Wednesday, July 29, 2009

Costs of health reform inaction hidden, high

It appears all but certain that Congress won’t meet the August "deadline" for health care reform passage (or, in the new lingo, health insurance reform). This got me to wondering: What would happen if Congress doesn’t produce a health reform bill at all this year, or even ever? How would this affect us, with each passing day, week, month, or year. Caution: lots of speculation ahead.

With Congress not making much headway, right now, no meaningful health reform legislation in 2009 is a distinct possibility. Of course, when it comes to Congress, it's probably wise to never say never. Even so, with Theodore Roosevelt’s Bull Moose Party campaigning on a health reform platform in 1912, it has certainly taken long enough to get it done!! Think about it: that's almost as long as it's been since the Cubs last won the World Series. Will health reform pass before the Cubs win the World Series again? (I'd have to go with Congress, not the Cubs, on this one.)

Health insurance premiums. If Congress does not act on meaningful health reform, health insurance premiums likely will continue to increase faster than overall inflation. According to a recent survey by the Center for American Progress, health care costs would be expected to increase by 71 percent over the next 10 years. Under this scenario, the average family’s health insurance premiums, which are about $13,100 in 2009, would likely increase to more than $22,000 by 2019. In some high-cost states, the average annual family premium would be over $25,000 by 2019. Even with this increase, the typical family’s total health care costs in 2019 actually would be much higher than that, as this number does not take into account co-pays, coinsurance, deductibles, and other out-of-pocket expenses. Do you think you'll be able to afford health insurance then?

An increase of 71 percent over the next 10 years might not seem like much. Keep in mind, however, that between 1999 and 2008, the average annual family premium increased by 119 percent, even though general inflation was only a touch over 29 percent during that time. My salary did not go up by 119 percent during those years, did yours? Did anyone’s?

Hidden health tax. The so-called hidden health tax also grows every year. In 2008, for family health coverage, it stood at $1,017, according to Families USA. For individuals, the amount was $368 per insured single person. The “hidden health tax” is the undisclosed insurance premium surcharge, which is paid by American businesses and by insured individuals and families when they buy health insurance. This hidden tax, in effect, subsidizes the uncompensated health care costs of the uninsured. As more people lose their health insurance, this “hidden health tax” number almost certainly will continue to increase.

Lost health insurance. There are plenty of Americans already without health insurance. According to the Census Bureau, there were nearly 46 million uninsured Americans in 2007. Because the Census Bureau numbers count only those who lacked health insurance for an entire year, this works out to an astonishing one out of every three working age Americans (under age 65) lacking health insurance at some point during the past two years.

Every week, according to Families USA, 44,230 people lose their health insurance, which adds up to 2.3 million people losing their insurance coverage every year. I would be willing to wager that this number is not going to be decreasing anytime soon if Congress does not act on health reform and unemployment continues to rise.

Bankruptcies. According to a recent report by CNN, more than 60 percent of Americans who file for bankruptcy do so because of medical bills. Not surprisingly, the number of personal bankruptcies due to medical bills is also on the rise. For those who say it can’t happen to them because they have good health insurance, think about this: an amazing 78 percent of those who filed for bankruptcy due to medical bills actually had health insurance but were bankrupted anyway, due to coinsurance, deductibles, and medical services that were not covered by insurance.

Deaths. Higher medical bills, lost health insurance and personal bankruptcies due to medical bills are bad enough but it gets worse. For some, the lack of health insurance, for whatever reason, is even more dire. It costs them their lives. The Urban Institute estimates that 22,000 adults died in 2006 because they did not have health insurance. Families USA calculations show, for instance that, in Illinois alone, more than 18 working age residents die each week due to a lack of health insurance. In fact, in 2006, twice as many people died from a lack of health insurance as died from homicide. While homicide investigators are glorified in hit TV shows, no one seems to do remotely close to that for victims of "lack of health insurance coverage."

To many, delaying health reform by a few months or a year might not seem like much but, in terms of higher premiums, lost insurance, bankruptcies, and even deaths due to a lack of insurance, even small delays matter.

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