Uninsured

HEALTH REFORM: New America's Tools for Understanding the Census Numbers

Joanne Kenen — Mon, 25 Aug 2008 17:21:00 -0400

The Census Bureau is set to release updated numbers of uninsured Americans on Tuesday, so we'd like to point out to you some of the papers and issue briefs we at New America have done on the uninsured, including our fact sheet, "Who are the Uninsured?" We'll be updating them soon with the new statistics, but the basic analysis should remain unchanged. The full texts of these and other papers are on our web site, but here's a sampling:

Employer Health Costs In a Global Economy: A Competitive Disadvantage For U.S. Firms

Although most Americans get health insurance through their employers, business leaders are increasingly united in their belief that rising health care costs threaten America's competitiveness in the global economy. Business support for comprehensive health reform has been growing as a result.

However, economists generally believe that it is workers —rather than employers—who pay for health care through lower wages. Although this proposition may hold true in the long run, employers face a variety of constraints that may make it difficult for them to fully shift health costs in the short run.

As a percentage of payroll, the employer cost of health benefits has exploded over the past few decades. In addition, employer health costs for manufacturing firms in the United States—$2.38 per worker per hour—were much higher than the foreign trade-weighted average of $0.96 per worker per hour in 2005. Employer health costs make the United States less competitive.

Cost of Failure: The Economic Losses of the Uninsured

In 2000, the Institute of Medicine (IOM) estimated that the "annualized economic cost of the diminished health and shorter lifespan of Americans who lack health insurance is between $65 and $130 billion for each year of health insurance forgone."

After updating the IOM's numbers to reflect growth in the economy and increases in the number of uninsured, we estimate that the poor health and shorter lifespan of the uninsured cost the U.S. economy between $102 billion and $204 billion in 2006. This estimate does not include spillover costs. For example, when medical bills go unpaid, providers attempt to recoup lost revenues by raising the rates for their services. In response, insurers raise premiums. This vicious cycle of "cost shifting" inextricably links the uninsured to rising health care costs and premium rates for the insured.

The economic cost imposed on the nation by the uninsured is as much as and perhaps greater than the public cost of covering them.

Who Receives Uncompensated Care?

Two distinct groups of people account for the majority of uncompensated care costs—those living at or below the poverty line and middle- and high-income individuals who may be able to afford health coverage.

Uncompensated care is health care that is delivered, but not paid for by either a patient or a third-party payer. Most UC is delivered to the very ill during or after a visit to an emergency room. In 2004, it totaled an estimated $41 billion.

This issue brief finds that individuals with incomes above 200% of the Federal Poverty Level (FPL) or $41,300 for a family of four and people living at or below the poverty level account for two-thirds of all UC in the U.S.

Why Does Health Insurance Matter?

Lack of health insurance negatively affects the overall productivity of society, the stability of emergency care, and the health and financial well-being of individuals.

Whether you are a Democrat or Republican, do you ever wonder: why all the fuss about health coverage? Campaign rhetoric aside—why does health insurance really matter? This short policy brief outlines the societal, economic, and health-related consequences of the uninsured.

REFORM: Pre-Election Poll Finds One-in-Four Americans Have Trouble Paying for Health Care

Joanne Kenen — Tue, 19 Aug 2008 18:55:00 -0400

The latest Kaiser Family Foundation tracking poll finds that one-in-four Americans are struggling to pay for health care, with lower-income and sicker people predictably facing steeper challenges.

While health care doesn't figure quite as prominently on the political agenda as it did a year or so ago—the economy is by far the top issue for Democrats, Republicans, and Independents alike—it is still on voters' minds, coming in fourth overall (see chart below). Plus health care is part of Americans' economic anxiety. Health care ranks as a "serious problem" above paying for food (18%), problems with debt (16%), and paying the rent or mortgage (15%); but, it ranks below paying for gas (37%) and slightly below getting a good-paying job or raise in pay (26%).

Asked what aspect of health reform should be a priority for the next president, the top priority was making health care and health insurance more affordable (see chart below). Covering the insured placed second overall—for both Republicans and Democrats, although the coverage issue did resonate more for Democrats. Most of those surveyed thought Democratic Obama was more likely to make health reform a priority than Republican McCain.

As other polls have found, most of those surveyed had a preference for getting their insurance through their (or a spouse's) workplace. Those who already had job-linked coverage were particularly strongly in favor of preserving that option.

HEALTH POLITICS: Do the Underinsured Vote?

