America's Sick - Part I
James Bibbings, July 9th, 2009
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By James Bibbings -Commodity News Center
July 9, 2009 - The Obama administration is currently working to push healthcare reform down the pipeline at an alarming rate. The reason for this is that President Obama is trying to make good on his promise that sweeping healthcare reform will be completed by the end of 2009. I even touched on the fact that this push would come in "Acting Quickly" from June 15th. What's really important here though is not whether or not he meets that deadline. Hitting that deadline is actually quite irrelevant as the proposed options to fix the system won't address the real problems in health care. Even worse yet it seems that the administration doesn't care that the real problems won't be addressed. Let's take a look at the healthcare problem, analyze the facts, discuss the proposed solution, and identify what changes REALLY need to be made.
The Facts
As of 2007 there were 45.7 million uninsured Americans; this is where President Obama gets his 46 million people figure. Within that group of people, 20% (just over 9 million) were not US citizens. Also, of that 45.7 million people 36% of them had a family income of greater than $40,000, which is about $20,000 (or more) higher than the 2009 poverty line for a family of 4. This in my opinion raises significant questions about the relationship between not having access to healthcare and being uninsured. On top of that, 80% of these people were employed (this number has likely fallen due to the Great Recession). As a direct result of this level of employment the average stay on the uninsured rolls was just under 5.3 months. The 45.7 million people represents about 15.3% of the US population, this percentage has remained fairly static since 1993 which may suggest that some of the people on the rolls are voluntarily uninsured (especially when considering the last fact). In this group of known uninsured people, 39% of those without insurance are between the ages of 18 and 39, the group least likely to have medical complications.
The Problem
Since 1999 premiums for a family of four have increased by about 120% and are now at levels which are becoming unmanageable for many Americans. This statistic is a bit misleading as a vast majority of insurance costs are carried by subsidies. Some estimates suggest that as much as 88% of total costs are incurred by a third party whether that be an insurance company, an employer, or the US government.
Due to the overwhelming costs increase on insurance and overall healthcare to both individuals and companies, America is also becoming less competitive. This was taken from the Washington Post in 2005 and the figures have since gotten worse:
"GM says health expenditures -- $1,525 per car produced; there is more than steel in a GM vehicle's price tag - [This is] one of the main reasons it lost $1.1 billion in the first quarter of 2005
[My Comment: Remember that in 2005 GM was on the cusp of breaking sales records by peddling 17.4 million cars and trucks. Also at this time GM's Asian competitors had input costs on cars built abroad of around $100 per vehicle.]
...GM says its burdens, negotiated with the United Auto Workers, put it at a $5 billion disadvantage against Toyota in the United States, because Japan's government, not Japanese employers, provides almost all in Japan. This reasoning could produce a push by much of corporate America for the federal government to assume more costs. This would be done in the name of "leveling the playing field" to produce competitive "fairness."
