October 1, 2009

Health Care Under Republican Rule: Higher Costs, More Bankruptcies, Less Coverage

Republicans controlled the White House for eight years and both the White House and Congress for six years - they never undertook any serious legislation to reform health care. As a result, costs soared, bankruptcies due to medical costs jumped by fifty percent and now, Americans pay a hidden tax of $1,100. We can’t let this continue – Senate health insurance reform will curb the rising costs of health care for American families and American businesses.

WHAT HAPPENED TO HEALTH CARE UNDER REPUBLICAN RULE?

Americans Paid a Significant Hidden Tax.  In 2005, for the first time, Dr. Kenneth Thorpe measured the impact on health insurance premiums of care for the uninsured, finding that family health insurance premiums were $922 higher due to this cost shift. A recent study updated Dr. Thorpe’s work, finding that in 2009, premiums for family coverage are a national average of $1,100 higher than they would otherwise be – the financial impact of the uninsured on health insurance premiums rose by 19 percent in just four years. [Families USA, 6/2005; B. Furnas and P. Harbage, 3/2009]

Premiums Doubled.  Over the past 9 years, premiums for employer-sponsored health insurance have more than doubled, a growth rate six times faster than cumulative wage increases. [Kaiser Family Foundation/Health Research and Educational Trust, accessed 7/25/2009]

Administrative Costs Soared. Between 2000 and 2006, the amount of money health insurers spent on just administrative costs jumped from $264 per enrollee to $453 per enrollee, a 72 percent increase.  [Kaiser Family Foundation, 1/1/2008] 

Health Care Costs Consumed Thirty-Three Percent of American Adults’ Income.  In 2001, 21 percent of American adults spent 10 percent of their income on health expenses. Six years later, that rate increased by more than half, with 33 percent of Americans dedicating such a high portion of their income to health care bills. [Commonwealth Fund, 8/2008]

Bankruptcies Due to Medical Costs Jumped Fifty Percent.  In 2001, 46 percent all Americans filing for bankruptcy – 2 million people – pointed to medical costs as a reason for their filing.  Under a conservative definition of medical bankruptcy, 62 percent of all bankruptcies in 2007 were due to medical costs.  Using detailed data, researchers found that the rate of medical bankruptcy increased by 50 percent between 2001 and 2007. [D.U. Himmelstein, et al, Health Affairs, 2/2/05; D. U. Himmelstein, et al, The American Journal of Medicine, 2009]

Twenty-Eight Percent of Americans Acquired Medical Debt.  A recent study reported that 49 million people, or 28 percent of the population, said they were paying off medical debt in 2007, up from 21 percent in 2005.  Of those, one-quarter (24 percent) were carrying $4,000 or more in debt and 12 percent had $8,000 or more.  [The Commonwealth Fund, 8/2008]

Cost of Prescription Drugs Jumped Dramatically.  Total spending on prescription drugs jumped from $120.6 billion in 2000 to $216.7 billion in 2006.  Average retail prescription prices rose by 6.9 percent each year from 1997 to 2007, jumping from $35.72 to $69.91, more than two and a half times the annual inflation rate over the same period.  [A. Catlin, et al, Health Affairs, 2/2008; Kaiser Family Foundation, 9/2008]

Fewer Firms Now Offer Coverage.  The percentage of non-elderly individuals with employment-based health benefits decreased from 68.4 percent in 2000 to 62.2 percent in 2007.  Americans employed by small businesses fared worse over the same period, as the percentage of small businesses offering health insurance coverage to their employees dropped from 68 percent to 59 percent. [Employee Benefit Research Institute, 9/2008; Kaiser Family Foundation/Health Research and Educational Trust, accessed 7/25/09]

Total Health Spending Increased Fifty-Five Percent.  Between 2000 and 2007, the United States’ per person spending on health care jumped from $4,789 to $7,421, an increase of 55 percent in just seven years. Over the same period, health care costs consumed an increasing share of the Gross Domestic Product (GDP), rising from 13.8 percent to 16.2 percent.  Growth in health expenditures substantially exceeded growth in the GDP between 2000 and 2007; the GDP grew by five percent, while national health expenditures grew by 7.5 percent.  [Kaiser Family Foundation, 3/2009] 

America Lost Economic Value Due to the Uninsured.  In 2003, the Institute of Medicine estimated the U.S. lost between $65 billion and $130 billion due to the poorer health and shorter lives of the uninsured.  A more recent study estimate that the U.S. economy will lose between $124 billion and $248 billion this year due to the “uninsured Americans who live shorter lives and have poorer health.” [Institute of Medicine, 6/2003; Center for American Progress, 5/29/09] 

WHO PROFITED FROM REPUBLICAN RULE?

Insurance Companies and CEOs Racked Up High Profits and Salaries.  In 2000, the 10 largest publicly traded health insurance companies had profits of $2.4 billion.By 2007, profits at those firms had jumped to $12.9 billion, a 428% increase.In 2007, CEO salaries at these firms were $118.6 million, or $11.9 million each.  [Health Care for America Now, 5/2009]

Prescription Drug Companies’ Profits Soared.  In 2007, prescription drug companies had a profit margin of 15.8%.The same year, profit margins at all Fortune 500 firms were 5.7%.[Kaiser Family Foundation, 9/2008]

WHAT WILL HAPPEN TO HEALTH CARE IF WE DO NOTHING?

People Getting Health Care Through Their Jobs Will Plummet. A report from the Robert Wood Johnson Foundation and Urban Institute found that in the next ten years, “(I)n every state, the share of population getting health care through their job would fall; in more than half the states, the decline would be greater than 10%.” [Wall Street Journal, 9/30/09]

 State Spending on Medicaid, CHIP Will Rise.  A report from the Robert Wood Johnson Foundation and Urban Institute found that in the next ten years, “(E)very state’s spending for Medicaid and the Children’s Health Insurance Program (CHIP) would rise by more than 75%.”  [Wall Street Journal, 9/30/09]

Uncompensated Care Will Double.  A report from the Robert Wood Johnson Foundation and Urban Institute found that in the next ten years, “(I)n 45 states, the amount of uncompensated care in the health system would more than double.”  [Wall Street Journal, 9/30/09]

Premiums Will Nearly Double.  A recent study estimates that by 2016, the average cost of family employer-sponsored health insurance will top $24,000, an 83 percent increase over 2008 premium levels. [New America Foundation, 11/2008]

In Over Half the States, Number of Uninsured Will Grow by 30 Percent.  A report from the Robert Wood Johnson Foundation and Urban Institute found that in the next ten years, “(I)n 29 states, the number of those without insurance would grow by more than 30%.”  [Wall Street Journal, 9/30/09]

American Businesses Will Spending on Health Care Will Double.  A report from the Robert Wood Johnson Foundation and Urban Institute found that in the next ten years, “(N)ationally, spending by American businesses for their workers’ health care would double.”  [Wall Street Journal, 9/30/09]

Individuals and Families Could Spend Up to 68 Percent More on Health Care. A report from the Robert Wood Johnson Foundation and Urban Institute found that in the next ten years, “(I)ndividual and family spending on health care would jump by 46% to 68%.”  [Wall Street Journal, 9/30/09]

 

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