Personally paying for health costs would be best fix

By Freedom New Mexico

America is rushing to a pivotal decision that could dictate the nature of health care for decades to come. Escalating costs, rising consumer demand, coupled with employers reducing benefits are creating widespread unease.

These and related converging factors guarantee change is coming. The question is whether Americans will succumb to the lure of government as rescuer, or will individuals and private organizations assume more responsibility for coverage, treatment and care.

At stake is whether this nation will resemble European-style socialized medicine with its unaccountable bureaucrats making decisions about whom can be treated, as well as what type of treatment, when it will be provided, where and how much.

Those socialized systems, touted as “free” and “universal,” ultimately can’t keep up with demand when the public insists on receiving every type of care. Eventually, it results in shortages and rationing.

In the U.S., similar government solutions are touted by presidential candidates promising to make health care a “right,” and to deliver that “right” by forcing those who receive it to pay high, additional taxes and hand over control to government overseers.

But government as rescuer isn’t the only choice. Out of Detroit last month came a glimmer of hope that personal responsibility in the private sector may yet prevail as a result of United Auto Workers and General Motors’ labor negotiations.

Ironically, the UAW was a pioneer in winning contractual health-care benefits from employers in 1950, taking advantage of tax incentives created for employers during World War II to compensate for wage controls imposed during the war.

UAW’s health benefits expanded over the years to include full coverage for employees, even into retirement and for spouses.

Accumulating billions of dollars in liabilities prompted the UAW and GM to agree to relieve the employer of that burden before it’s bankrupted.

The agreement calls for an independent trust to provide health coverage to union retirees and spouses, with GM putting up to $35 billion into the fund. But it will be up to the trust to set and manage benefits, something like a private 401(k) pension plan.

The agreement, noted the Wall Street Journal, “is the most striking example of a bigger trend sweeping U.S. health care: employers renouncing their decades-old role as chief health-care buyer.”

Just 60 percent of companies provide health benefits today compared to 69 percent seven years ago, as employers continue scaling back coverage and even penalizing higher risk employees with high blood pressure or cholesterol by adding insurance surcharges.

Shifting responsibility for managing health care one step closer to the private parties who receive it, as the UAW’s private trust seems to do, may bode well for market restraints on the system.

Even though annual rate of growth for employer-sponsored costs continue to out-pace inflation and wages, it’s encouraging that the increase in the rate grew more slowly last year.

The slowing is attributed partly to consumers “paying more of the costs out of their own pocket,” Drew Altman, president of the nonprofit research group, Kaiser Family Foundation, told The Los Angeles Times. “This is more a story about costs shifting than costs really going down.”

The first step to curb prices is to make the people receiving the benefit more directly responsible for paying for it, whether that be through individually owned health insurance, health savings accounts or simply savings.

Personal responsibility may be coming to the fore. It’s none too late.