New data out from the Centers for Disease Control and Prevention show that some 44.9 million Americans of all ages were uninsured in the quarter of January through March. Roughly 63.5 percent of unemployed adults aged 18 to 64 and 21.5 percent of employed adults in the same age group had been uninsured at some point in the past year. The new report highlights a trend in Census data that private coverage is declining while coverage in public health programs is on the rise.
The numbers also underscore what Stuart Butler has called a “catastrophe of small-business health care coverage in America.” Since the majority of Americans get their health coverage through their workplace, increasing costs have pressured more companies to reduce or drop benefits, with most small businesses opting to not cover employees because of the skyrocketing costs. The result — as shown in the Kaiser Family Foundation’s recently released annual survey on employer-sponsored benefits — is a relentless drop in small business coverage. Moreover, employer-sponsored health insurance rose to an average annual rate of $13,375 for family coverage this year.
However, Butler and other health policy experts argue Congress is going about the wrong way in trying to promote greater health insurance coverage. Measures like employer mandates to provide health care coverage to workers or pay a fine, requirements that all Americans buy insurance or pay a tax, expansions of nearly bankrupt public health programs and greater regulation of health insurance threaten to push premiums even higher and lop more taxes on American families. All of the provisions would exacerbate the decline of private employer coverage.
In particular, the higher taxes that Sen. Max Baucus (D-MT) proposed in the framework of the Senate Finance Committee’s health bill (a full bill has not been released) would make the uninsured problem worse for low-income workers, Butler told a health care forum sponsored by the Alliance for Health Care Reform.
The Congressional Budget Office noted this week that taxes levied on drug companies, medical device manufacturers, health insurers and clinical laboratories as proposed by Baucus’ chairman mark would be passed onto consumers through higher insurance rates.
“This will further squeeze workers’ cash earnings,” Butler said. Instead of pushing through highly contentious health bills, Congress needs to hit the reset button and focus on reform that garners broad support, Butler said. He noted that tax experts across the ideological spectrum have called for changing the tax treatment of health care coverage to make it more equitable for consumers who buy it on their own in the individual insurance market.
“Plus, let’s build up momentum in a different direction when it comes to businesses providing health care benefits. Let’s make it more like retirement savings, where employees often do their paperwork through their employer but own their 401(k) or pension,” Butler said, stressing that a basic reform of the tax treatment of health insurance is necessary to make that happen.
You hear or read the number all the time. The New York Times breathlessly reports there are 46 million uninsured Americans and President Barack Obama routinely asserts the same number. The Census Bureau estimates, however, do not tell the entire story. The uninsured are a diverse and dynamic population, and the higher frequency of coverage loss is not only a function of the recession, but of the flaws inherent in the health insurance markets, namely the inability of individuals and families to secure and maintain personal and portable coverage. Data released by the Agency for Healthcare Research and Quality (AHRQ) and Centers for Disease Control and Prevention (CDC) enables taxpayers to drill deeper into the problem.
- According to AHRQ’s The Uninsured in American, 1996-2008: Estimates for the U.S. Civilian Nonstitutionalized Population under Age 65 (Statistical Brief #259) the number of non-elderly individuals for the full year in 2007 was 39.9 million.
- That 39.9 million includes 5.9 million children (see Statistical Brief #259) who are either in families wealthy enough to afford health insurance or are already eligible for Medicaid or the State Children’s Health Insurance Program (SCHIP).
- That 34 million uninsured number includes 12 million illegal aliens s who the proponents of H.R. 3200 swear up and down will not receive a single dime of taxpayer assistance through the legislation.
- Most of those who are uninsured become insured. As most health policy analysts know, the insurance market is unstable; it is constantly churning with people going in and out of coverage. According to the CDC’s Summary Health Statistics for the U.S. Population National Health Interview Survey (CDC, Table 25), nearly one quarter of currently uninsured individuals was due to change in employment. And according to AHRQ’s The Long-Term Uninsured in America, 2004-2007: Estimates for the U. S. Civilian Nonstitutionalized Population under Age 65 (Statistical Brief #258) 55% of individuals ages 18-24 were uninsured for at least 1 month in the period 2006-07, but only 18 percent were uninsured over a two year period and only 11 percent were uninsured over the entire four year period.
The AHRQ data reaffirms there are gaps in coverage. There is nothing new here; it is the problem that conservative health policy analysts have been trying to address for the last two decades. It is a structural problem in the insurance markets. While the millions who lose and gain coverage- the source of middle class anxiety- is not much different now than it was in the last ten years or more, it is well to remember that the number of Americans who are poor, sick, and uninsured for a lengthy period is a relatively small number, about 4 million individuals. This is problem is not hard to resolve.
What Congress should focus on, then, is how to make health insurance personal and portable; something moderates and conservatives in Congress, based on their own legislative proposals, know exactly how to do. Instead what we are getting is just an acceleration of the already fast tracked government control of health care.
Take the SCHIP data from AHRQ. There were 5.9 million uninsured children in 1999. In 2007, there were still 5.9 million uninsured children (Statistical Brief #259). Public coverage went up, and private coverage went down; but overall, coverage remained the same. Consider that the cumulative cost of SCHIP and increased Medicaid enrollment of children has exceeded $100 billion. The data suggests that much of this spending has simply substituted taxpayer dollars for private dollars. It’s called crowd out, and it is profoundly irresponsible public policy. For every two dollars of spending, you get a $1 worth of coverage. This is likely to be repeated if Congress enacts the same, tired, old formula: expansion of public programs. Neither the Administration nor Congress has yet to explain how much of the $1.2 trillion in new spending under the House legislation will go to simply replacing private spending with taxpayer dollars.