Q: When I sold insurance in the early 1960s in East St. Louis, the only problem I had was finding people not already covered! One policy covered everything. You got sick or hurt and filed a claim and you or your provider was paid. Why is it so hard to get insurance today and why such high rates?
Fred Shrader, of Aviston
A: Simple — since your heyday as a salesman, medical costs have shot up at warp speed. In fact, you’d better check your policy now because I have some numbers that could give you a heart attack.
In 1960, when you were begging for clients, every American spent an average of just $147 per year on medical expenses. By 2015, that figure had soared to $9,990, according to the latest figures available from the Centers for Medicare and Medicaid Services.
You’re probably saying, “OK, but all things cost more now.” Well, yes, they do, but nothing close to the rise in health care costs. Figuring in an average annual inflation rate of just under 4 percent, $147 in 1960 is worth $1,200 in today’s money or roughly eight times more. Average car prices went from $2,570 to $33,260, about 12 times more.
But if you do the math, people are now spending 68 times more on doctors, drugs and hospitals every year than they did 55 years ago. Little wonder that insurance rates zoomed into the stratosphere. I mean until I turned 65, I was able to pay “only” $450 every month by gambling on a policy with a $10,000 deductible — and I’m reasonably healthy. Imagine what the costs would be if you ran a company and offered insurance to employees with the normal range of medical problems.
Meanwhile, as we expected our insurance policies to keep up with the average 8.1 annual increase in medical costs, our paychecks were rising by only 5.7 percent. Is it any wonder so many complain about the continued rise in premiums for policies that demand higher deductibles and larger co-pays while providing less and less coverage?
Let me give you a neat example. When I was born in 1952, the entire bill for my mom’s six-day stay at St. Elizabeth’s was $100.65 — $15 for the delivery room, $5 for anesthetic, $7.50 for labs, $5.15 for drugs, $11 for dressings and $57 for the room ($6 for me and $51 for her). The bill, which consisted of 12 lines, came on a single 6-by-7-inch piece of paper. Now, you get bills as thick as “War and Peace” with $50 Tylenol tablets, not to mention cancer treatments that might run tens of thousands a month. Add in countless tests to avoid lawsuits on the latest high-tech machines and you’re quickly talking real money.
Yet despite all the spending, as recently as 2013 the U.S. was found to lag in life expectancy and infant mortality behind a half-dozen other developed countries that spend considerably less, according to a Commonwealth Fund report. Some might say it’s enough to make you sick.
What college once moved its commencement up a day because of a solar eclipse?
Answer to Friday’s trivia: It’s often noted that author Mark Twain was born and died shortly after successive appearances of Halley’s Comet. But here’s something even stranger: Pope John Paul II was the only known pope to be born during a solar eclipse (May 18, 1920) and buried during another (April 8, 2005). Some even say the unique occurrence was prophesied by the 12th century Irish St. Malachy, who predicted a pope arising from “the labor (eclipse) of the sun.” But historians generally think the prophecies, which predicted the next 112 popes, are a fabrication, written long after Malachy’s death. Good thing. According to the legend, the current Pope Francis will be the final pope, a false prophet who will spark Armaggedon and the end of the world.