BY MIKE RYAN
It is that time again – budget season. We have to think about those “raises” they ask for, and we give them, year after year.
Some people think these “raises” are a reason we do not compete as effectively internationally. Why do they ask for, and receive, “raises” far in excess of cost of living increases, year after year? Actually, we work hard to keep the “raise” as low as possible and feel fortunate if the “raise” we give them is below 10%. Do you get a 10% “raise” year after year?
Local elected officials are powerless against these organized forces.
You know who I am talking about, right?
No, not teachers, police officers, firefighters or city employees.
No, not the unions.
I am talking about the health insurance industry.
Health Insurance Costs Skyrocket
Nationally, over the past decade, increases in health insurance costs, or “raises”, have ranged from 7% to over 15% annually, depending upon the type of plan and which report you read.
Since 1999, it has been reported that premiums for families have gone up 168%!
We are forced to give them “raises” year after year.
Over the past 20 years, annual increases of health insurance costs in the U.S. exceed the experience in virtually every other industrialized country. No matter the comparison method, we are at or near the highest levels –as a percentage or dollar increases in relation to GDP, various per capita comparisons, etc. Change the analysis any which way and the conclusion is the same.
Companies Make Big Profits
At the same time, it has been reported that the health insurance industry achieves record profits. In 2009, it was reported the insurance industry recorded 56% increase in profits; in 2011, again, it was reported the insurance industry achieved record profits.
This phenomenon of huge profits is not a single year anomaly. These profits are not simply because of a bizarrely successful year of quality underwriting or extraordinary utilization containment. Instead, these profits are the trend. Health care costs rise at astronomical rates, far outpacing inflation, GDP growth or any reasonable metric for increase, and the industry reaps record profits.
If we gave police officers, teachers, firefighters or employees raises at 15% or 12% or even 10% year after year, taxpayers would storm “city hall”. Yet, we are virtually powerless to avoid giving the health insurance industry such “raises”.
Employees cooperatively agree to contribute more, change deductibles, blend rates, use HMO rates as a base, “thinning coverage” and other cost savings strategies. Concessions by our employees help keep costs down and make the insurance industry “raises” less painful to the taxpayers.
But, the industry keeps asking for more and more.
For cities, taxpayers, families, and businesses, we must find a way to provide quality, economical and dignified comprehensive health care, focused on prevention and intervention, without outpacing the cost of living increases or inflation.
If this cannot be solved nationally or statewide, then we must find an innovative method locally to control the “raises” we give the health insurance industry year after year.
Our taxpayers and employees deserve better.
(Michael Ryan was elected mayor of Sunrise in August, 2010)
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