Analysis: You Have No Idea What Health Costs

The most important health-care document released this week was not Sen. Max Baucus's Healthy Future Act. It was the Kaiser Family Foundation's 2009 Employer Benefits Survey.

While the proposal by Baucus, chairman of the Senate Finance Committee, outlines a direction for policy, the survey, which polls employers about health benefits to assemble a detailed look at the actual cost of health care, fits it squarely in our pocketbooks.

The truth is we all pay, and much more than we recognize, for health care.

For many, it's among the largest investments we'll make, on par, even, with the money we spend on a house or tuck away for retirement. But while it's easy to track our stock portfolios as they tank along with the market, our outlay for health care is less obvious. Employers pay some, and so do individuals, and taxpayers. And some even hides behind the deficit. As such, few of us see the full picture. But to make sense of the proposals for reform, getting a grasp of the cost is critical.

The average health-care coverage for the average family now costs $13,375, according to Kaiser. Over the past decade, premiums have increased by 138 percent. And if the trend continues, by 2019 the average family plan will cost $30,083.

Three years of slightly above-average health insurance will cost a solid six figures.

Those are numbers to marvel at. Those are numbers to fear. But they are not the numbers that loom in the minds of most Americans. And therein lies the problem for health-care reform.

About 160 million Americans receive health coverage through their employers. In general, the employer picks up 73 percent of the tab. This seems like a good deal. In reality, that money comes out of wages.

As Ezekiel Emanuel, who advises Office of Management and Budget Director Peter Orszag on health-care policy, has pointed out, health-care premiums have risen by 300 percent over the past 30 years (and that's after adjusting for inflation). Corporate profit per employee has soared by 200 percent. Hourly earnings for workers, adjusted for inflation, have fallen. The wage increases have been consumed by health-care costs.

Another 80 million Americans are on public plans, mainly Medicare and Medicaid. Those costs are paid by taxpayers. And about 46 million Americans are uninsured. The costs for their care are shifted to the insured: This raises premiums for the average family by $1,100 each year, according to an analysis by Ben Furnas and Peter Harbage of the Center for American Progress.

Imagine if people who touched a hot stove felt only a small fraction of the pain from the burn. That's pretty much what's happening in our health-care system. It hurts enough that we would prefer it to stop, but the urgency is lost.

Read it all at the Washington Post.