The Major Reason You Can't Afford Medical Insurance

If the productivity gains where to be shared as in the years earlier, seems the wages would be able to keep up with the medical costs. With 130% increase in wages, this would be able to allow a one income family to be possible again.
One has to wonder back in 1975 what happened to change the direction of the employer/employee pay relationship.
Of course the cost of medical care in the US is as much a 2X the amount of other industrialized nations with outcomes that are worse than countries that medical care cost are less.

Health spending per capita, in US$ PPP-adjusted, compared amongst various first world nations.

With the relationship between productivity and pay stopping to increase with each other in 1975, it is little wonder there was an ever increasing families with 2 earners.

Productivity isn't going where it used to.

Where is the money going, it's not trickling down, it's flowing up.

Uneven progress among US families.

This short video shows the income disparity of the system we have in the US. Please take 2 minutes and watch it, if you think it stinks shut her down.

With out the income, taxes are not keeping up with Govt spending. If pay had kept up with productivity perhaps the debt would be reduced to a level that is not surpassing the GDP.

US federal debt held by the public as a percentage of GDP, from 1790 to 2013
Then there is the debt, seems that along with pay not increasing debt has jumped up to a similar level like it was when the US fought WWII.

www.yadongbrake.com...
www.mybudget360.com...

a reply to: seasonal

Yeah, trickle-down economics/supply-side economics/Reaganomics(/Trumpnomics?) is complete bullsh# that the GOP has been pushing since the early 70's. Its origins are more political expediency than economic theory.

Not the Democrats have any radically different ideas mind you. Nobody really wants to address the elephant in the room which seems to me to be that capitalism has worked extremely well and a very significant part of what market competition provides is a constant pressure to reduce labor costs for a given level of productive output.

How do you reduce labor costs? You employ less people for less money. Consider manufacturing. I posted this in another thread a few days ago:



Along with this link: Think nothing is made in America? Output has doubled in three decades

The upshot? Output has continued to go up while the amount of labor required and the expense of that labor has declined. As to your assertion about medical insurance. The costs in a few sectors have all been increasing drastically relative to the CPI. Health care is one. Education is another.

Why? Because these are fields that still require roughly the same levels of human labor. They're particularly resilient to things like automation and the sorts of improvements in efficiency beyond that which have reduced the need for labor pretty much across the board everywhere else.

Yes, the only thing trickling down from the top is ...

Well, I can't say it because it paints a very, very crude mental image.

I've talked to business owners. Getting tax cuts and increasing profits doesn't mean they'll hire more people. It doesn't mean they're going to pay more. Why pay more when they have employees who aren't quitting? Why hire more people when they don't need more people?

Giving more to the rich and hoping to be fed some table scraps is as realistic as communism working.

Both might sound OK on paper, but both never work in the real world.

There's a reason for things like regulations -- regulations serve as incentives for companies to do the right thing.

My wife is a physician(MD, FACEP)...

The reason healthcare costs are through the roof is a direct effect of the affordable care act...

It's causality...

-Chris

I`m suspicious about how they determine productivity.
in a manufacturing economy it`s easy, if you made more sewing machines today then you did yesterday your productivity has gone up, but in a service economy like we have now how do they determine productivity?

a reply to: Christosterone

The reason healthcare costs are through the roof is a direct effect of the affordable care act... It's causality...

(image source: Forbes)

I think you must have missed the whole skyrocketing costs of health care that was the impetus for the PPACA in the first place.

originally posted by: Christosterone
My wife is a physician(MD, FACEP)...

The reason healthcare costs are through the roof is a direct effect of the affordable care act...

It's causality...

-Chris

Yes, because before the ACA healthcare costs weren't already through the roof...

/s

a reply to: Christosterone

Health care was going up before the ACA, but with the ACA there are alot of people who are now using insurance inplace of e-room.
The theory was that insurance would go down because the people would go to the Dr. instead of e-room, the e-room is hugely expensive. Someone forgot to tell the medical "community" that they are not all e-rooms.

a reply to: seasonal

Electronics have taken over much of the human-populated jobs, and also made jobs held by humans easier to do.

Of course productivity will continue to increase faster than hourly compensation. And do be fair, when a job is easier to do, compensation shouldn't increase at the same rate as productivity--it should stagnate, to be honest, because like your chart says, it's COMPENSATION for skill and labor, and if something takes less skill to do and is generally easier to do, why should compensation continue to increase?

ETA: Also, there are myriad reasons for the cost of U.S. healthcare costs (which I hope includes insurance costs) that go far beyond what is put forth in your OP. It is an octopus, and you're only discussing a couple tentacles. It's not as simple as you've put forth.

