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| CLINICAL
MIND > INSURANCE |
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The
True Magnitude of the Health Insurance Question |
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Although there is no conclusive evidence, a growing
number of economists and financial strategists
are beginning to think that the staggering surge
in healthcare costs over the past three decades
has literally caused a transformation of the economic
landscape itself. Since 1974, the average cost
of healthcare has increased by an average annual
rate of 9.9%. This figure dwarfs the average annual
increase in GDP to the point that Americans now
spend 1 out of every six dollars (a total that
exceeds $2 trillion USD in 2006) on healthcare
related costs. |
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With
no end in sight to the increasing healthcare costs,
it is absolutely imperative for citizens to have
health insurance to avoid incurring a huge burden
of debt in the event of an accident or illness.
However, while having health insurance has never
been more critical, the sheer weight of the rising
healthcare costs has caused premiums to skyrocket.
This vicious cycle seems to be building momentum
leaving a growing number of hard working people
with fewer good options when it comes to having
health insurance. |
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There was a time when simply having a full-time
job virtually ensured you at least some degree
of health coverage as part of your compensation
for employment. In 1987, nearly 70% of all Americans
were covered under some form of employer-sponsored
health insurance. In 2005, that figure had shrunk
to a little over 59% and that figure is sure to
go much lower in the coming years. |
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The process of globalization has put increased
pressure on businesses to sell their goods or
services for the best possible price while controlling
all costs and expenses to unprecedented levels.
Through no fault of the employee and even with
wages at stagnant growth rates, the cost of labor
continues to rise at staggering rates due to one
common factor: the increasing cost of providing
health insurance. This increasing expense has
forced companies to adopt a variety of tactics
to help control the costs, including: |
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Cutting
Benefit Packages: Lowering
the amount of overall coverage, increasing
deductibles, and essentially paring down
the overall plan are all policies being
pursued by businesses in an effort to combat
this growing expense. |
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Raising
Employee Contribution:
Essentially, employees are being asked to
pay more for a diminishing coverage |
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Using
More Staffing Agencies:
By lowering the number of “full-time”
employees to the bare minimum and then supplementing
with temporary workers (who are not entitled
to health insurance through the company
since they are only “temps”),
business lower the total they must pay for
health insurance. |
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Increasing
proportion of part-time workers:
32 hours or more is considered to be full-time
in most states and the point where employees
are entitled to health insurance if the
business is large enough. However, even
big businesses are trying to control their
rising health insurance costs by redefining
job titles and reclassifying employees with
a "part-time" status. Not only
does this stop-gap method leave hard-working
employees without medical insurance, it
also effectively lowers their income by
reducing hours. |
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Increasing
Use of Outsourcing:
To lower the number of employees who must
be provided health insurance, businesses
are resorting to outsourcing to countries
with less stringent or perhaps non-existent
employment laws regarding health coverage. |
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