Risky Business: Working People Losing Health Coverage

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Abstract:

Personal bankruptcies in Washington State have tripled over the past fifteen years. Of the nearly 40,000 bankruptcies filed in 2003, approximately half were due to medical debt. The primary factor contributing to this trend is increasing health care costs, which have forced many working people and their families to pay more than they can afford for out-of-pocket expenses including health insurance premiums, co-payments, hospital and clinic expenses, and prescriptions. This is just the tip of the iceberg.

Over the last three years, health insurance premiums have risen four times faster than worker’s earnings. Co-payments and deductibles have also increased significantly. Lower income employees have been hit especially hard by these increases, with many now paying nearly 17 percent of their income in out-of-pocket health care expenses. The result is that health insurance and other health care costs are simply becoming unaffordable for many Washington families. Without the ability to reduce or eliminate major expenses like housing or food, many are taking a calculated risk with their health and their children’s health and are forgoing health insurance in order to feed and house their kids, pay for clothing and pay taxes. There are few alternatives for these families. They are taking short-term risks, but are making responsible decisions in doing so.

Families of low-income workers without employment-based health insurance need access to state programs like Medicaid and the Basic Health Plan (BHP) in order to access health services and to avoid accruing insurmountable medical debt. Although safety net providers across the state have traditionally provided care to patients regardless of their ability to pay, as the rates of uninsured and underinsured have increased, many of these providers have become overwhelmed by the demand and are struggling to care for all of those in need. Medicaid and BHP are integral for financing the health care of those who cannot otherwise afford it.

The health consequences of uninsurance or underinsurance are as devastating as the financial consequences of inadequate coverage. Low-income workers and their families who do not have sufficient insurance get less preventive care, have worse health overall, and die more frequently those with adequate health coverage. In fact, over three hundred people in Washington die each year due to insufficient health insurance. Families that do not have access to either employer sponsored insurance or to a public insurance plan risk suffering worse health and have an increased chance of financial ruin.

Uninsurance and underinsurance also have profound negative effects on our communities and economy. For instance, the burden of uninsured children is borne by schools, doctors’ offices, community health centers, local hospitals and social agencies. In addition, Washington’s hospitals, clinics and physicians provide over $300 million annually in uncompensated medical care, a cost that must be shifted to people who can pay for health services. The safety net is straining with too many patients and too few resources. Community health centers and public hospitals like Harborview Medical Center do not have the capacity to provide primary care, much less specialty care, for all of the uninsured and underinsured.

Most people believe families, employers and the public sector should share the financial burden for health coverage. This belief is shared across political lines. Working people, employers, and public decision-makers must come together to develop solutions to ensure working people and their families have access to affordable health insurance and health care services. This will require affordable employer-sponsored insurance, improved access to publicly sponsored insurance, and limits to the growth of health care costs. The solution should not be to exclude working people and their families from affordable health care, or to shift the costs to those who are the most vulnerable.