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Tuesday, March 09, 2010

Postage And Health Care Increases Show a World Apart

In a short tale of two completely different worlds, I've always thought the complaints and criticisms of high costs and mismanagement towards the U.S Post office were unfair compared to the bonuses for failure issued in the free markets, particularly towards the exponentially skyrocketing premiums in the health care industry over the past ten years.
Consumer Watchdog Excerpt:
Over the past 10 years, premiums have risen 131 percent while wages have increased just 38 percent. In that time, inflation has gone up 28 percent.
In 1999, the cost of a U.S postage Stamp was 33 cents. Over the same 10-year period covering health care increases in the above chart, the cost of postage incrementally rose to 44 cents by May 2009, an increase of 33% which also turns out to be a reasonable medium between wage and price inflation.

In a imaginary scenario between the two industries swapping premium increases, if the HC industry lived by the modest cost/price standards of the nationalized U.S. Post Office, the $5,791 family premium in 1999 would only be about $7,546 today instead of $13,375. Conversely if the U.S post office lived by the profit-taking standards of the private health care insurance industry for the past ten years, a stamp would have been jacked up to about 76 cents in 2009. But even at that price it would still be a bargain.

Still I find it amazing how any industry including governmental bodies and agencies, post office included, have up until recently been able to survive absorbing the payroll shocks and runaway costs of the American health care industry.

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