Insurance reform’s high stakes
The health care reform bills competing for votes in Congress are attempts to counteract the swiftly rising costs and rapidly growing ranks of uninsured Americans that threaten the nation’s medical system, according to the Missouri Foundation for Health.
During a symposium on global health at Westminster College, Ryan Barker, the foundation’s health policy analyst, outlined what’s at stake for Missourians as the issue nears resolution.
Formed in 2000 as part of a settlement with former Missouri Attorney General Jay Nixon, the foundation provides $60 million annually in grants to promote health across the state. Blue Cross Blue Shield of Missouri created the foundation when the larger company became a for-profit entity, said former state Rep. Tim Harlan, who attended the symposium on Sept. 23.
U.S. per capita spending on health care has risen at a much faster rate than other nations since 1980 and rose to $6,500 in 2006.
Likewise, the number of uninsured people in the United States rose from 38.4 million in 2000 to 46.3 million in 2008. On the state level in 2008, the U.S. census estimates that 739,000 Missourians were uninsured for the entire year. Barker said a Families USA study might have provided a more accurate figure. It found that 1.5 million Missourians were uninsured at some point during 2006 and 2007, 874,000 of whom were uninsured for six months or more. With a total state population of 5.9 million, that means nearly a quarter of the state’s population has been uninsured recently.
According to the foundation’s Missouri County Level Study in 2007, the percentage of uninsured residents in the average Missouri county is 14.7. Boone County comes in below the average at 11.1 percent, a rate similar to that of other metropolitan areas. Ten working-age Missourians die each week because of lack of medical insurance, Barker said.
The percentage of the population with private health insurance dropped from 72.6 in 2000 to 67.5 in 2008, according to the census, and although large employers continued to provide insurance for employees during this decade, the percentage of small employers providing insurance decreased by 7.7 percent.
By 2008, 96 percent of firms with 50 or more employees still offered medical insurance, while only 43 percent of smaller employers offered it.
Meanwhile, 72 million Americans struggle with medical bills or debt, Barker said, probably because the total medical insurance premium for families in Missouri rose 76.1 percent between 2000 and 2007. With such price increases, over time the share of an individual’s disposable income has increased from about 3 percent in the 1930s to 16.6 percent today, which takes up a higher percentage of the family budget than food at 13 percent and housing at 14 percent.
Taxpayers and insurance customers already pay a heavy burden to carry the uninsured. By law, all patients must receive medical care in an emergency room setting, so the federal government reimburses hospitals for uncompensated care, which amounted to $42.9 billion in 2008, Barker said. This amount of uncompensated care equates to an average 2008 tax burden of $627 for a family of four.
In addition, hospitals push some of the cost of the uninsured onto those with private insurance. Missourians pay an extra $400 per family and $130 per individual on their premiums to cover the cost shift from the uninsured, Barker said.
Competing Proposals
At the end of September, three bills dealing with health care insurance were making their way through Congress.
The three bills range in price between $615 billion and $1.6 trillion, according to the Congressional Budget Office, and offer common themes, Barker said. The bills require all individuals to purchase coverage and employers to offer qualified coverage. They call for insurance market reforms and premium subsidies for both individuals and employers, create larger exchanges to spread risk over a larger pool of people and expand public programs such as Medicaid to a higher percentage of those above the poverty level.
The House version and the Senate version passed by the committee that deals with health care offer public insurance plans, while the Senate Finance Committee version proposes the formation of health cooperatives instead. Barker said cooperatives are basically revamped versions of the Health Maintenance Organization model of health care, from which the industry has moved away because of consumer objections.
Various benefit packages have been proposed, Barker said, with all three bills offering minimum benefits of preventive care, hospitalization, emergency services, prescription drugs, maternity care and provisions for mental health and substance abuse. All three bills also offer no exclusions for pre-existing conditions, no cost-sharing on preventive care, no annual or lifetime limits on coverage and coverage for dependents up to age 26, which is one year more than Missouri offers today.
Although large businesses will be generally unaffected by the proposed changes, small businesses will receive several benefits, including greater transparency, greater choice, improved coverage, tax credits and access to a new health insurance exchange that should bring lower rates and administrative costs. Likewise, under the three plans, families are projected to save $2,300 on average by the year 2020, and the individual mandate to purchase insurance will mean far fewer uncompensated costs, Barker said.
Barker said health care reform will likely benefit businesses because it would lead to fewer sick days, shorter illnesses, a lower employee turnover rate, lower administrative costs and lower premiums for employees. In addition, it would increase access to prevention and care for chronic conditions, which would eliminate or reduce the cost shift of uncompensated care and expanding coverage, all of which will result in a net gain in economic well-being of about $100 billion a year, Barker said.