Wednesday, December 10, 2008

Exploding Health Care Expenses In The United States

Let's take this back a bit starting from 1960, about 48 percent of health care expenses were paid out-of-pocket by individuals and the balance came from insurance and government programs. I can say this statement is true. Thinking back of when my mother and I use to talk about the story of when she had given birth to her three daughters and how much my father complained about the hospital bill.

After the birth of the last daughter which was myself, the bill total was $60.00. You may not think of it as being much but for my parents, it was a lot. Keep in mind that I'm referring back to the 60s'. Today, the Federal Government decided to drive down the 22 percent uninsured rate to zero by creating two massive programs. In 1965, Congress created Medicare to pay for health care for those who are 65 or older. Than they created Medicaid to purchase health care for those considered to be low-income. Immediately thereafter, health care spending had spiraled higher at double digit rates.

In 1965, Congress predicted that by 1990, Medicare spending would spike to $9 billion a year. Instead, Medicare spent $57 billion in 1990. I think who ever made that prediction was looking through a defected crystal ball. More than $408 billion was spent in 2006 alone. This is what happens when health care is "Free" or nearly Free to those who use its services. By trying to solve the health care crisis of the 1960s, Congress created the health care crisis of the 1970s, so it created what we all know to be Health Maintenance Organizations (HMO).

It made the crisis worse if not better. As spending continued its rapid growth and HMO and insurance premiums began to follow. This bring us to today and where we stand in the crisis of health care. By 2005, only 12.5 percent of health care was paid out-of-pocket. The government spent 45 percent of the health care dollar to buy services for 25 percent of the people. Most of the remaining 75 percent of the people had their health care expenses paid by someone else, primarily health insurance, usually purchased for them in part or in whole by their employers. How could this be? We were told there are 47 million uninsured (although the U.S. census Bureau confesses that it has been miscounting for at least five years). Health care spending has continued to soar to just more than $2 trillion a year representing 18 percent of the Gross Domestic Product. This kind of spending has driven the cost of health insurance higher.

There is an up side to all of this and that is the choices and decisions we make in life. When it comes to our health and the health of our children, we have to make sound decisions regarding whats best for the family. We can continue to pay out-of-pocket for services rendered at an emergency care unit or have you turned away because of the type of insurance you have that does not cover most procedures or treatments. So what's the solution you ask? With a newly Elected President in position, we can only wait and see in the next couple of years how the crisis of health care in the United States shall come to be.


BJ said...

This is a very informative post. Thanks.

Karlyn said...

Thank you BJ for viewing my blog. The issue of Health Care is very important to me and I wanted to let others know that this is serious. Please feel free to visit my blog site anytime. Please share with a friend.

Laurie Brenner said...

You are a blessing for providing this kind of information. Thanks for the invite - and your post.

Karlyn said...

Thank you Laurie for sharing your comment. The reason for this type of information, is to give awareness of what is happening to so many of us who are in the cross fire of this ongoing issue of health care. I'm glad to know that people like yourself appreciate this information.

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Karlyn said...

Thank you Sarah for viewing my blog. I'm happy to know that people like yourself enjoyed reading my blog. Please feel free to stop by again, there is much more to come.