Voters shielded from high health costs don’t see the residual impact

The health care issue has a history of being named by voters as one of the biggest problems we face — until the problem de jour comes along and pushes it off the list. In 2008, that seems to be happening again with the economic downturn, the mortgage mess, and $4 gas surpassing health care as the big issues.

When asked to name the most important financial problem facing families today by the Gallup organization:

    * 29% said energy and gas prices    * 18% said the high cost of living and inflation    * 14% said a lack of money and low wages    * 9% said health care costs

Policy experts can point to the high cost of health care but Joe and Mary Middle- America are still clearly sheltered from the real impact of these costs largely by the employers who still provide so many of us with affordable health care.

It’s true the ranks of the uninsured are growing with the unemployment rate, and the number of people getting health insurance from small employers has been on a long decline. But the fact is that the vast majority of Americans still get very good health insurance from mid-size and large employers. And, what cost shifting has occurred has been relatively modest.

Last year’s Kaiser Family survey of employer-provided health insurance found:

  • Health insurance coverage at larger employers is stable – In 1999, 99% of employers with more than 200 employees offered health insurance–that number was also 99% in 2007.
  • Cost shifting has been only modest – In 2001, workers at larger firms (over 200 employees) contributed 4.4% of the cost of their coverage as a percent of their income–in 2007 they contributed an average of 6.9% of the cost of their coverage as a percent of their income.
  • Consumer-driven plans remain a very small part of the market. More than ten years after MSAs became available, and five years after HSAs were expanded by the MMA, between 3% and 5% of workers are in various forms of these and high-deductible plans.

Most workers are still sheltered from the reality of health care costs, and they equate health care quality with access to whatever they want.

Conservatives, including John McCain, argue that we need to move away from third-party pay to a health care system that stresses individual responsibility so consumers can better understand the problems of high cost and respond with more efficient choices. Makes sense.

But to get that kind of far-reaching change it will take a groundswell of major support from voters.

Ironically, voters aren’t going to be interested in supporting that kind of change if they remain sheltered from the problem.

It’s a "catch-22"–conservatives believe we need voters to realize they need to be more sensitive to health care costs but to sensitize them voters have to be willing to let policymakers take their rich benefits away.

Voters sure don’t have a lot of incentive right now to give up those still rich employer plans.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. You can read more of his thoughtful analysis of health care industry trends at The Health Policy and Marketplace Blog.

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5 replies »

  1. We’re saving our members hundreds of millions of dollars in supplemental healthcare benefits since 1992. Our company offers a service that is helping individuals and families across the country save precious dollars on their costly healthcare needs.

  2. The lack of voter foresight is as rampant as lack of political foresight. People usually live for the now and can’t see more than month or two down the road. Add to that a total lack of a sense of community in this country and we will continue to manage by crisis. Take the current view of voters that gas prices are the problem, when in actual fact they are the solution. The real problem is oil revenue is going outside the country and not being used to fund energy efficiency, conservation, alternative energy and global warming abatement in this country. I hope your children have plenty of money because they will end up paying for what you don’t want to spend for now.

  3. During almost every Presidential election cycle, liberal health policy wonks (primarily the ones that favor a governmental takeover of health care) trot out poll after poll showing strong support for raising taxes to fund universal coverage. Invariably, once the election is over; and health reform has failed as a decisive election-year issue, the same policy wonks shake their heads in disbelief and lament “what happened to health care in this past election?” This has probably been occurring every few years since the Truman Administration.
    I explain this as a classic example of revealed preferences versus stated preferences. When pollsters ask ordinary people about weighty issues, such as covering the uninsured, people respond in the way they assume a smart (or benevolent) person would respond. But, when it comes to voting, their vote is often swayed by hot button issues unrelated to health care. Furthermore, if people were completely honest, many would acknowledge that they are unwilling to give up the current system of health care benefits they have come to appreciate. I suspect most aren’t worried about the uninsured enough to actually be willing to pay higher taxes – although most would probably be fine taxing “someone else” to cover the uninsured.

  4. Polling data suggests the saliency of health care (really health costs if you look closely) has plummeted in the past year as the general economy has deteriorated.
    It was #1 in many polls re: domestic policy concerns a year ago. Theory: it is a stalking horse for broader economic concerns. Remember only 5% or so of the public has a problem requiring (gulp) hospitalization in a year, so the major economic stresses hit a relatively small group of people hard at any one time.
    Large group coverage has dampened the public response, but (surprise) that’s where the job losses from this recession are occurring. The deterioration of coverage, as Bob knows, has occurred at the small group end, with a something like 20% drop in the number of small firms offering coverage in the past eight years. 45% of uninsured workers work at firms smaller than 25 employees.
    The policy community watches two things: the Census estimates of the # of uninsured and the CMS Actuary’s spending numbers and there is a galvanic skin response every year either number moves up- it’s just like clockwork. The response is muted when GDP stays flat (as it did for nearly eight years in a row in the 1990’s, or nearly five years this decade). Watch the policy types and editorial writers go BERSERK when the 2008 GDP #’s are released (early 2010).
    There will be a big jump (maybe to 16.5% or more) due to a funky denominator
    (GDP) and a modest up move in the numerator. And yet again, the healthcare crisis will be rediscovered.
    Health costs are a chronic illness that flares up periodically. Its chronicity is what prevents a coherent political response.