ETA (again): And for the record, I am married and have two children, and we are a one-income family who can afford healthcare. In fact, most people can afford it, they're just not happy with the total cost of it nor with the rate of increase in the past couple years--this year being dramatically higher than previous ones. If we all couldn't afford it, we'd all be living in shantytowns and living off of dollar menus and riding bikes to work. I think that we can cease with the hyperbole about affordability and call it what it is--a dramatic rise in a forced necessity (under penalty of "tax") that many people didn't want in the first place, and even more despise right now. But most of us can still afford it, we just don't want to have to.

a reply to: theantediluvian

Any reason why you're citing an article from 2013 that doesn't show the rate of cost increase after the PPACA really caused the increase in annual cost?

This site lets you understand this dramatic point:

The increased cost of health insurance is a central fact in any discussion of health policy and health delivery. Annual premiums reached $18,142 in 2016 for an average family. For those Americans who are fully-covered, these cost realities affect employers, both large and small, plus the "pocket-book impact" on ordinary families. Yet for those buying insurance on an exchange or private market plan for 2017, the average increase before subsidies was a shocking 25 percent.

You have to note that, since the "Affordable" Care Act went into full effect, we're looking at skyrocketing health-insurance rates that make the 6.5% rate of increase of healthcare (different from health insurance) in your chart look laughable (measuring the last year of increase noted...the other years are similarly in the single digits).

Furthermore, the plans that I've been offered through my employer all have increased copays and increased minimums for prescriptions compared to last year as well, so that's even more out-of-pocket healthcare costs added on top of the 25% increase in insurance premiums for 2017.

So, I think that you are mischaracterizing the years prior to the PPACA when you call the costs "skyrocketing."

originally posted by: Kettu
Yes, because before the ACA healthcare costs weren't already through the roof...

See above.

a reply to: SlapMonkey

As far as affordablity, I have 2 relatives right now, one has severe back pain the other has severe knee pain. Can't afford insurance, can't afford co-pays.
I think perhaps you confuse the real costs. Being able to pay rent, food, electric, gas, and auto insurance for 1 month or pay one months insurance cost. Not both. And yes if they bought insurance they would be living in their car that wouldn't have insurance or gas.

Of course this thread doesn't address the whole mess of a medical system like the AMA, cash/insurance charge differences, the externalizing of costs by the medical industry and many many more that would fill many many threads.

a reply to: SlapMonkey

As the employment prospect dwindle, I wonder at what point the gains in productivity going to be taxed and distributed? The prices of goods haven't fallen becasue of automation, it would seem that the profits are being taken while they can be. In the corporate world the only numbers that matter are next quarters.

Of course productivity will continue to increase faster than hourly compensation. And do be fair, when a job is easier to do, compensation shouldn't increase at the same rate as productivity--it should stagnate

Did not read the OP.
But I was alive in 1975. Health insurance back then was major medical. Meaning my folks paid for the dentist, the doctor. Meaning MY PARENTS took the responsibility of keeping me healthy. And dad held 2 jobs.

Health insurance needs to put responsibility back on the insured. Big Pharma rules the medical profession.

We need to keep ourselves healthy through diet, exercise, stress reduction, making community and family connections. The pills won't work forever.

I won't lengthen this post with my personal dealings with conventional medicine. But I developed my opinions from those dealings.

I think we can agree the health industry in the USA is in dire need of fixing. I think we can all agree ACA has not helped a single bit as far as the cost. What good is it to have everyone be insured if no one can afford it?

Needs bi-partisan effort and a strong leader. Didn't have that with Obama and the Dem House/Senate. Maybe we'll get a better effort this time around?

a reply to: katfish

That's cool that you want treat a, lets say, a heart valve that was damaged by a virus with food and herbs. But if the medical costs are put on the person and only the person, welcome to debtor's prisons. Very few people will be able to plop down the $200,000 it costs to have a Dr. install a new valve.
I will just point MRI machines that are controlled by the AMA to where they are allowed to be placed geographically. This is 30 year old tech, and the price refuses to drop. In other first world countries they are $350 a pop, here anything north of $2000 isn't unheard of. Simply a monopoly.

It's a bubble caused by an unholy alliance between hospitals/insurance/politicians. It will pop, and you may get your wish if I am reading your post correctly, and pay full boat for all dealings with the medical cabal.

a reply to: seasonal

I said that most Americans can afford healthcare because the evidence exists to show that they can. Of course, there are always outlying instances where extreme situations occur, and I know a few people myself who are in a similar situation that you describe. But the other vast majority of people who I know that can afford their annual healthcare, so statistically speaking, MOST Americans CAN afford healthcare costs.



a reply to: seasonal

This is a discussion for another thread, as what I would get into during this discussion would derail the thread and be relatively off-topic. Suffice it to say that people and companies who are good at business do not look to break even at the end of each fiscal quarter (as you noted); R&D, litigation funds (just in case), increasing personnel costs (to include health insurance), and myriad other reasons to hoard cash from year to year are all valid reasons why companies seem to be greedy. Don't forget that many companies spend portions of their profits on large charitable contributions throughout the year, too.

