Healthcare Costs Going Up, Up, Up

| Thu May 27, 2010 11:50 AM EDT

The Los Angeles Times reports today on enormous rate hikes for small businesses in the health insurance market:

Five major insurers in California's small-business market are raising rates 12% to 23% for firms with fewer than 50 employees, according to a survey by The Times.

...."We don't have that money," said Ann Terranova, a San Francisco financial planner who is dropping Blue Shield for herself and two employees after learning that their annual premium would jump to more than $19,000 a year from $11,000. 

....California insurers defend their rate hikes as sound and fair, saying they struggle to balance affordable rates with the need to remain competitive and turn a modest profit. Blue Shield, for example, said hospital charges rose nearly 20% last year, while physician costs and pharmaceutical fees increased almost as much. Anthem Blue Cross also cited the cost of medical care in explaining its average rate hikes of 13% this year.

If conservatives want to avoid the specter of federally funded single-payer healthcare in the United States, this is what they need to come to terms with. Canada provides high quality healthcare for everyone — including small businesses and the elderly — for a cost per person of about $4,000 per year. Ditto for France and the Netherlands. Britain and Japan do it for about $3,000. Ann Terranova is being asked to pay more than $6,000 per person — and that's for three working-age employees.

One way or another we have to deal with this. This year's healthcare reform bill takes some small strides toward reining in costs, but they're not nearly enough. We need to do far more, and if the private market won't do it then eventually public opinion will force us to adopt a European-style system. If conservatives really understood this, they'd take the problem more seriously. But they don't seem to.

Get Mother Jones by Email - Free. Like what you're reading? Get the best of MoJo three times a week.