Picking up Nickels

Wednesday, September 29, 2010

Annual double digit health insurance premium increase is here

I've been talking about my ever-increasing health insurance premiums for several years now. This year was no exception as I was greeted with a 20% premium increase to keep my existing basic HMO plan for another year, although I ended up downgrading my plan yet again to one with lesser coverage and "only" a 13% price increase despite near zero rates of inflation.

The price increases over the past decade have been shocking. Since 2001, my health insurance premiums have increased by 143% while the rate of inflation during that time is a much lower 23% (so says usinflationcalculator.com):

When told about latest my increase, a family member commented, "They must be getting ready for Obama Care", despite the fact that I've been seeing these increases happening at least eight years before President Obama was in office and five years before then Governor Mitt Romney of Massachusetts enacted similar health care reform at the state level. Oddly, Romney seems to have no problems criticizing "ObamaCare" even though it is modeled after "RomneyCare" (as humorously illustrated by Mike Luckovich of The Atlanta Journal-Constitution):

I am very disappointed with our politicians who have focused on being anti-Democrat and anti-Republican instead of doing the right thing for the citizens that voted them into office. Many Americans see no need to change anything about our healthcare system since they have no idea how much money basic healthcare coverage costs and I think that something dramatic has to be done to make the average citizen aware of the frightening rate at which our health care costs have been increasing. I believe that once that information became public knowledge, the cries of "socialism!" would disappear and people would be demanding that our elected officials take action immediately.

One way I see to help open some eyes would be:

  1. End all employer subsidies of employee health insurance premiums. The full insurance premium should be documented on all pay stubs so that employees are aware of the full cost of their coverage as well as the extent of the large annual cost increases.
  2. Change income tax handling of health insurance premiums by adding a ceiling for tax deductibility (say $15k for families, $7500 for individuals) so that individuals would experience a tangible tax bite as premiums increase by a large amount every year and finally understand the extend of the crisis we're in.

I think that seeing the extent of these costs would lead to a groundswell of public support for real health care reform. Imagine the public outrage that would occur if rent or mortgage payments for everyone increased by 10% every year for a place with a sagging roof and peeling paint? I predict that the streets would be full of people calling for an end to these predatory price increases, and rightly so.


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