Joanne Kenen — Mon, 14 Jul 2008 17:12:00 -0400

The Underinsured—aka people who may think they have enough insurance until they get sick and find out otherwise— have been getting a fair amount of attention recently, particularly since the Commonwealth Fund reported that there are now about 25 million underinsured people, up 60 percent in four years. These are the people, according to several studies, who delay or do without some of their health care that those of us lucky to have decent coverage may take for granted. We listened in the other day to a webcast (click here to see it) sponsored by the Association of Health Care Journalists featuring Commonwealth assistant vice president Sara Collins;Helen Darling, president of the National Business Group on Health; and Mila Kofman, Maine's superintendent of insurance.

One reason we're interested in the underinsured, who tend to be middle class, is that they may turn out to be a force in the November elections. As Julie Rovner wrote in Congress Daily (subscription) recently:

It has long been something of a political truism that the uninsured don't vote. But at 47 million strong, and with 80 percent of those connected to the workforce, that seems less true than it used to be. But the real sleeper health issue of this campaign is not the uninsured but rather the underinsured.

Definitions vary, but generally the underinsured are those who spend, or are at risk of spending, more than 10 percent of their income out-of-pocket on healthcare bills and less if their income is below twice the poverty level—about $42,000 for a family of four.

As Collins noted on the webcast, health care costs are hitting the middle class at a time when they are feeling the squeeze from rising gas, energy, and food costs. Helen Darling, whose group represents employers concerned about health care costs and quality, agreed that for many workers, "the ability to absorb these increases is just not there."

Their dialogue helps explain why we get a tad exasperated when we hear people say that the economy could eclipse health care as an issue next year. We see health care as a big part of people's economic anxieties and burdens (and their employers). So next time someone tells you we can't afford to fix health care, tell them au contraire, we can't afford not to.

REFORM: Kennedy Spurs Bipartisan Conversations about Health Legislation

Joanne Kenen — Wed, 02 Jul 2008 17:10:00 -0400

We perk up when we hear phrases like "bipartisan support for a major healthcare initiative," especially when the bipartisan push is coming from Senator Edward Kennedy. Today's Boston Globe reports that while Kennedy recuperates from his brain tumor surgery, his office has begun a series of bipartisan meetings with an array of health care specialists to prepare for a major push to cover all Americans when the new president takes office next year. The paper reported:

Those involved in the discussions said Kennedy believes it is extremely important to move as quickly as possible on overhauling the healthcare system after the next president takes office in January in order to capitalize on the momentum behind a new administration.

Kennedy is chairman of the Senate Health, Education, Labor and Pensions Committee; Obama is a member, and his Senate staff has attended the roundtable discussions, the Globe reported. But Republican staff is also involved, as Kennedy tries to identify areas of agreement, possible starting points. Kennedy has made health care a signature issue in his 45 years in the Senate, and even before his aggressive brain cancer was diagnosed he made no secret that he wants to seize the moment and act next year.

"You have got to think this will be the Ted Kennedy Health Reform Act, because he's a beloved figure and he's championed the issue for so long," said John Rother, policy director for the AARP, which has been involved in the discussions. "There are a lot of unknowns right now, but what we do know obviously is he is very close to Obama, and he also has quite a network of health policy experts that he can draw from."

The newspaper reported that Kennedy's aides have also been working with a network of Massachusetts advisers, talking about ways the state's health program could possibly be adapted to a national model.

The many lessons of the 1993–94 health care reform debacle include that it was too partisan, and that the Clinton White House did not involve Congress enough in developing its plan. Kennedy is not alone in trying to do things differently this time. The Senate Finance Committee, chaired by Montana Democrat Max Baucus, in June held a day-long bipartisan summit on health reform. Oregon Democrat Ron Wyden and Utah Republican Bob Bennett have a health reform proposal that has attracted bipartisan interest. Various nonprofit groups are running bipartisan programs to help congressional staff better understand the challenges of health care reform. We know from our conversations with people around Washington that there really is a desire to do things differently this time, so we're thrilled to see Kennedy make this a priority for his country, even as he confronts his own health ordeal.

CULTURE BEAT: It's Not Funny, Honey -- Health Reform Meets the Comedy Club

Julie Barnes — Tue, 01 Jul 2008 13:14:00 -0400

If you're a politician, you know you've hit the big time if a late night talk show host makes fun of you. Ditto for an issue -- it's big time if it makes the leap from think tank "Issue Brief" to a riff in a stand-up comedy routine. At the D.C. Improv the other night, it was pretty clear that the state of the American health care system has hit the big time. Jake Johannsen had the packed house doubled-over or nodding vigorously to a series of truisms about our broken system. It was only after I left that I remembered that it's not really funny.

