The Reading Blog

A Medical News & Perspective report by Mike Mitka, Health Insurance Costs Remain a Burden for Employers and Working Families, published in in the October 22, 2008 issue of the Journal of the American Medical Association (JAMA) summarizes some worrisome data about rising health insurance costs. The first few sentences of the report provide the punchline,

As the presidential hopefuls and their parties put forth proposals for reforming US health care coverage, reality marches on. Health care insurance premiums continue to outpace inflation. Fewer companies are offering health coverage, and those employers doing so are shifting costs to their employees through increased co-payments and higher deductible levels. And more people, including those with coverage, are going into debt or otherwise finding it difficult to pay their medical bills.

Statistics quoted in the report include:

• People who were uninsured for any part of 2008 will spend about $30 billion of their own money and will receive approximately $56 billion in uncompensated care while they are without insurance (Hadley J et al. Health Aff [Millwood]. 2008;27[5]:399-415)
• Results from the The Commonwealth Fund survey, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families:
  • Nearly 9 million persons in the United States have lost their health insurance since 2000.
  • In 2007, the number of underinsured adults (those with coverage that does not adequately protect against high medical expenses) increased to 25 million, up from 16 million in 2003.
  • 41% of working-age adults (72 million individuals) reported a problem paying medical bills or had accrued debt related to medical expenses, up from 34%, or 58 million people, in 2005.
  • Overall in 2007, nearly two-thirds of adults (116 million people) had problems paying their medical bills, deferred needed health care because of cost, were uninsured for part of the year, or were underinsured.
  • Approximately 49 million people, 28% of the population, were paying off medicala debt in 2007, up from 21% in 2005.
  • Of those with financial problems, 24% were carrying $4000 or more in debt and 12% owed more than $8000.
  • Among those having problems with medical debt in 2–7, 29% were unable to pay for basic necessities (eg, food, heat, rent); 39% were using their savings to pay form medical expenses; and 30% took on credit card debt.
• Preliminary results form a survey by Mercer and Associates of 1317 employer health plan sponsors found that:
  • To reduce their 2009 health care cost increases, 59% of employers will raise deductibles, co-payments, coinusurance, or employee out-of-pocket spending limits.
  • After double-digit growth in the first half of the decade, annual health benefit cost increases dropped to about 6% in 2005 and have been fairly stable since.
  • Preliminary results indicate that health care cost growth to employers would be 5.7%

And here are some quotes from the JAMA article:

“Given the trends, it seems inevitable that employers will continue dropping insurance and employees will not be able to afford it,” said Jack Hadley, PhD, a professor and senior health services researcher in the department of Health Administration and Policy at George Mason University in Fairfax, Va. “Unless something is done directly to control private health insurance costs, the number of uninsured will continue to increase.” [...]

Michelle M. Doty, PhD, coauthor of the report and director of survey research with the Commonwealth Fund, said she was not surprised by her findings. “When we looked at the trends from 2001 to 2007 and saw the associated change in access problems, we were struck by how much worse it’s gotten over this time frame,” said Doty. “We know there’s been a continuous erosion of private coverage over this time, and the ranks of uninsured and underinsured have increased.”

[David U.] Himmelstein [Associate Professor of Medicine at Harvard Medical School and co-founder of Physicians for a National Health Program] said that for physicians, the current health insurance climate makes it more difficult to treat patients. “Before, when I prescribed a medicine or recommended a test, the conversation was about ‘Do I need this?’” Himmelstein said. “Now much of the conversation centers on, ‘Is my insurance going to pay for this? If they pay only a part, can I afford it?’ I’m spending a lot of time with the insurance hassles.”

Still, Himmelstein recognizes the real burdens are on patients. “Fifteen years after the Clinton Administration’s health reform effort, health care costs are a significantly higher part of the US gross domestic product and finding affordable coverage is much more difficult,” Himmelstein said. “Fifteen years ago, the issue was about covering the uninsured; today, the crisis is for those with insurance.”