Saturday, March 06, 2010

The Health Insurance Status Quo is Unsustainable

It's clear that under the status quo, or even under a Massachusetts-style plan, health insurance costs will increase at a rate faster than the economy, much faster than wages. Meanwhile, to "save costs", employers are shifting to cost-sharing plans and, most likley as a result, the "share of family income spent on health care grew from 5.3% to 5.9% in one year" - a similarly unsustainable rate of increase. I've heard it argued that people facing unaffordable rate hikes can seek cheaper insurance coverage but let's be honest - cheaper will almost invariably mean less, decreasing the amount you pay in premiums by increasing the amount you pay out of pocket - with no reason to believe it will affect either unsustainable rate of increase.

This problem extends to medical costs, as well. It extends to pretty much every area of government spending. And whatever sympathy I have for the argument that it's necessary to engage in significant deficit spending during a serious recession, or how deficit spending can be an investment or can be necessary to finance a transition from the status quo to something more sustainable, I have none for the argument that we should not presently be concerned with how our local, state and federal governments will get back on a sound fiscal track once the recession ends.

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