Commentary | Health

Health care by numbers

Sixteen years ago when President Bill Clinton tried to reform health care, millions of Americans had no insurance but a majority of the country still did not consider the system broken.

Today, as President Obama pushes for a sweeping reform, the system has eroded to the point that the data alone capture the urgent need not just for an overhaul of the existing system, but for the creation of a public health insurance option that will guarantee health insurance for all Americans. As the number of uninsured has risen to staggering levels – an estimated 50 million Americans will not have health insurance this year – the traditional model of employer-sponsored health insurance has been shown to be seriously flawed. Americans who once worried about losing health insurance if they lost their jobs now must entertain the possibility that their employers will not offer health insurance, or that the premiums will make it unaffordable. Minorities, children, and low-income households are at greater risk of going uninsured.

While any health insurance reform proposal will have to juggle the often conflicting interests of multiple parties from the young and healthy to the old and infirm, much of the opposition to proposals for a public plan comes from the same parties that control the inadequate system in place today. As this summary explains, health insurance companies and drug makers are resisting a system that would introduce new competition and effectively limit how much they could increase costs for drugs and doctor visit.

Research conducted by EPI health research team has repeatedly concluded that a public plan is essential. Following are some of the highlights of that research:

–Although the majority of Americans under the age of 65, about 63%, have employer-sponsored health insurance, coverage has been steadily declining since 2000, even during periods when overall employment grew. Some 3 million fewer people had employment-based insurance in 2007 than in 2000. This loss of coverage was especially steep among children, where employer-sponsored health coverage dropped from 66% in 2000 to less than 60% in 2007. While still providing coverage to a majority of children, it is a slim majority that is getting smaller all the time.

–Average premiums for an employer-sponsored family plan have risen nearly 120% since 1999, three and a half times faster than workers’ earnings and more than four times faster than inflation. One of the reasons some workers do not have coverage is that they cannot afford the high premiums. This problem has hit low-income workers the hardest, although coverage levels have also fallen for college-educated workers.

–Fewer than half of all Hispanic Americans have health insurance through an employer. The rate of coverage among this group fell to 41.4% in 2002, from 45.8% last year. Among African Americans, only a slim majority have employer coverage: 51.6%, down from 56.1% in 2000.

 –Workers in the service sector are highly unlikely to have health insurance through their employers. The coverage level among this group was just 29.5% in 2007. Fewer than half of all workers at small businesses with fewer than 24 employees had employer-sponsored health insurance from their own job.

In his paper, Health Care for America, Jacob Hacker argues for a public health insurance option based on Medicare, which offers a strong model for controlling costs and improving care. The Medicare system spends just 2% of total spending on administrative costs, compared with an average of 14% in the private sector, underscoring the vast efficiencies that come with very large insurance pools.

A final argument for the need for a public plan is the costly churn that occurs when workers switch jobs. Even in a best-case scenario, individuals who are employed and are able to afford employer-sponsored insurance coverage may spend a significant time without insurance when they are between jobs. During the current recession, for example, 5.7 million Americans have lost their jobs and often their health insurance, too. Research shows that about a third of people have no coverage for at least a month over a three-year period. Though it is not always highlighted in the health care debate, this problem of discontinuous coverage is also costly. Individuals, and especially children, who go without preventive care tend to suffer poorer health, which increases costs for everyone.

See related work on Employer coverage | Health

See more work by Andrea Orr