Johnathan Cohn, Balancing Act

Johnathan Cohn, Balancing Act - economics that dictates the...

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Cohn, Balancing Act I. Can we afford t spend so much on healthcare? As a society, “yes”—as individuals “no” A. Health Research and Education Trust survey--tells how much workers are 1. Workers are directing a greater share of incomes toward health insurance a. Premiums went up by less than they did last year b. But, they still went up at twice the rate of inflation AND faster than the rate of workers’ paychecks B. announcement of Wal-Mart to offer coverage w/ high deductibles, including a a Health Savings Account option II. What do does the Kaiser Family Health Research & Education Trust survey have to do with Wal-mart’s high deductible insurance? A. High price of insurance- Reason insurance is getting more expensive is b/c medical care is getting more expensive 1. Back in early 1930s, U.S. spent 4% of its GDP on health care 2. As of 2005, it was up to 16% of gross domestic product 3. Despite these stats, our health system could still be sustainable. No law of
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Unformatted text preview: economics that dictates the appropriate share of GDP and any wealthy nation can choose to spend a large share of its income on medical care instead on something else a. Cutler believes that the money spent on medicine has been worth it— and advancements in neonatal care and cardiac treatment justify their expenses B. Wal-Mart examples (raises the question of what we as individuals can afford to spend on health care vs. the state’s capacity) 1. Higher deductibles translate to shifting the cost of medical care back onto individuals 2. What will happen? Insurance premiums go down & out-of-pocket responsibility goes up a. in form of deductibles, co-payments b. for people w/o serious health problems, this will mean savings c. but for those who are very sick will end up paying more i. “financial penalty for being sick will grow” 3. “As insurance protection recedes, the individual exposure will increase, point where illness could cost somebody a 1/3 or ½ of income!...
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