Fix Health Care, Fix The Economy

Earlier this week President Obama launched his campaign to reform the American health care system.  He is not off to a good start.  His White House appearance with representatives of various industry groups promised nothing more than baby steps toward cost-cutting.  It won’t be enough.

People who are relatively healthy and have decent insurance through their employers tend not to realize the catastrophic economic burden of major illness.  Consider, for instance, the plight of a middle-class family making a good income of $75,000.  If they are lucky, they can buy family coverage through the breadwinner’s employer for $10,000 a year.  If a family member has any kind of chronic illness, they will probably burn through deductibles and copayments of $3,000 or $5,000 in a year on top of the insurance premiums.

But that’s not all.  Insurance usually doesn’t cover over-the-counter medicines and supplies, which can be very expensive but are no less necessary.  Then there is the time spent going to doctors, making phone calls, pleading with insurance bureaucrats to fix their (many) mistakes.  (I am convinced, by the way, that health insurers have unwritten policies to reject a certain number of claims the first time they are filed.  Yes, they correct the mistakes when asked, but if these were just random errors some of them would be in the patient’s favor, right?  And they never are, in my experience.)

Then there is the mental anguish and loss of productivity that comes from dealing with illness.  This has a real economic impact.  Add it all up, and a middle-class family can easily spend 25% or more of its gross income on health care.  If you spend less, count yourself fortunate.  You are one of the lucky ones who actually has money left over at the end of the month.

Some 45 million Americans are uninsured, and millions more are under-insured.  Those who are struck with cancer or other extremely expensive conditions can exhaust their benefits very quickly, leaving them in the ranks of the uninsured.  Then they end up seeking treatment in emergency rooms – and being subsidized by everyone else, one way or the other.

A 2005 Harvard study found that fully half of all personal bankruptcies in the U.S. were due to unaffordable medical bills – and most of those people actually had health insurance.  Many pundits blame the economic downturn on people buying expensive homes.  That’s a problem, but it looks to me like health care is also a big problem.

We will not fix the economy unless we also fix health care.  The undeniable fact is that the health-care system in the U.S. is extremely expensive and inefficient.  It needs to be reformed.  President Obama has ideas that may turn out to be unwise, but we can be 100% sure that this problem will not solve itself.

We’re going to have a national debate on health care this year.  Bring it on.  Doing nothing is not an option.