- change ups
For every vehicle General Motors produces in the
"Our labor costs are significantly lower in
The twelvefold difference in health-care premiums between the for-profit
And U.S. companies not only pay more for health-care coverage than their Canadian counterparts, they also shoulder a larger share of the system's cost than their neighbors to the north — almost twice as much, in fact.
A 2003 study published in the New England Journal of Medicine reported administrative costs for the
Also in 2003, the
"We feel that for businesses to have an advantage,they can't be spending all this money on health-care costs," said Joel Segal, legislative assistant to Congressman John Conyers Jr.
Conyers introduced a bill earlier this year that would convert the nation's health-care system from for-profit to nonprofit and offer primary care, prevention, prescription drugs, emergency care and mental health services to everyone, including the 45 million Americans without coverage. The bill the Detroit Democrat introduced, HR 676, is similar to the one he tried to get through Congress two years ago.
"This bill is a Medicare-for-all plan. It would extend Medicare to everybody and it would save anywhere from $56 billion a year to maybe $286 billion, depending on what numbers you run. No co-pays, no deductibles — it would cover all medically necessary services. You would still go to your same physician and hospital; it just has to be a nonprofit," said Segal.
"It's just what they do everywhere in the world but here, basically," he added.
The bill, known as the United States National Health Insurance Act, proposes to lower health-care costs for employers. Segal said the cost reduction would be "dramatic," falling to about $1,600 a year for an employer to cover an employee with a family of four who earns $40,000 annually.
"That's because (the system) would be nonprofit-delivered and the overhead is going to be much less because the administrative costs are dramatically reduced under a national health insurance program. The administrative cost for Medicare runs about 3 percent. The rhetoric about government bureaucracy is not true with Medicare," said Segal.
Segal explained that Medicare keeps its overhead low because it doesn't do a lot of things that private insurers do. He said the government program doesn't hire lobbyists, doesn't run TV commercials, doesn't hire utilization reviewers that determine coverage, doesn't have a lot of money invested in flashy offices, doesn't pay its top executives millions each year, and doesn't offer stock options and bonuses.
"All that fat, that waste is why it costs so much money because (the system) is run like a business. Medicare is an efficient, cost-effective delivery system of care," said Segal.
Conyers' bill pays for the expansion of Medicare in a variety of ways. A few are cost-cutting measures such as reducing paperwork and requiring that medications be bought in bulk. Another calls for existing sources of government health-care revenue to be directed to the new system. The bill also would raise personal income taxes on the top 5 percent of income earners and institute a "small" tax on stock and bond transactions.
But the biggest revenue generator for the system would be a 6.6 percent payroll tax that would be evenly split between an employer and employee.
"So it's easy to figure out how much everyone is going to pay. If you're working, you just do the math: 3.3 percent — that is your contribution. That is why this thing is so easy to understand," said Segal.
"Everyone under our program would be fully covered, from cradle to grave. But ours is not a government-run program, though; the system still remains private. It's just that the insurance is public."
A Premium Price To Pay
In only one of the 11 years listed in the chart below did inflation rise higher than health-care premiums paid by
For those 11 years, the increase to employers in health-plan costs averaged 10.5 percent per year, or more than three times the hikes to inflation and workers' earnings. Over those same years, inflation grew by an average of 3.1 percent per year and employee earnings rose by an average of 3.3 percent.
The following chart compares the percentage increases for employer-paid health plans, overall inflation and workers' earnings for selected years from 1988 to 2004.
1988 1989 1990 1993 1996 1999 2000 2001 2002 2003 2004
Premiums 12.0 18.0 14.0 8.5 0.8 5.3 8.2 10.9 12.9 13.9 11.2
Inflation 3.9 5.1 4.7 3.2 2.9 2.3 3.1 3.3 1.6 2.2 2.3
Earnings 3.1 4.2 3.9 2.5 3.3 3.6 3.9 4.0 2.6 3.0 2.2
Source:The Henry J. Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2005.