Chunling

【Abstract】Rising costs for health care services and health insurance premiums are a growing burden for middle-class families across all age groups. The growth in health care spending is affecting other important priorities such as saving for retirement and for childrens education.This article analyzes the reasons behind current rising health care costs and stresses the necessity that due effort should be made to ease the concerns.

【Key words】health care; America; middle class

Introduction

American middle-class families are confronting higher medicare costs.For a family of four with parents in their mid-30s， the cheapest medicare insurance plan went typically for more than $2，400 a month， nearly $30，000 a year， not including an annual deductible of $9，200. The Affordable Care Act is working fairly well for people who receive subsidies in the form of tax credits， But for many others， especially many middle-class families，typically with an annual income over $98，000， the premium is “outrageous” and “unaffordable.” “Congresss repeated efforts to repeal President Barack Obamas signature health law have rattled insurance markets. Actions by President Trump and his administration have added still more uncertainty. Now， Senate Republicans have attached a provision to their $1.5 trillion tax cut that would repeal the health laws mandate that most Americans have health insurance or pay a penalty，” The New York Times reported.

Under such circumstances， middle-class families are fighting all the way to avoid losing their medical insurance. Working mothers are considering reducing their work hours and income， so their families could qualify for subsidies on offer to poorer families to help pay for premiums.Some families plan to put aside much less money for their retirement and the education of children so they could pay the premiums. Freelancers are thinking of hiring an employee， though they dont really need an assistant， so that they could buy health insurance as a small business， at a cost far below what they and their families would have to pay on their own.

Reasons Behind Expensive Heath Care in the U.S.

Health Care in the US is about twice as expensive as it is in any other developed country. People may assume the reason that the UK， Canada or Australia offers “free” medicare is that their people pay higher taxes. That money then goes into a big pot and is used to pay for peoples health care; but in fact， in the United States， Americans spend more tax money per capita on health care than those developed counties.

Why is the US paying so much more for care and not getting cheaper medicare？ Heres a look at six key reasons the US is failing to provide adequate health care at reasonable prices.

1. Administrative Costs

The number one reason American health care costs are so high is the administrative costs of running health care system are astronomical. About one-quarter of health care cost is associated with administration， which is far higher than in any other country.For example in America not everyone is insured; if people dont have insurance and they still get health care， they are consequently bankrupt for failing to pay their medical bills; therefore， the rest of people will not only pay for their medical costs but also all the expenditures the hospital spent trying to get those uninsured people to pay for their bills. Another case in point is the 1，300 billing clerks at Duke University Hospital， which has only 900 beds. Those billing specialists are needed to determine how to bill to meet the varying requirements of multiple insurers. Canada and other countries with a single-payer system dont require this level of staffing to administer health care.

2. Drug Costs

Another major difference in health costs between the US and every other developed nation is the cost of drugs. In most countries， the government negotiates drug prices with the drug makers， but when Congress created Medicare Part D ， it specifically denied Medicare the right to use its power to negotiate drug prices. The Veterans Administration and Medicaid， which can negotiate drug prices， pay the lowest drug prices. The Congressional Budget Office has found that just by giving the low-income beneficiaries of Medicare Part D the same discount Medicaid recipients get， the federal government would save $116 billion over 10 years. Think of what the savings might be if all Medicare recipients could benefit from Medicaid-negotiated drug prices.

3. Defensive Medicine

Yet another big driver of the higher US health insurance bill is the practice of defensive medicine. Doctors are afraid they will get sued， so they order multiple tests even when they are certain they know what the diagnosis is. A 2010 Gallup survey estimated that $650 billion annually could be attributed to defensive medicine. Everyone pays the bill on this with higher insurance premiums， co-pays， and out-of-pocket costs， as well as taxes that go toward paying for governmental health care programs.

4. Expensive Mix of Treatments

US medical practitioners also tend to use a more expensive mix of treatments. When compared with other developed countries， for example， the US uses three times as many mammograms， two-and-a-half times the number of MRIs and does 31% more Caesarean sections. This results in more being spent on technology in more locations. Another key part of the mix is more people in the US are treated by specialists， whose fees are higher than primary-care doctors when the same types of treatments are done at the primary-care level in other countries. Specialists command higher pay， which drives up the costs for everyone.

5. Wages and Work Rules

Wages and staffing also drive up costs in health care. Specialists are commanding high reimbursements， and the over-utilization of specialists through the current process of referral decision-making drives health costs even higher. The National Commission on Physician Payment Reform was the first step toward fixing the problem; based on its 2013 report， the commission adopted 12 recommendations for changes to get control over physician pay. The Commission has gone on to work with Congress to find a way to implement some of these recommendations， although tangible policy outcomes have not yet followed.

6. Branding

Providers who can demand the highest prices are the ones who create a brand everyone wants. In some markets， the prestigious medical institutions can name their price， which makes it difficult to get some control on health costs.

Influence of High Medicare Costs on Americas Middle-Class

National health care spending in the United States averaged $8，402 per person in 2010—72 percent higher than a decade earlier when it was $4，878， and nearly triple the 1990 level of $2，854. Health care spending has been growing faster than inflation and the overall economy. Between 2000 and 2010， health care spending per person grew at an average rate of 5.6 percent per year， outpacing inflation （2.4 percent per year） and the growth in gross domestic product per person （2.9 percent per year）.

Rising medicare costs have taken a heavy toll on middle-class families. Health care costs are a growing burden for middle-class families across all age groups. Wages have not kept up with increases in health care costs， and more middle-class families are struggling to cope with higher health insurance premiums and higher out-of-pocket expenses when they have an illness.? Employers have responded to rising health care costs by shifting more health insurance costs to employees， offering high-deductible health plans with lower premiums but higher cost sharing， and limiting wage growth. § Health-related expenses absorb a large share of incomes for people age 65 and older， and that share is projected to grow over time. The share of household income spent on health care expenses is projected to reach 18 percent for future retirees， compared to 8 percent for todays retirees. If these trends continue， many people who had been middle-class throughout their working years will be at risk of not having enough financial resources to maintain a middle-class lifestyle during their retirement years.

Consequently， middle-class families are cutting back on other basics， spending less on clothing and eating out. Thats not to say that low-income Americans have it easy. While the Medicaid expansion under the Affordable Care Act helped more lower-income households gain health coverage， millions continue to lack any insurance. For the poor， housing is creating the biggest pinch on their budgets， the Hamilton Institute report noted. Low-income families are now spending about 41 percent of their income on housing， compared with about one-third for middle-class families.

Conclusion

Health care spending as a share of GDP reached 18.2 percent in June， or a tie with the previous all-time high in February 2016， according to an August report from the Altarum Institute. Rising health care costs have adversely affected the economic security of middle-class families during their working and retirement years. The Affordable Care Act will make an important difference by expanding the number of people with health insurance protection， but the trend toward high-deductible health plans may mean that many currently and newly insured households face a significant risk of high medical bills. Hence， the American government and Congress must figure out effective ways to bring down the costs and? improve the value of health care—that is， using health care resources efficiently to achieve affordable insurance coverage and quality care.

References：

[1]王曉紅.美國社會與文化[M].西安：世界圖書出版社，2010.

[2]Komisar， H. The Effects of Rising Health Costs on Middle Class Economic Security[OL]. https：//www.aarp.org/content/dam/aarp/research/public_policy_institute/security/2013/html.