Don't get me wrong--many corporate executives are greedy and frivolous with spending corporate money, but those instances are what they are. I don't think that employment prospects are as dwindled as you make them out to be--there are help-wanted signs everywhere I drive in my town and surrounding towns.

a reply to: seasonal

I think that what you're forgetting in your response is that most people who want to pay out-of-pocket, without insurance, for healthcare have the means to save up in case of a large health emergency, and that doctors and services are often discounted--sometimes greatly--when they don't have to deal with an insurance company.

Katfish made points that you really can't invalidate--trying to demean said points by calling out your perception that she wants to treat heart conditions with "food and herbs" is just an attempt to elicit an emotional response. She said no such thing.

And I know of a company within short driving distance that offers MRI scans for $300, and that includes most, if not all of the services, needed to clarify the image, along with a DVD of the MRI for you to take.

Shopping around matters, even if you have insurance. I'm not saying that these options exist everywhere, but really, most people don't even think to look, even if they do. The insured individual DOES need to lead a healthier lifestyle and they DO need to do a better job researching their options. I'd be willing to be that healthcare costs could be dramatically reduced if people wouldn't just always nod and say okay when a doctor or their office sends you somewhere for a procedure or MRI scan. When people paid for everything out-of-pocket, doing this was the norm, and it created lower costs all around because of competition.

Now there's no use in competing at cost because nearly everything costs more than your insurance copay--there's no incentive to lower prices.

a reply to: SlapMonkey

Of course my questions are to gain insight not argue.


I think this is a hidden issue, something that very close friends or family talk to each other about.

If everyone knows someone who can't afford to get a chronic problem taken care of how rare is it?

Where is this evidence that Americans can afford this?

I said that most Americans can afford healthcare because the evidence exists to show that they can.

And yes there are help wanted signs up all over, people can't afford to work. A perfect example of pay not keeping up with cost of living and productivity gains being rocketed up to the top 5%. Lets not ignore the people who just stop looking for a job. But like you said let's not do thread drift.

You Yanks are insurance mad. Some-one please tell me how much insurance companies make every year out of people paying into their system but not claiming? I'll bet you it's in the billions, so who's fleecing who?
You're so quick to blame those that can't pay "oh, I'm not paying for anyone else, only for me". Yet you do not question the insurance providers about their high costs and let them rape the vulnerable.
We had the very best system in the world here in the UK and we are allowing these, these people in power now trying to drag our system down to your debacle of a system of can't pay no treatment. Talk about mercenary.

a reply to: seasonal

I guess that the term "afford" can be defined subjectively, but I'm looking at it purely from a needs-versus-wants mentality (something that the average American individual forgets on a seemingly daily basis).

Let's take a look at this article from Modern Healthcare (because it was the most recent that I could find in a quick search):

Nationally, 9.6% of an employee's household income was spent on premiums and deductibles, compared with 5.3% in 2003.

Ignoring the dramatic increase in a decade (because that's not my point or argument), on average, the American household spends slightly less than 10% of their income on health insurance premiums and healthcare deductibles. That's the equivalent to ten cents of every dollar. One-tenth of our income goes to health insurance and out-of-pocket deductibles.

Are you really trying to tell me that, with 90% of our average income left, that we can't live a relatively decent life? Remember, we're speaking in generalized terms, here, so don't return with some extreme case of unaffordability to try and negate what I'm sharing and pointing out.

This article by The Atlantian shares information from a study by The Hamilton Project that tracked spending on basic needs (by low-income, middle-income, and high-income) and how it has changed as percentage of income over the past 30 years. When I say that America can afford their healthcare, I do so by noting that not one of the graphs or charts showing percentage of income spent on all basic needs (defined as housing, food, transportation, healthcare, and clothing) approaches more than 82% of one's income (low-income), 78% for middle-income households, and around 67% for high-income households.

While 18% of one's income is not exactly a ton of money for discretionary spending for lower-income families, the reality is that it IS there--even low-income households CAN afford the "basic necessities" to live in America.

THAT is the evidence to which I'm pointing when I say that America can afford healthcare costs. And to go even further with my claim, I'm probably closer to the ratio of a high-income household when it comes to the cost of basic necessities, because we choose to live in a house that barely fits our family so that we would be spending much less on mortgage and utilities. There are many better choices that MANY Americans can make with their money, but choose not to--they don't balance cost of needs versus cost of wants very well, and this is what creates the perception of an inability to afford such things.