The Health Care Crisis
- The average worker pays $2,088 a year for health care premiums, up from $1,656 in 2000. (WSJ, 5/8/03)
- Nearly 60 million people lack health insurance at some point in the year. (NYT, 5/13/03)
- 45 million Americans are uninsured, up from 38.7 million in 2000.
- 40 million Americans are under-insured—their coverage excludes many vital services such as preventive care or the deductibles that are so high that necessary services are not affordable.
- Two-thirds of the uninsured and under-insured are workers and their families—their employers do not provide affordable coverage or any coverage at all.
- Costs have been increasing an average of 10 to 40 percent for several years. Small businesses have experienced the most significant annual increases; by contrast, big companies have had increases of about 10 percent. (NYT 5/6/03)
- A serious medical problem is a factor behind about half of the nation's 1.5 million bankruptcy filings. (WSJ 5/14/03)
- 3,000 people lose health insurance coverage every day. A million Americans are added to the ranks of the uninsured every year.
- Employers who do not provide adequate coverage for their workers are one of the primary causes of the health care crisis. No-benefit employers shift health care costs to other employers or to taxpayers—driving up costs for everyone else and forcing other employers to cut or reduce coverage.
- Lower wage workers in high growth industries such as retail and services—generally young workers and their families—are losing health coverage faster than any other group. Insurance premium costs have gone up 55% faster for low wage workers than for higher paid executive and managers.
Wal-Mart’s Affect on Health Care
- High insurance premiums and deductibles keep more than two-thirds of Wal-Mart workers—that's nearly 700,000 workers—from participating in the co. health plan. Wal-Mart shifts the cost of health insurance to taxpayers and other employers, driving up the health costs for all of us.
- When other companies get tired of paying the bill for Wal-Mart, they drop or reduce health care benefits for their employees. There are more than 40 million uninsured working families. The more Wal-Mart grows so do the number of the uninsured.
- Executive Jay Allen said, “[Wal‑Mart employees] who chose not to participate in [Wal‑ Mart's health plan] usually get their health care benefits from...the state or federal government" (UPI, 12/2/98).
- The cost for Wal-Mart’s comprehensive family coverage is about $125-192 every two weeks.
- On a wage of $8.00 an hour with about 32 hours a week--$1,000 a month, most associates can’t afford even the low end range of Wal-Mart health insurance, $250 a month, or 25% of gross income for health insurance. Many Wal-Mart families also are eligible for food stamps or other welfare programs.
- The Walton family is worth about $102 billion--less than 1% of that could provide affordable health care for associates.
- Wal-Mart has increased the premium cost for workers by over 200% since 1993--medical care inflation only went up 50% in the same period.
- Wal-Mart charges its employees more for health care coverage and contributes less to the cost of employee health care coverage than the average employer—on average, companies pay more than 70% of premium costs, Wal-Mart pays only 50%.
The National Coalition for Health Care (www.nchc.org) identified several major forces for the erosion of American health care coverage:
- Fewer workers are getting health coverage through their workplaces or on the job. Only two- thirds of Americans get their health insurance at work.
- Cost for health insurance has skyrocketed, making it too expensive for low-income and middle income Americans to afford. For the past two decades, the cost for health coverage has gone up more rapidly than wages and family incomes. For people who cannot access employer-based health insurance, the prices for insurance are even higher.
- Health care costs are rising each day - due to advances in technology and greater number of expensive procedures.
- As many as 53.7 million Americans will be without health insurance by 2006 unless there is major, comprehensive reform of the nation’s health care system.
How do the increase costs for insurance and health care impact working families?
- More and more employers are shifting the increased costs to their employees by raising premiums and putting health insurance out of reach for many working families.
- The number of service-sector, temporary and contractual jobs are on the rise—all of which are less likely to offer health benefits than jobs in the manufacturing industries.
- An increasing number of workers in the U.S. are minority and immigrant workers. In general, immigrant workers are more likely to work at jobs that do not offer health insurance and have low-wage jobs that prevent them from buying coverage either because they cannot afford it or do not see it as a necessity.
- Welfare reform has undermined Medicaid coverage among the poor and near-poor.
- Employers are scaling back retiree coverage to cut costs and lower liability.
How do the increasing number of uninsured workers impact the coverage of families with decent health insurance?
When employers don't provide health care insurance, they aren't eliminating health care costs. They shift them to someone else. A spouse without health insurance at work is covered under a spouse's family plan at work . While this arrangement seems reasonable, the company that isn't providing health insurance just shifted the cost of its employee's health insurance to a company that is responsible enough to provide health insurance.
The company that provides insurance now faces increased costs, and in an effort to reduce costs, cuts back on coverage. As that employer reduces coverage levels, the cost is then shifted to yet another employer. Cost-shifting causes a downward spiral that is killing employer-provided health care.
The cost shifting game does not end there. The costs are passed on to taxpayers. When working families without health insurance get sick, they wind up in emergency rooms or public facilities. Taxpayers pick up the bill. Emergency room care is the most expensive, particularly for routine medical conditions like colds and the flu. Emergency care, especially unnecessary emergency care for preventable illnesses, strains resources at health care facilities, and leads to lower quality care for all of us.
Low-wage employers are shoving workers out of health insurance coverage by increasing the cost to employees. Some employers boast that they offer health insurance, but in truth, they sell health insurance to workers. Health insurance costs for low-wage workers has more than doubled in a decade, and has gone up 55% faster than the costs that corporate executives and management have to pay.
Companies hit workers twice: first, by paying low wages and, second, by charging high prices for health insurance. The result is predictable?low-wage workers don't have health insurance. That raises costs, and reduces coverage and quality throughout the whole system.
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