AHRQ Press Release

NCHC Writer
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The confluence of powerful economic forces, fueled by the terrorist attacks, have unleashed a “perfect storm” that could increase dramatically the number of uninsured in the U.S. – with as many as 6 million more people losing their health care coverage over the two-year period of 2001 and 2002.

A report by the National Coalition on Health Care, A Perfect Storm: The Confluence of Forces Affecting Health Care Coverage, identifies those forces that could cause significant erosion in job-based coverage, mainly:

· The rapid increase over the last two years in health insurance premiums, which could cause employers to drop health insurance for their employees or pay a smaller share of the premiums and pass on more of the costs to their employees. In turn, employees may not be able to pay the additional out-of-pocket costs and will have to drop health insurance even if it is offered. These problems will be particularly severe for small firms that will be most affected by the economic downturn.

· The accelerated rise in unemployment resulting from the economic downturn and exacerbated by the terrorist activities, can result in more people going without health insurance because they are unemployed and cannot obtain or afford individual insurance.

Health insurance premiums for employers are rising an average of 11 percent in 2001. For small businesses, those increases are rising 12.5 percent and higher. Premium increases are far outpacing overall inflation (3.3 percent in 2001). While nearly 39 million people were uninsured for the entire year in 2000, the number could climb to 45 million in 2002, unless our society takes substantial actions to stem the incoming tidal wave of the uninsured.

“During the mid-1990s we had the most vibrant economy in recent history, and still almost 5 million people were added to the ranks of the uninsured during that time,” said Henry E. Simmons, M.D., president of the National Coalition. “Now, with the economic downturn and the events of September 11, we are experiencing greater unemployment and health insurance premiums in 2002 are expected to outpace general inflation by the greatest margin in our history. Never have we seen such forces converge on our society and never before have they posed such a threat to the middle class,” he added.

“The rapidly rising number of people without health insurance will compound already serious cost and quality problems in the health care system. Without universal coverage, you cannot assure quality, and in the absence of improved quality data, you cannot contain costs. Thus, you have a vicious cycle and a health care system that is seriously broken,” Simmons said.

The National Coalition is the nation’s largest, most broadly representative alliance working to improve America’s health care system. The non-profit, non-partisan Coalition is comprised of over 80 member groups, including large and small businesses, unions, consumer, provider and religious groups.

Copies of the entire report are available on our web site at www.nchc.org. Copies can also be obtained from the Coalition at (202) 638-7151.