The Media and Politics world really, really, really is trying hard to put this in front of you today. Gas prices are skyrocketing, and it is up to the President to save us. And he’s not doing it. So we need to debate it. Really.
There’s a war of words over energy policy going on right now. It comes down to the taxpayers giving money to big oil or spending more on exploring new technology for renewable energy. We could easily spend a whole post looking at how much hypocrisy is laden in the conservative proponents of the free market railing against the market setting the price for oil and gas and clamoring for the government to intervene to bring gas prices down. And how in 2008, those same conservatives said that the president has no power to control gas prices.
Instead, let’s take a look at some charts to see that gas is actually not what’s costing Americans the most. It is what they notice the most, because they pay for it at the pumps. But the majority of the money they pay in healthcare is a strange deduction that vanishes from their paycheck almost unseen and is called a benefit by the providers of the insurance and the employer.
here are some relatively recent price graphs of world crude oil, showing this is following a curve of about 30% a year:
ok, now, let’s look at the slope of that curve above and compare it to the slope of the curve for health care spending in the U.S. per capita.
Now, why is the price of oil going up? Supply and demand. Yay! Free market! No government intervention! Woohoo! Capitalism!
We are basically at or about peak oil production right now. Any further oil exploration requires massive subsidization to be able to bring it to market at price point where the oil producers can maintain their current profit margins. Tar sands, off shore drilling, all those resources require higher risk to capitalize, so the oil companies go to the government and ask for infrastructure subsidization. The public pays for the infrastructure expense, so companies can profit. How is that free market and small government? Honestly, I don’t see it.
And, even more. When we adjust for inflation, it turns out that the price of gas – by the time the average consumer pays for it – is pretty steady.
There’s a big piece of information in there. The average household spends 3.4% of their expenses on gas, roughly $2,132 a year.
On the other hand, that same average household spends more than $13,700 a year on their employee share of their health care premium. And even a single payer pays more than twice in healthcare than they do in gas.
And that healthcare portion of household expenses is now more than 16.6% of the bill.
And while we sit here and have talks about jobs and costs to the economy, let’s look at how employers are affording their share of the rising costs of health care.
That graph is a little harder to read, but it shows that employers are controlling health care costs by pushing them off to the employee. (Need a second opinion, look here) The worker’s contribution to premiums is going up, and at the same time, the copays at the doctor’s office is going up. You don’t usually feel your healthplan’s dedcution after you get used to it being taken from your paycheck — just like a private payroll tax. But you do notice your copays. And you know how frustrating the user experience of trying to get money back from your private healthcare insurance provider is.
But the cost of your private health insurance is absolutely outpacing all other parts of your expenses, and it is growing faster than inflation. It is killing jobs and wiping out small employers. Employers are able to manage their rising percentage increase of employee healthcare cost share by balancing a strategy of managing the size of their workforce and pushing the costs over to the employee. But the healthcare insurance industry is making it coming and going.
An estimated 40 percent of Americans went without treatment last year, because of high costs. Do you think 40 percent of Americans are going to give up their cars this year because of these high gas prices? If they did, we wouldn’t really need to worry about the whole energy issue or that climate change problem either. Let’s look at that graph one more time.
Don’t let the rhetoric and talking points fool you. Healthcare isn’t socialized, oil production is. And that’s just plain messed up. Especially when Big Oil is making record profits and sitting on huge cash reserves. While the rest of the economy suffers, and more citizens struggle with their healthcare costs and lack of healthcare, let’s make sure we give Big Oil our tax dollars. How does it feel to underwrite corporate profits?
Want more information? Check out this report from the Bureau of Labor Statistics (pdf) on employer costs for health care. Or you can look at the Kaiser Foundation’s reports on health insurance costs for people. Or here’s a pdf from UC Berkeley about California health care costs. Or you could just look at this graph that shows how much of your paycheck is going to your health insurance company instead of you:
That’s right, one quarter of your pay goes to the health insurance company. ONE QUARTER. But, honestly, it makes me kind of sick to think about that.