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No easy fix for health care reform
By Gary O'Connor
Contributor
Published September 22, 2009
I read with great interest the article in the Sept. 13 paper on the Lamar County’s 2009-2010 budget, because it illustrates very clearly the need for health care reform and the cost of failure to reform.
The county’s projected total budget for the next fiscal year is $20 million. Of that, $1.9 million is allocated for employee health insurance and another $800,000 for the indigent health care fund. That means that 13.5 percent of the total budget is allocated to health care. The $1.9 million represents an increase of 15 percent over last year’s cost, and for less comprehensive coverage.
For perspective, remember that overall inflation has been running around 3 percent, and core inflation less than that. The increase in insurance cost is 5 times overall inflation for the coming year. Five years ago, health insurance cost for the county was $1.1 million. Where does that additional money come from? Two sources: less money in employee disposable income due to smaller wage increases, higher co-pays and higher employee premium costs, and higher taxes. Were it not for the addition of $139 million in additional tax base from the new pipelines, a tax increase would have been required to pay for poorer quality insurance.
The county’s insurance actuaries have indicated that the county should plan for a 10 to 20 percent annual increase for the foreseeable future. That means that in five years with no other changes, health care costs for the county will be $4 million, or 20 percent of the budget. I’m sure the situation for all taxpayer funded public entities is similar.
Those who are fortunate enough to have employer paid health insurance seem insulated to a great extent to the ravages of cost increases because the additional costs are absorbed by their employers. The truth is that the increased costs are passed through — either in higher prices for the product or service or in smaller raises for the employees or in higher co-pays or deductibles. The cost of health insurance is part of employee compensation.
There is no great fairy in the sky to absorb these costs. Everyone — employee, consumer and taxpayer — pays — and loses.
As I stated in an earlier column, there is no easy, gradual fix. We must have a combination of medical care consumer responsibility, cost containment/reduction, reasonable tort reform, mandatory coverage for everyone, and availability of coverage for everyone in order to reign in the spiraling costs.
Contrary to what some on the political right would have us believe, this does not require socialism. It does require a good faith effort from all parties involved in health care finance and delivery. If every group is willing to cooperate and to take a slightly smaller piece of the pie, we can create a uniquely American solution. If there is no cooperation, the health care delivery/finance system will bankrupt individuals and governments alike. This is not the time for ideological bickering; it is time for good faith negotiation.
Gary O’Connor is a long-time Lamar County resident, works in the insurance industry and is active in community organizations.
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