Healthcare costs just keep rising

Kevin Drum passes along this report from the Los Angeles Times:

Five major insurers in California’s small-business market are raising rates 12% to 23% for firms with fewer than 50 employees, according to a survey by The Times.

….”We don’t have that money,” said Ann Terranova, a San Francisco financial planner who is dropping Blue Shield for herself and two employees after learning that their annual premium would jump to more than $19,000 a year from $11,000. 

….California insurers defend their rate hikes as sound and fair, saying they struggle to balance affordable rates with the need to remain competitive and turn a modest profit. Blue Shield, for example, said hospital charges rose nearly 20% last year, while physician costs and pharmaceutical fees increased almost as much. Anthem Blue Cross also cited the cost of medical care in explaining its average rate hikes of 13% this year.

You can look forward to a similar fate no matter where you live in the United States, meaning people will keep losing coverage or finding themselves paying ever higher premiums for less coverage.

Kevin writes:

Canada provides high quality healthcare for everyone — including small businesses and the elderly — for a cost per person of about $4,000 per year. Ditto for France and the Netherlands. Britain and Japan do it for about $3,000. Ann Terranova is being asked to pay more than $6,000 per person — and that’s for three working-age employees.

One way or another we have to deal with this. This year’s healthcare reform bill takes some small strides toward reining in costs, but they’re not nearly enough. We need to do far more, and if the private market won’t do it then eventually public opinion will force us to adopt a European-style system. If conservatives really understood this, they’d take the problem more seriously. But they don’t seem to.

I’m not sure it should really be left up to conservatives at this point. Liberals like Oregon’s Ron Wyden had the best ideas for healthcare reform that included market mechanisms to keep down costs. We don’t need the free market as a stand alone solution to healthcare reform (as many libertarians and conservatives suggest) any more than we need to nationalize healthcare, or even single-payer. Right now the ball is in the Democrats’ court, and they should seriously think about incorporating more of Wyden’s ideas into their new healthcare law as they tinker with the thing in coming years.

We should also talk about catastrophic coverage vouchers going out to the uninsured right now, and finding out some way to tie Medicaid to unemployment so that nobody goes without healthcare coverage between jobs.