Part 1 of this series took a look at family healthcare costs for people with "good" insurance -- better insurance, in fact, than most people will receive from the Affordable Care Act's health care exchanges. We found that these costs soared above those of other nations, and that they are rising at an unacceptably fast rate.
On average, an insured family of four now pays nearly ten thousand dollars for health insurance and medical care. That's more than it spends for groceries, and twice as much as it spends for gasoline.
So why would anybody want to make their plight worse?
Making Things Worse
The OECD studied personal expenditure on health care services for people with both above-average and below-average income in developed countries. They found that the costs for both groups were higher in the United States than in any other nation studied.
Both higher- and lower-income Americans reported a higher level of unmet medical need due to cost than did similar populations in any of the other developed countries.
Why, then, did the President break a campaign pledge and actively support the "health excise tax," commonly known as a "Cadillac tax," on high-cost health plans, since it will make those costs even higher for millions of Americans?
Cadillac Myths
This tax was based in part on a series of ill-advised health economists' myths, starting with the idea that people "consume" unnecessary medical services and that they'll stop doing so if they're required to share in the cost. That assumption was based on flawed research, including a decades-old RAND Corporation study that has since come in for serious questioning.
Here's another false assumption behind the tax: that plans with higher costs were more expensive because they had more generous benefits. A virtual flood of sound economic and actuarial studies found that generous benefits were a very minor factor in health plan costs. (Benefit "generosity" only accounted for 3.7 percent of the total, according to a study in Health Affairs.)
Punishing the Innocent
But, despite some modifications which the labor movement pressured the Administration into making (another unsung victory for the labor movement), the tax still punishes plans more for including sick people than it does for anything else. It punishes people for decisions made by their doctors, not them. It even punishes people for living in the wrong area.
The tax was also based on an even more fundamental misconception: that shifting costs from employers onto cash-strapped middle-class employees somehow "lowers" costs.
It doesn't. It just shifts them onto those who can least afford to pay them.
Bad News
Now, as the New York Times reports, employers are already making deep cuts to their benefit plans, and Americans are already seeing them in their deductibles and copayments. "The reality is it is going to hit more and more people over time, at least as currently written in law," said health economist Bradley Herring.
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