What Were Those Reasons For Wanting Health Reform?

If the recent election in Massachusetts dooms health care reform this year, the number of uninsured is likely to increase, and the largest effects likely will be among employees in companies that do not provide health insurance.

According to the Kaiser Family Foundation, more than eight in ten of the uninsured are in working families—about two thirds are from families with one or more full-time workers and 14% are from families with part-time workers. Only 19% of the uninsured are from families that have no connection to the workforce.

Here are just two of the expected effects of increasing numbers of uninsured among the employed without health care reform:

Greater risk of death. In 2002, the Institute of Medicine (IOM) estimated that 18,000 Americans died in 2000 because they were uninsured. Since then, the number of uninsured has grown. Based on the IOM's methodology and subsequent Census Bureau estimates of insurance coverage, 137,000 people died from 2000 through 2006 because they lacked health insurance, including 22,000 people in 2006.

More individuals in bankruptcy. 62.1% of all bankruptcies in 2007 were medical; 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical bills. Most medical debtors were well educated and owned home. The odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.

Of course, even if health reform is enacted, without sufficient cost controls, employers will remain conflicted over health reform. Here are some problems employers face, according to the Council on Foreign Relations in a report on health care costs and U.S. competitiveness:

“The United States spent 16% of its GDP in 2008 on healthcare, higher than any other developed nation. The nonpartisan Congressional Budget Office (CBO) estimates that number will rise to 25% by 2025 without changes to federal law. Employer-funded coverage is the structural mainstay of the U.S. health insurance system. According to the U.S. Bureau of Labor Statistics, about 71% of private employees in the United States had access to employer-sponsored health plans in 2006. A November 2008 Kaiser Foundation report says access to employer-sponsored health insurance has been on the decline among low-income workers, and health premiums for workers have risen 114% in the last decade. Small businesses are less likely than large employers to be able to provide health insurance as a benefit. At 12%, healthcare is the most expensive benefit paid by U.S. employers, according to the U.S. Chamber of Commerce.

“Some economists say these ballooning dollar figures place a heavy burden on companies doing business in the United States and can put them at a substantial competitive disadvantage in the international marketplace. For large multinational corporations, footing healthcare costs presents an enormous expense. General Motors, for instance, covers more than 1.1 million employees and former employees, and the company says it spends roughly $5 billion on healthcare expenses annually. GM says healthcare costs add between $1,500 and $2,000 to the sticker price of every automobile it makes. Health benefits for unionized auto workers became a central issue derailing the 2008 congressional push to provide a financial bailout to GM and its ailing Detroit rival, Chrysler.”