GM's health care obligation for retirees: $63.4 billion

“Health care is obviously an important issue for G.M., as well as any company that’s doing business in the United States today,” a company spokesman, Jerry Dubrowski, said. “A lot of our competition overseas doesn’t have the same health care burdens as G.M. because their governments are funding their health care systems.”

G.M. is the largest private provider of health care benefits in the United States and the largest private purchaser of well-known brand-name drugs like Viagra and Lipitor. It pays benefits for 1.2 million workers, retirees and family members in the United States. The company says its health care costs are about $1,400 for each vehicle sold in the United States, more than the cost of steel.

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It’s strange to see huge American companies all but begging for the government to socialize healthcare: once you’re paying $1,400 per unit, I guess the choice is pretty clear. Obviously, someone has to pay that $1,400, whether it’s GM paying it directly, corporate taxes, or the individual taxes of it’s employees.

This is also reminiscent of an idea in The Progress Paradox: we complain about the rising cost of health care, but we loose sight of the fact that we’re living healthier lives because of that cost. (Now, if you’re paying health care that doesn’t actually increase health, as with any scam, that’s, of course, something to be upset about.)

The best example Easterbrook gives, that I remember, is knee injuries and pain. If you had knee problems, not too long ago, about the best a doctor could do was to give you some aspirin and tell you not to jump around too much. Now, you can get all sort of knee surgery that will allow you to keep using your knees. But those operations come at a cost, of course: somewhere around $20,000 if I remember.

Another interest point is that you’re actually engaging in a valuation of the use of your knees: if you accept that $20,000, then the use of your knees is worth at least $20,000 to you. Of course, with insurance, you don’t pay that $20,000 directly or all at once, so it’s almost impossible to make that valuation in a pure sense.