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The 50 million uninsured

The number of Americans without health insurance will exceed 50 million by next summer.
Friday’s employment news was just what the country needed to hear before a pre-holiday shopping weekend – a loss of over a half-million jobs in the prior month, driving the unemployment rate up to 6.7%.
That’s bad.
It’s actually worse than that. Due to the vagaries of Federal statistical collection and reporting, the unemployment rate appears to undercount the unemployed. Here’s how the NYTimes’ David Leonhardt and Catherine Rampell put it:
The number of people out of the labor force — meaning that they were neither working nor looking for work and that the government did not consider them unemployed [emphasis added] — jumped by 637,000 last month, the Labor Department said. The number of part-time workers who said they wanted full-time work — all counted as fully employed — rose by an additional 621,000.”
The number of people working part time also looks to be growing, as the average work week has shrunk to just over 33 hours.
One of the many unpleasant implications of losing a job is losing health insurance. Sure, there’s COBRA, wherein a newly-unemployed can keep insurance for a year and a half to three years if they pay the monthly premium plus an admin fee. To do that, a family will pay about $1100 a month, a huge chunk out of whatever severance and unemployment compensation the breadwinner(s) are due. For those that still have a job, they still have to get enough hours to qualify for health insurance; the declining hours worked per week stats indicate fewer and fewer Americans will meet that test, and therefore will lose their coverage.
Historically, a one percent rise in the unemployment rate adds about 1.1 million individuals to Medicaid and SCHIP rolls, and another million to the ranks of the uninsured.
Since December, the US has lost 1.9 million jobs and the jobless rate has jumped from 5 percent to 6.7 percent, increasing the rolls of the uninsured by 1.7 million. (Not all of those workers had insurance through their employers, and some will end up qualifying for Medicaid and their dependents may qualify for S-CHIP coverage in some states). Adding those unfortunates to the 45.7 million + without coverage in 2007 gives us a total of about 47.4 million.
My sense is this is the best case scenario. These days there are a lot more Americans working part time, and with more employers dropping coverage, those folks who still work are stuck – they can’t get insurance through the job and make too much to qualify for Medicaid or SCHIP in most states. Anecdotal information from conversations with insurance brokers in Florida, Colorado, and Texas is scary – most are seeing a significant drop in the number of existing customers renewing their plans for 2009, and those that are signing up are cutting benefits and raising deductibles and employee contributions.
With the unemployment rate projected to hit 8 percent by Q3 2009, we can expect the number of Americans without health insurance to hit 50 million by summer.
Apologies for starting out your week on a (very) sour note.

4 thoughts on “The 50 million uninsured”

  1. Do you think this increase in the number of uninsured will increase the likely hood of the new administration successfully passing health care reform? This might be enough to keep health care in the spotlight long enough to require some changes.

  2. This is not something that just happens to other people. The other day in my work as a psychiatrist, I provided informal consultation to a friend whose 20 something daughter is experiencing depression and took an overdose. The young woman is married to an insured man but they ‘could not afford’ to buy her coverage. She was hospitalized from the ER for a night and treated for the toxicity of her effort. She has not seen the bill but I would guesstimate that it would be in excess of $20,000 with no PPO discounts. The naiveté of her and her husband and their limited income will not absolve her of the considerable debt likely to be incurred. They are too rich for public assistance and too poor to afford her health care, or at least too ignorant to have considered the impact of not sacrificing to pay for insurance. So years of debt, possible bankruptcy and/or the hospital and doctors going unpaid (and passing it on to the rest of us) is her fate. This is not a viable way to run a railroad, but it is typical. A day does not go by without headlines about the uninsured. We don’t make education optional and the idea that insurance is tied to employment is irrational. While many of us may have skin in the current game, society deserves better.

  3. “We don’t make education optional and the idea that insurance is tied to employment is irrational.”
    1. numerous inner city schools have graduation rates around 40%, that sure sounds like it was optional to the other 60%…
    2. employment based incurance has worked for decades and the main reason for it’s decline is government regualtion and cost shifting. Compare that to the failure of Medicaid, decades of problems in VA, impending financial impolision of medicare, and trillions in debt held by state and local health plans and employer based care is the only rational solution. There is a reason 80% of those that hav it love it. The only plans with higher satisfaction are those that don’t cost the participant anything and are unsustainable.

  4. Of course, this may not be an option for all the 50 million, but a significant number of un-insured or under-insured Americans are choosing medical tourism. Often, it’s their only option.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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