True Cost of Health Care and the Health Care Debate

The true cost of health care is often not well known by most people and its often difficult to see. 9 out of 10 people under 65 are covered by and employer plan. The cost is often split between the employer's share and the employee's share of the cost. While this is different for each company and has been changing in the last several years it can be 75/25% ER/EE split and cover just the employee cost or the family costs.

As an employee you tend to equate cost as your share of the premium where the employer will look at the total costs. This is often how many look at health care costs. The true cost of health care is made up mainly of claim costs plus the companies administrative cost. Insurance do such a good job of administration that it is less expensive for government plans to use the private sector such as medicare and medicaid. Even congresses very rich plan is in the private sector with a choice of plans and companies to choose from

Since claims can make up from 82 to 92% of the plan costs this is the area which needs to be looked at since even a small change can mean big dividends in lowering costs. An interesting fact is medicare which we have been told will be unable to continue sometime in the next several years because of rising cost. Now medicare was the first plan to set limits on its payements using DRG's and yet continues to expierence rising costs since the number of retiree's keeps growing and the age of retirees continue to rise, meaning more claims cost since aging means more medical issues as a natural process of aging.

PPO's and HMO's which also negotiate for contracts at better rates than the normal charges by providers continue show increased claim costs and therefore increased costs for benefits.

So whats the answer to these perplexing questions of costs and congresses lack of ability to address the real problems?

I believe real change means taking a long hard look at the issues, bringing together all parties to look at how they can contribute to a solution, and most of all some hard decissions that will not please everyone.

I would hope anything congress decides to do they include themselves in the solution which will mean they will protect us by protecting themselves.