The number of Americans without health insurance could climb to 61.4 million by the year 2009 – from 43.4 million – if the price of health insurance continues to rise and the U.S. economy suffers a downturn in the next decade, a study by the National Coalition on Health Care projects.
The study, Down a Dangerous Path: The Erosion of Health Insurance Coverage in the United States, calculates that an economic slump or recession would accelerate an already steep annual loss of health insurance coverage. The unemployment rate, for example, could climb by 0.5 to 2 percentage points. Roughly half of those losing their jobs would also lose their health insurance, many for a sustained period. This “unemployment effect” alone would elevate the number of people losing health coverage in an average year from 1.1 million to as many as 1.3 million, the study finds.
An economic downturn would also put a strain on small businesses – already hard pressed to afford health insurance for their workers. The study’s authors calculate that an average 40,000 to 130,000 people each year would lose coverage as small businesses dropped coverage, laid off workers, and/or shifted health insurance costs to workers (a proportion of whom would opt not to take coverage because they could not afford the additional costs).
If an economic downturn is coupled with health insurance premiums rising at two to three times the rate of inflation – as recently projected by government researchers – the loss of health insurance coverage could be even more precipitous. The study projects that 377,000 each year would join the ranks of those without health insurance if the price of health insurance rises an average 7 percent a year between 1999 and 2008. Inflation is projected to rise an average 3 percent a year over the next decade.
All totaled, the study concludes that an economic downturn combined with rising costs for health care and health insurance could add 16 to 18 million to the ranks of the uninsured by 2009. The latter figure would mean that close to one in four people under age 65 in the U.S. would lack health insurance. In 1997, 18.3 percent of the non-elderly population was uninsured, although the number is far higher in many urban areas.
Even if rosy economic conditions prevail and the predicted rise in health care prices fails to materialize, the number of people without health insurance in the U.S. will continue to increase in the absence of major changes in the health care system. A best-case scenario would still add 8.8 million people to the ranks of the uninsured over the next decade, the study projects.
The accelerating erosion of coverage over the last few years has disproportionately affected certain population groups. Demographic trends over the next decade indicate a continuation of this dynamic. Population groups hit hardest include low- and middle-income working families, minority groups (especially Hispanic Americans), and people who work at small businesses. The near elderly (ages 55-64) are also likely to become increasingly vulnerable to a loss of coverage, the study concludes.
“The number of people without health insurance in this country is already a national disgrace,” says Henry E. Simmons, M.D., president of the Coalition. “It undermines the security of millions of families and the efficiency of our health system. This study tells us that things could get far worse if nothing is done to address the problem. Our political leaders must get engaged on this issue.”
Simmons said a rapidly rising number of people without health insurance will compound already serious cost-shifting, risk selection and quality problems in the system. The uninsured are much more likely to go without proper and timely care, which contributes to poorer outcomes and increases the cost of treating them when and where they do seek care. This leaves fewer resources to provide necessary services to all patients and to invest in quality improvements.
“The major problems in our health system are deeply interrelated,” Simmons said. “When one problem, like the rising tide of uninsured, gets worse the others do, too. It is a vicious cycle, and it is time to once again begin debating how we are going to find a comprehensive fix for a health system we all know is badly broken.”
The study presents an analysis of the major forces undermining health insurance coverage in the U.S., based on a survey of the latest research in the field. This includes a number of important studies and analyses released in just the last few months. All point in the same direction, the study’s authors say: there is a confluence of social, cultural, demographic, and economic forces that is causing a persistent erosion of health insurance coverage in the U.S.
The National Coalition on Health Care is the nation’s most broadly representative non-partisan alliance working to improve America’s health and health care system. It’s nearly 100 members include large and small businesses, labor unions, consumer groups, health professional and religious organizations. Former presidents George Bush, Jimmy Carter, and Gerald R. Ford serve as the Coalition’s honorary Co-Chairs.