Thursday, May 12, 2011

Is this even news?

Health care costs for American families are increasing. Is this even news any more? When health care costs go down, that will be news.

But I did pick a few nuggets out of this increase. First of all employers are pushing more of the insurance costs onto employees in an effort to control their costs. I don't see a problem with this. Your employer provides health insurance but where does it say that they have to pay for the vast majority of it? They don't. They have to pay for what they can afford.

Health insurance is a benefit that is part of an employment package. This is true whether you are a CEO for a multinational or bagging groceries. If you are offered a job at $15/hour working in a retail store. It provides two weeks vacation each year and a 401K, and no health insurance. How does that compare to a job working at a retail store for $14/hour which also provides two weeks vacation, a 401K and minimal health insurance at a cost to you of $50/week. Which job would you take? I would take the one with insurance. In looking at job compensation, never just look at the rate you are paid but everything else involved. This can also including commuting costs and distance and hours required to work - 7am-3pm or 7pm-3am - there's a big difference there.

So health insurance is one thing a company offers and the costs may change. The company may also choose to move their office to another town, or change how much they put into your 401K or change their vacation policy. That is their prerogative. If I company can't afford to keep up with the insurance increases set by their insurance provider and maybe has to cut back on benefits offered or increase co-pays and all sorts of other options but the premiums go up. You can't blame the employer, they are trying to stay financially solvent and not have layoffs.

Another point is that although health care reform is in the works and is starting to show its impact, it has only had a very limited impact on curtailing costs. Those changes are still coming.

My point (because I always have a point) is that health care costs money. There is no way around this. It is based on skilled people providing services to you to keep you healthy. This doesn't come cheap. You can't have an MRI using a several hundred thousand dollar machine, that has to be maintained, serviced, upgraded and periodically replaced without expecting to bear some of this cost. Some of the cost comes directly out of your pocket, some comes out of your pocket indirectly through lower salary from your employer, and some comes out of your pocket from government subsidies etc. You are going to pay for it.

So until health care costs go down, there is no news and we still have to pay for it. If your employer needs to increase your share of your health care instead of letting you go, which would you prefer?

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