by Carla Dolce
HUERFANO- This is the second part of a four-part series on health care reform. Last week we saw how our current system leaves about 47 million in the U.S. with no health care coverage, including about 1,800 Huerfano County residents, and how this lack of coverage is responsible for over 18,000 deaths each year. This coverage gap and consequent loss of lives are often cited by progressive liberals in support of health care reform. Conservatives, however, are also advocating for an overhaul of the system but for different reasons. As Senator McCain notes on his website, “bringing costs under control is the only way to … allow our companies to effectively compete around the world.” Skyrocketing medical care costs are bringing businesses – large and small — to their knees.
How high are these skyrocketing costs? According to the non-partisan Kaiser Family Foundation, the cost for health care in the U.S. in 2007 was $7,500 per person – more than twice the average of other industrialized countries. Health care costs in the U.S. are the highest in the world and are rising rapidly, outpacing general inflation. Per person spending on health care increased 77% from 1995 to 2005 while cumulative inflation was 26.9%. Insurance premiums have risen even faster.
Everyone agrees that our escalating health care costs are unsustainable and are unquestionably affecting the competitiveness of American businesses. According to a study released this year by the New America Foundation (NAF), U.S. manufacturers pay $2.38 an hour for health benefits, while manufacturers among America’s major trading partners pay only $0.96 an hour on average. Ohio State University′s Center for Occupational Health in Automotive Manufacturing says that the “Big 3 auto production companies spend more for health care than they do on steel, and health care costs are approaching $2000 per vehicle produced.”(www.coham.osu.edu)
Since corporations are obligated by law to act in the best interests of their shareholders ( i.e., maximize profits), they′ve reacted to rising health care costs by doing everything from reducing employee wages and health benefits to moving manufacturing facilities overseas. According to the NAF, these strategies work for the long run but are not effective in the short run because of institutional constraints like union contracts and minimum wage laws. Competition from foreign manufacturers makes passing escalating health care costs on to consumers unrealistic. The net result is that U.S. businesses, and manufacturing in particular, remain at a competitive disadvantage in the global market place.
Of course, this only applies to businesses that offer health benefits to employees. According to the Kaiser Family Foundation, the percentage of employers offering health benefits declined from 69% in 2000 to 60% in 2007. Among firms with 3 to 9 workers, the percentage offering health benefits dropped from 57% in 2000 to 45% in 2007.
Nearly all of Huerfano County′s privately owned small businesses are in the majority — not offering health benefits. As Don and Mitzi Keairns, owners of Charlie′s Market in La Veta, will tell you, “It′s too expensive. ” After paying the high cost of workers compensation insurance each month, they couldn′t stay in business if they also had to pay for health insurance for their thirteen mostly part-time employees.
While larger businesses providing health benefits to employees are screaming for relief from the burden of increasing costs, individual Americans are staying awake at night worrying about whether they should take the risk of not seeing the doctor for that persistent headache versus the risk of seeing the doctor and not having the money to pay. Ask just about any of the county′s 1,800 uninsured how they resolve this dilema and you′ll likely get the answer, “I don′t go to the doctor.”
How do rising health care costs and this individual strategy for dealing with such costs affect us in Huerfano County? Stay tuned for Part III!