Jake, who has been on Letterman and the other major late night shows, is Seinfeld-esque in that he manages to talk about all the mundane realities of life in a way that makes your sides hurt from laughing. When we saw him, he was on a "How The Man Sticks It To The Little Guy" run when he used health insurance as an example. First, he mentioned how lucky most of us feel if we can buy insurance through our employers (unspoken subtext: because if we get health insurance at work, we don't have to worry about being denied coverage because of preexisting conditions). But then we don't feel so lucky if we get sick and, even with coverage, get a pretty big bill. At least then, Jake joked, we could complain about how our boss was "sticking it to us." But some of us have to purchase our own insurance directly, so, he deadpanned: "I end up sticking it to myself! That doesn't seem right." (If he were a wonk instead of a comedian, he'd explain that many of us are underinsured, or facing a bigger share of costs even with insurance.)

Then, in surprisingly fluent health insurance-speak, Jake went off about how he could barely keep up when his insurance broker was trying to explain his policy choices:

an HMO
an HMO with a POS
a PPO
variances between the deductible, premiums, co-pays, co-insurance and out-of-pocket maximums

Jake asked "but which one is best" and the broker replied "it depends on the individual." And Jake, being a comedian, said: "Let's say, hypothetically, that the individual is me." The broker responded: "You have to make your own decision about what's best for you." At which point, Jake made a funny face that meant "You've got to be kidding" and the audience responded with gales of laughter. (Tragicomedy gets them every time.)

Unfortunately, we are not living a comedy routine. As things currently stand, no one (not even those of us who work on health policy for a living!) can make truly informed decisions about which health care policy is best for us. It is difficult to determine whether paying more up-front or taking the risk of paying more later or having more or less provider choice is the way to go. This kind of confusion is not funny, which is why transparency and consumer-friendly decision support tools (real ones, that real people can understand) must be part of any health reform.

I woke up the next morning with my sides still hurting, but very glad that I could come to work and try to offer solutions to the problems Jake joked about. We have to offer more Americans coverage, make sure that millions aren't still uninsured, and reduce health care costs so that we can afford the coverage. If we don't get well down this path in 2009, you can bet I won't be laughing. Not sure if Jake will be either.

REFORM: Newt Gingrich on "Free Riders" and the Individual Mandate

Elizabeth Carpenter — Wed, 18 Jun 2008 16:05:00 -0400

If you were paying attention to your health care headlines recently, you might have doubled back for a second look at this caption: "Gingrich suggests insurance mandate for some." Huh? Is Newt Gingrich thinking seriously about a requirement to purchase health insurance? Is that a typo? No.

Let's recap. At an Alegent Health event in Omaha, the former Speaker of the House suggested that a strategy to combat high health care costs should include a requirement that people who earn more than $75,000 a year purchase insurance. According to an AP story, Gingrich said it was, " ‘fundamentally immoral' for a person who can afford insurance to save money by going without, then show up at an emergency room and demand free care."

This is in keeping with some Gingrich's past comments about individual responsibility in the context of health reform. In a June 2007 opinion piece in the Des Moines Register, he said:

Personal responsibility extends to the purchase of health insurance. Citizens should not be able to cheat their neighbors by not buying insurance, particularly when they can afford it, and expect others to pay for their care when they need it. However, an individual mandate is an acceptable option only when the larger health-care system has been fundamentally changed. It is unjust to require an individual to buy into a broken and dysfunctional system.

Here's the bottom line from some of our own work at New America on uncompensated care, "free riders," and the uninsured—16 percent of individuals who are uninsured are above 400 percent of the poverty line (about $80,000 a year for a family of four and $40,000 for an individual). They are the classic "free riders"—people who could likely afford insurance, but choose not to buy it. When the uninsured receive care that is not paid for, the insured pay higher premiums as a consequence. Hardly seems fair or efficient.

Gingrich appears to get this, as did fellow Republicans Arnold Schwarzenegger in California, and Mitt Romney in Massachusetts. Romney made the individual mandate central to his state reform proposal while he was governor of Massachusetts, and confronted this issue head on in a Wall Street Journal op-ed, during the heat of the health reform conversations in his state. "Some of my libertarian friends balk at what looks like an individual mandate," he wrote. "But remember, someone has to pay for the health care that must, by law, be provided: Either the individual pays or the taxpayers pay. A free ride on government is not libertarian."

The reality of an individual mandate (when coupled with subsidies so that insurance is affordable and market reforms so that coverage is accessible), is that it would not only address the "free rider" problem, but also serve as a tool to enhance insurance market competition. When combined with market reforms and subsidies, the mandate would help move insurers away from a business model that relies on marketing and underwriting and towards a strategy that involves competing for customers based on performance and price. This is a good thing...and something those in favor of market competition could get behind.

