate ticks up to cover those health costs. How is your state dealing with its budget shortfalls? Higher taxes, more layoffs. The cycle continues.

This is a lot of numbers. Especially for the mathematically challenged like me. But consider this – if the new Administration makes quality health coverage that everyone can afford to buy part of our economic recovery plan, we will all have more money to pay for our mortgages, our college education, our retirement plans. And more important, we’ll have the peace of mind knowing that we have access to quality healthcare when we need it.

Isn’t that the real the goal of any economic recovery?

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