Cost of Care: It'll Get You Coming and Going

Affordability is one of the big bugaboos of health care in modern America -- one that is getting steadily increasing amounts of media coverage as the serious part of the Presidential campaign ramps up. Michael A. Fletcher of The Washington Post takes a look at at the impact of these skyrocketing cost on the average working class citizens of the United States:

"The way health-care costs have soared is unbelievable," said Katherine Taylor, a vice president for Local 1199 of the Service Employees International Union. "There are people out here making decisions about whether to keep their lights on or buy a prescription."

Since 2001, premiums for family health coverage have increased 78 percent, according to a 2007 report by the Kaiser Family Foundation. Premiums averaged $12,106, of which workers paid $3,281, according to the report.

Fletcher goes on to examine the cost outlay businesses must factor in when providing health care is part of their equation, and why this is making many businesses cease offering it altogether. All in all, his opening sentence offers an encapsulated view of the issue, "Recent history has not been kind to working-class Americans, who were down on the economy long before the word recession was uttered."

So, if you manage to survive your working career without going bankrupt from health care related costs you should be in good shape, right? Wrong. If you do some digging you can find this informative little gem on Investment News (co-authored by Alicia H. Munnell, Mauricio Soto, Anthony Webb, Francesca Golub-sass and Dan Muldoon) about the National Retirement Risk Index (NRRI):

The results show that once health care is considered explicitly, the percent-age of households that will be "at risk" [of being unable to maintain their standard of living in retirement] rises from 44% to 61%. As always, the percentage "at risk" is greater for those at the low end of the income distribution. And later cohorts show more "at risk" than earlier ones due to the combined effect of a contracting retirement income system and continually rising health-care requirements.[...] Because health-care costs are rising rapidly and the income system is contracting, a much larger percentage of later cohorts will be "at risk" than earlier ones. The NRRI rises from 50% for early boomers to 68% for Generation Xers.

Seems like the cost factor has got you both coming and going. This is a clarion call for systemic reform.

SOURCE: "Rising Health Costs Cut Into Wages: Higher Fees Squeeze Employers, Workers" 03/24/08
SOURCE: "Health-care costs drive up the National Retirement Risk Index" 03/24/08
photo courtesy of Carlos Madrigal, used under this Creative Commons license