Duvall & Associates, Inc.
BUSINESS ADVISOR NEWSLETTER
 

Pondering health care in the 21st century

- by Alan Duvall 

Published in Dayton Daily News  October 7, 2007 

“Doctor, my eyes have seen the years and the slow parade of fears... Now I want to understand.”  –Jackson Browne 

My company recently received the opening salvo from our insurance company – premiums would increase 23% over current rates.  At that pace our rates would double every 3-4 years. 

To preserve take home pay, employees elected to curtail benefits and raise deductibles.  End result – a net increase of “only” 10% - or a doubling every 7 years for steadily declining benefits.  

America’s health care system is touted as the finest in the world – provided you can afford the luxury of modern medicine.  Indeed, it is estimated nearly 90 million U.S. citizens under the age of 65 lived without health insurance for much of the past year. 

No wonder health care was a pivotal negotiating point for the recent GM/UAW settlement in which the union assumed major responsibility for a $50 billion medical fund. 

Hillary Clinton again proposed a grandiose national health care system which retains present employer-based benefits programs, introduces tax breaks for private insurance and vastly enhances government-funded Medicare. 

Funding HillaryCare II is elusive, relying upon additional taxes on wealthy individuals. Unfortunately, such tax hikes have already been earmarked for tax reform.  Certainly the rich had better brace for a near-term cash crunch.  

The current tax system rewards companies with deductions for employee benefits, but inexplicably kills such incentives for individuals.  Congress cured some inequities by granting self-employed and Sub S owners a deduction for health insurance, thus individuals may soon be similarly blessed. 

Theorists also tout the advisability of portability of plans, increased competition and benefit options, and the combination of small businesses and individuals to pool risks.  

Few argue for a socialized medical system, but some government intercession appears inevitable in light of crushing cost escalations.  Care providers and insurance carriers may cry foul, but without effective self-restraint, they’ll have no one to blame but themselves. 

“Doctor...I hear their cries.  Just say if it’s too late for me.”  –Jackson Browne

Alan Duvall is a certified public accountant in Dayton.  Contact him at Alan@Duvallcpa.com.  Previous articles archived at www.duvallcpa.com.