On the eve of new unemployment figures to be released by California’s Employment Development Department, a new Health Access study documents an increasing rate of uninsurance to accompany the growth in unemployment, with at least a half-million Californians losing health coverage in the last 18 months of recession.
A second, national study shows how current trends, especially the erosion of employer-based coverage, could leave millions more uninsured over the next 10 years. Under the best economic scenario, this could result in 53 million Americans becoming uninsured; under the worst scenario, 66 million could lose coverage.
Both studies document the very high cost of maintaining the status quo. The need for health investment and health reform is urgent, as California legislators begin to consider significant health care cuts, but also as key Congressional committees start to consider comprehensive health reform–reforms which could change these trends.
The new Health Access report, “Resuscitating an Ailing Economy: Investing in Health Care,” finds:
* As a result of the economic recession, over 1 million Californians have become unemployed in the past 18 months.
* As families lose jobs that provide coverage, over 500,000 Californians have become newly uninsured.
* These numbers may increase when the Economic Development Department releases new information about the state’s unemployment figure (now at 11.2%) on Friday, May 22nd.
* The report suggests that investment in health coverage programs and health reform can prevent Californians from becoming uninsured, can help create jobs and spur economic growth — as well as prevent negative health, economic and community impacts of increased uninsurance.
The report is available at:
The new Robert Wood Johnson Foundation (RWJF) report, “Health Reform: The Cost of Failure,” had researchers from the Urban Institute prepared the analysis using its Health Insurance Policy Simulation Model, estimating how coverage and cost trends would change between now and 2019. The study examined three alternative scenarios, including a “best case” and a “worst case” based on employment, income growth, and increase in health care costs. The report finds:
* Individuals and families would see health care costs dramatically increase. Total individual and family spending on premiums and out-of-pocket costs could increase 68 percent by 2019 in the worst-case scenario. Even under the best case scenario, health care costs would likely increase at least 46 percent.
* Businesses could see their health care costs double within 10 years. The model shows that employer spending on premiums would more than double – from $429.8 billion in 2009 to $885.1 billion in 2019. Even under best-case economic conditions, employer spending on health insurance premiums would increase 72 percent. The result would likely be far fewer Americans being offered or accepting employer-sponsored health insurance (ESI). Estimates suggest a drop from 56.1 percent of Americans being covered by ESI in 2009, to as few as 49.2 percent by 2019.
* Spending on government insurance programs could double. In the worst case scenario, spending on Medicaid and the Children’s Health Insurance Program could increase from $251.2 billion this year to $519.7 billion in 2019, as more people are priced out of private insurance and become eligible for government programs. Enrollment in these programs could increase to 20.3 percent in 2019 in the worst case, or one in every five Americans. That’s an increase of 13.3 million people from current figures.
* Millions more people would be uninsured. The model projects that without reform, 65.7 million people could be uninsured by 2019, compared to 62.2 million in the intermediate case and 53.1 million under the best case. The report makes clear that the biggest effects of not having health reform would be felt by families with moderate incomes, who have less access to public coverage. Under the model, the number of middle-income earners without insurance would increase sharply from 12.5 million in 2009 to as many as 18.2 million in 2019.
“We need national health reform not just to prevent our broken health system from getting worse, but to allow for a sustainable economic recovery that is not burdened by increasing health care costs and rising numbers of uninsured.” said Wright. “We need health reform that brings down the cost of health care, and provide coverage that Californians can count on when they need it.”
For more information about the reports, the implications for proposed health care cuts in California, or for the debate in Washington, DC, on health care reform, contact Health Access, or visit our newly updated website and blog, updated daily, at http://www.health-access.org/.