COVERAGE: We're Already Paying Billions for the Uninsured

Joanne Kenen — Thu, 27 Mar 2008 15:24:00 -0400

We hear a lot about how we as a society just can't afford to pay for the uninsured. Wrong. We're already paying.

Cost of Failure: The Economic Losses of the Uninsured , a report by our New America health policy colleagues Sarah Axeen and Elizabeth Carpenter, concluded that the poor health and shorter life spans of the uninsured cost the United States between $102 billion and $204 billion in 2006.

"Some might argue that given the sudden economic downturn, we cannot afford health reform. To the contrary: these numbers only further emphasize that the cost of doing nothing is more than the cost of reform," said Len Nichols, director of our health policy program.

The report updates an oft-cited Institute of Medicine study in 2000, which found that economic losses of those who lack insurance was between $65 billion and $130 billion for "each year of health insurance forgone." The estimate considered economic losses because of premature deaths and unnecessary prolonged illness.

The new NAF report updates that data based on increases in the number of uninsured Americans and the value of the nation's economic output. From 2000 to 2006 the ranks of the uninsured grew from 40 million to 47 million. U.S. gross domestic product rose from $9.8 trillion to $13.6 trillion.

The range of costs reflects two different assumptions used to calculate the estimates. In the first, the uninsured and insured are assumed to have equal levels of disease prevalence; in the second the uninsured are assumed to be sicker. The estimates could have gone even higher had the team included "spillover costs" such as doctors and hospitals raising their rates and insurers hiking premiums to cover the bills that go unpaid by people with no insurance.

IN THE STATES: Oregon's Wheel of Fortune

Joanne Kenen — Thu, 13 Mar 2008 21:50:00 -0400

You often hear that everyone in America gets good health care, even if they are uninsured. Sadly that's not the case. As we noted in a recent policy brief, uninsured people get diagnosed later, die sooner, and the costs get shifted to the rest of us anyway.

In Oregon, one working-age adult dies each day because he or she lacks health insurance. That's the conclusion of Families USA, which has taken national data from the Institute of Medicine and the Urban Institute and broken it down state-by-state.

We looked at the Oregon data because the state has been in the news so much recently because of its health insurance lottery. The state, which in more prosperous times was often at the forefront of health innovation, has seen the number of uninsured creep up to 600,000. The legislature has approved covering low-income families who don't qualify for Medicare or Medicaid. About 130,000 people are eligible but the state only has the money to cover 24,000 of them—and 17,000 of those slots are already full. The state decided the only fair way to fill the remaining slots is by lottery.

"We thought about other options, such as should we try to pick all of the sickest people or the kids or the people with cancer or heart disease," the state's Medicaid director Jim Edge told the New York Times. "But the Feds won't allow that, and there's just no way to guarantee the fairness of that. Why would cancer be more deserving than heart disease?"

CULTURE BEAT: "Critical Condition" Shows Care Quality Gap for the Uninsured

Joanne Kenen — Tue, 04 Mar 2008 15:30:00 -0500

We saw a preview the other night of "Critical Condition" a new documentary that shows how for the uninsured, access to health care is too little, too late. The film will air on PBS's "Point of View" next Sept. 30, shortly before the presidential election, but before then filmmaker Roger Weisberg is screening it at town meetings and policy forums across the country. :

[slideshow]The structure is simple. The film follows four working Americans who are uninsured -- or who lost their insurance when they became too sick to work. Only one had a happy ending - an endearing chef who got extensive spinal surgery for free at a top medical center largely because a savvy and sympathetic doctor knew how to leverage the fact that a film crew was trailing his patient. The others didn't fare so well: one died, one had a lousy prognosis because of a late cancer diagnosis, and one was disabled.

The film goes beyond the familiar story line of mounting medical bills; it shows how insurance status itself affects access to care. Yes, as conservative foes of health reform point out, emergency rooms do have to take care of people. But emergency rooms don't control chronic liver disease, or administer chemotherapy, or straighten out diseased spines. Emergency rooms don't make a prosthesis for a diabetic who chose to have his foot amputated rather than spend months trying to cure an infection, because if he didn't get back to work soon, he wouldn't be insured. (He ended up unemployed and uninsured anyway).

The list of community screenings isn't finalized yet, but check back at http://www.amdoc.org/outreach_news.php, http://www.pbs.org/pov/pov2008/criticalcondition/preview.html or http://pppdocs.com/

While you are watching, Weisberg asks that you keep this in mind: “During the 90-minute running time of this film, an additional 377 Americans will lose medical coverage.”