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September 10, 2003

No Inflation? Look at Health Ins.

It's good that prices at Wal-Mart aren't going up -- although to the extent that this reflects close-to slave labor in China and lost jobs in the US, it's a pretty mixed blessing.

But in the real lives of working people, all this talk about "no inflation" is a joke as employers have increasingly passed the cost of health care onto them. Out-of-pocket, working families are seeing massive increases in health costs.

People in employer-sponsored health plans are paying 48 percent more out of their own pockets for care than they did three years ago, according to an authoritative new study [by the Kaiser Foundation], and the cost will be even higher next year... Out-of-pocket spending for insurance premiums, deductibles and drug co-payments rose to $2,790 this year for a typical employee with family coverage, from $1,890 in 2000.
That's a $900 per year increase!

And for older workers and retirees who use health care more and pay a higher percentage of the deductibles and copays, the official inflation rate is a joke. The usually quoted Consumer Price Index (CPI-W) is focused on a market basket of goods used by younger workers. But throughout the 1990s, the CPI-E (using a marketplace of goods used by older workers) consistently was higher because of the increasing costs of medical goods. Some Congressmen have pushed for legislation to use the CPI-E as the basis for increasing Social Security benefits each year because of this ludicrous system of measuring inflation as it effects older folks.

But the whole issue shows what a joke Bush's tax cuts are for most people-- the real costs of health care are soaring and he has no plan to help them out. So the tiny portion of tax cuts actually going to working families are de facto just being pumped back into the profit margins of pharmaceutical companies and outrageous health care CEO salaries.

Posted by Nathan at September 10, 2003 06:56 AM