Increase Marks the Beginning of the End of Health Care System
Santa Monica, CA — A report released today that found the cost of health insurance for family coverage is now more than the annual salary of a minimum-wage worker is the “signal that out-of-control health insurance profiteering will reduce health care to a commodity that only the wealthy can afford,” according to the Foundation for Taxpayer and Consumer Rights (FTCR).
“The U.S. is experiencing the health care equivalent of bread lines while HMO profits skyrocket and top executives receive 9-figure golden parachutes. The fact that working families can no longer afford the price of health insurance should be a wake-up call to politicians who have allowed private health insurers to drive the health insurance system into the ground,” said Jerry Flanagan of FTCR. “Continued rate increases mark the the beginning of the end of the health care system as we know it because patients won’t stand for further cutbacks and employers can no longer shift costs on to workers.”
Private health insurers take up to 25% of the premiums they collect for overhead, executive salaries, advertising and profit. As a result, patients spend more for less care. In comparison, the Medicare program that provides health care for seniors spends about 3% on overhead.
“HMOs use phony arguments that blame huge premium increases on the cost of providing medical care. What the HMOs can’t explain is why premiums are increasing twice as fast as hospital and physician rates. Real reform must require HMOs to put more of the premium dollar they collect into hands-on patient care not into advertising, administration, executive salaries, and profit,” said Flanagan.
The Kaiser Family Foundation report found that health care premiums are increasing 2.5 times faster than inflation and 3 times faster than workers earnings. As a result, the cost of family health insurance coverage for one year rose to $10,880 in 2005. Minimum-wage, full-time worker income for one year is $10,712. The report also found that the number of employers that offer health insurance fell to 60% — a 10% reduction since 2000.
FTCR recently launched a new Internet campaign complete with flash video animation targeting excessive health insurance costs in the wake of a recent merger that created the nation’s largest health insurer, WellPoint, and awarded former Blue Cross of California CEO Leonard Schaeffer $250 million in cash and stock. Click here to watch the animation.
– 30 –
The Foundation for Taxpayer and Consumer Rights (FTCR) is California’s leading nonpartisan consumer advocacy organization.