Posted by: jessicasmall | June 13, 2007

Status of United States’ Healthcare System – Part II

If you believe everything you read in a newspaper or magazine recently, you could easily come away with the impression that the status of health care in the United States is in a state of crisis.  Certainly, when it comes to the cost of health care we seem to be in crisis mode.  The premium growth rate this year – 9.2 percent – outpaced by miles both the growth in wages (2.7 percent) and inflation (3.5 percent), according to a Kaiser Family Foundation survey.  The amount workers’ pay in dollars has of course risen. Kaiser reports that workers paid an average of $2,713 for family coverage this year – or $1,094 more on average than they did five years ago.  Our records reinforce these surveys.  In 2001, the average AgriPlan and BizPlan client reported $3,236 in uninsured medical expenses.  By 2005, that average had jumped to $4,159, an increase of 28.5%.  When we add this with their health insurance premium, we see that clients’ total costs for health care grew from $7,812 in 2001 to $10,176 a year in 2005, an increase of 30.3%.

However, for every instance of failure, I can easily come up with several more positives regarding our health care system.  For example, AgriPlan and BizPlan have saved self-employed business owners over one billion dollars in taxes over the past 20 years.  This huge milestone was reached by showing these business owners how to implement a tax savings strategy enabling them to deduct all of their health care expenses.  The average client saves more than $2,400 in taxes each year.  And the continual increase in health care cost creates even more value in these programs. 
On the group side, the more than 21 million Americans who benefit from participating in a Flexible Spending Account must be considered a success.  At his annual State of the Union address, the President called for eliminating the deductibility of these Plans. The discussion of eliminating benefits or phasing out programs frankly makes me nervous.  Instead, we should be working diligently to increase access to them.  Discontinuing these valuable and worthwhile programs, that million of Americans used to afford health care for their families would be like throwing the baby out with the bath water.

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