What this article is missing is more about how insurance companies already ration your options but still, this is full of good information related to the health care reform debate. Of particular interest is the point being made about the link between health care cost increases and decreasing employee compensation. Even the Democrats in Congress don't want to review all of this because that would disrupt their efforts to find a bipartisan solution that works for the insurance industry but less so for actual voters. It's worth your time to read the full article, but here's the portion related to compensation declines.
The rapid rise in medical costs has put many employers in a tough spot. They have had to pay much higher insurance premiums, which have increased their labor costs. To make up for these increases, many have given meager pay raises.
This tradeoff is often explicit during contract negotiations between a company and a labor union. For nonunionized workers, the tradeoff tends to be invisible. It happens behind closed doors in the human resources department. But it still happens.
Research by Katherine Baicker and Amitabh Chandra of Harvard has found that, on average, a 10 percent increase in health premiums leads to a 2.3 percent decline in inflation-adjusted pay. Victor Fuchs, a Stanford economist, and Ezekiel Emanuel, an oncologist now in the Obama administration, published an article in The Journal of the American Medical Association last year that nicely captured the tradeoff. When health costs have grown fastest over the last two decades, they wrote, wages have grown slowest, and vice versa.
So when middle-class families complain about being stretched thin, they’re really complaining about rationing. Our expensive, inefficient health care system is eating up money that could otherwise pay for a mortgage, a car, a vacation or college tuition.
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