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Good news? Or better bad news?

As Warren Buffett pointed out in May, we have had a long sad march in health care costs, from 5% of GDP about 50 years ago to approaching 18% of GDP today.  So it is irritating to hear "good news" like this:  health costs "only" went up 4-5% last year. 

When wages are going up 2-3%, that's a huge cost increase for most families.  A 2% "real", inflation-adjusted annual increase adds up to a 28% increase over 10 years.  That means health care costs passing 10% and heading toward 15% of household incomes. 

At the same time, many economists are puzzled as to why wages are not increasing much more rapidly?  As Buffett implied:  It's the health care costs, stupid!  Let's use the "golden rule", putting ourselves in employees' shoes:  If you are given a choice of higher wages and no health insurance, or keeping your health insurance but sacrificing some potential wage increases to pay for health inflation, what would you "choose"?

(See Kaiser Health News article.)

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