Reinhardt on Why the Government Will Need More of Your Money
Healthcare costs are rising faster than our incomes
Posted Sep 03, 2013
Uwe Reinhardt has an interesting post, pointing out something we have often referenced at this blog:
- Health care costs are rising faster than our incomes.
- The average premium (at $5,884 for individuals and $16,351 for families) is already out of reach for low-income families and will become out of reach for more and more families over time.
- So therefore we must…What?
This central political dilemma in American health policy—leave health care to those who can afford it or increase tax revenues to broaden coverage—will continue as far as the eye can see. A good part of the current shouting match over the Affordable Care Act expresses anger over this dilemma, and it will not subside even after the act has been fully put in place.
Of course neither choice will be possible once health care consumes all of GDP.
Ah, but are those really the only two choices today? One thing Uwe neglects to mention: the typical private health insurance plan allows you to see just about any doctor and enter just about any hospital and has all of the inefficiencies that third-party payment is able to generate. But new enrollees to Medicaid (where there are fewer choices and there is rationing by waiting) are expected to cost half of the numbers given above. And, we have previously seen powerful evidence that when patients control the marginal dollars instead of third-party payers, costs begin to plunge―quickly.
For more, please see my book, Priceless: Curing the Healthcare Crisis.[Cross-posted at John Goodman's Health Policy Blog]