Health Insurance
Approximately 45.3 million Americans lacked health insurance in 2004. In the span of a year, this number increased by 1.3 million people, most of whom had lost employer-based coverage and 30 percent of whom had middle-class incomes. The result is fewer people with health insurance, higher costs to obtain coverage, and increasing pressures to alter the financing of health care and the expansion of insurance access.
Katherine Swartz, professor of health policy and economics, delivered a talk on "Changes in the Uninsured, Reinsurance, and Rethinking How We Pay for Health Insurance," on July 24. Swartz is author of Reinsuring Health: Why More Middle Class People Are Uninsured and What Government Can Do.
Swartz described several factors that have played a role in the current state of health care insurance access, affordability, and coverage. The economy has changed. There has been a shift from manufacturing to service jobs, with an accompanying increase in private-sector employees who work in firms with fewer than 50 employees. These changes have altered the employer-employee relationship, with more potential employees viewing health care coverage as an incentive to work somewhere.
This incentive, however, comes at a cost to employers. Per capita health care expenditures rose from $2,612 in 1980 to $6,697 in 2005 (both in 2005 dollars), and there are far more treatments available now than there were 25 years ago.
"Employers are trying to reduce their current role in sponsoring health insurance for their employees, and most of all, they are trying to reduce the amount of money they pay for employer-sponsored health insurance,'' said Swartz.
One way employers are limiting their costs is by hiring contract workers who do not receive benefits, she noted. Many of these are middle-class workers and younger workers. The lack of insurance among these groups pressures policymakers, who must consider the needs of the uninsured and of employers. The result has been increased interest in public programs that support private insurance markets and expand access, said Swartz.
At the moment, individual U.S. states are grappling with the issue. Massachusetts has enacted a plan that went into effect on July 1, 2007. The goal of these types of approaches is to offer a kind of universal coverage, with a mix of public and private coverage and with subsidies to working families to purchase private policies. Similar ideas are being discussed in about 20 U.S. states, said Swartz.
In the end, she said that the U.S. will likely adopt some type of national health insurance, with the role of private insurance companies limited to processing claims, much as they do now for the federal Medicare/Medicaid program for the elderly and disabled. But that could take years, she predicted.
In the meantime, individual states like Massachusetts must be allowed to experiment, work out problems, and show the way. "Ultimately, this is a national problem,'' Swartz said.
—Michael Lasalandra contributed to this article.
Copyright, 2009, President and Fellows of Harvard College
