Health insurance costs in the United States
Encyclopedia
The cost of health insurance in the United States is a major factor in access to health coverage. The rising cost of health insurance leads more consumers to go without coverage and increase in insurance costs and accompanying rise in the cost of health care expenses has led health insurers to provide more policies with higher deductibles and other limitations that require the consumer to pay a greater share of the cost themselves. Many people with pre-existing conditions such as cancer and depression are turned down for coverage, denied coverage of those conditions or forced to pay more for coverage.
In 2004, employer-sponsored health insurance premiums grew 11.2% to $9950 for family coverage, and $3695, according to a survey by the Kaiser Family Foundation
and Health Research and Education Trust. The survey also found that 61% of workers were receiving employer sponsored health insurance.
Five years later, Kaiser’s 2009 survey found that employer health insurance premiums were $13,375 for a family and $4824 for a single person. About 60% of workers were receiving employer sponsored health insurance. Less than half (46%) of employees at small firms with 3 to 9 workers received coverage. As of 2008, the percentage of Americans receiving employer sponsored health insurance had declined for the eighth consecutive year, says the Kaiser Family Foundation.
From 1999 to 2009, Kaiser found that the insurance premiums had climbed 131% or 13.1% per year, and workers’ contribution toward paying that premium jumped 128% or 12.8% per year. In 1999, workers’ average contribution to the premium was $1543, and in 2009 it was $3515. For employers, their contribution was $4247 in 1999 and $9860 in 2009.
The lower a families’ income is, the less likely that they can purchase health insurance, according to 2008 US Census figures. About 14.5% of households with $50,000 to $75000 in income did not have health insurance. While 24.5% of households with $25,000 or less income went without health insurance.
A March 2010 study by the Center for Studying Health System Change, a Washington, DC think tank, found that out-of-pocket costs for health insurance premiums and services were rising faster than family incomes. Published in the journal Health Affairs
, the study found “…After accounting for general inflation, family incomes remained stagnant between 2004 and 2006, while out-of-pocket spending on premiums and health care services increased 8.5% over the two-year period. Overall, total out-of-pocket spending increased, on average, about 5 percent annually between 2001 and 2006, and was similar for the 2001–4 and 2004–6 periods.” The report found the largest increases in out-of-pocket expenses were for those with private health insurance, including middle- and higher-income families. The study was based on 2001 through 2006 data.
, obtaining treatment in other countries or US regions, to obtain more affordable health treatment. This is especially difficult for those impacted by cancer
, heart condition
and other serious illnesses where treatment costs can easily run into the tens of thousands of dollars or higher within a few days or weeks. According to the Kaiser Family Foundation
, 21 percent of those who apply for health insurance on their own are turned down, charged a higher price or denied coverage for their pre-existing condition. Among the conditions that be considered “pre-existing” by insurance companies are domestic violence
, cancer
, asthma
, depression and occupations such as police officer
and construction worker
.
, and essentially pay a tax on their health insurance premiums, unlike any other workers. They pay a tax of 15.3 percent of their net earnings, double the rate of wage and salary earners.
). In this income bracket, more than half of people ages 27 to 37 do not have health insurance. This number drops when people reach their 40s, but even into their late 50s, more than one-third of these Americans are uninsured.
When new health reform laws take effect, low-income families will receive subsidies to help them pay for health insurance. These subsidies will paid through higher taxes paid by people with higher incomes.
Background
The US is the “only industrialized nation that relies heavily on a for-profit medical insurance industry to provide basic health care," as Senator Diane Feinstein has said, and the Pulitzer-prize winning Politifact watchdog group has confirmed. The Kaiser Family Foundation claims that health insurance costs are driven not only by the added cost of health insurers making their profits, but also by rising health costs and administrative costs.In 2004, employer-sponsored health insurance premiums grew 11.2% to $9950 for family coverage, and $3695, according to a survey by the Kaiser Family Foundation
Kaiser Family Foundation
The Henry J. Kaiser Family Foundation , or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. It focuses on the major health care issues facing the nation, as well as the U.S. role in global health policy...
and Health Research and Education Trust. The survey also found that 61% of workers were receiving employer sponsored health insurance.
Five years later, Kaiser’s 2009 survey found that employer health insurance premiums were $13,375 for a family and $4824 for a single person. About 60% of workers were receiving employer sponsored health insurance. Less than half (46%) of employees at small firms with 3 to 9 workers received coverage. As of 2008, the percentage of Americans receiving employer sponsored health insurance had declined for the eighth consecutive year, says the Kaiser Family Foundation.
From 1999 to 2009, Kaiser found that the insurance premiums had climbed 131% or 13.1% per year, and workers’ contribution toward paying that premium jumped 128% or 12.8% per year. In 1999, workers’ average contribution to the premium was $1543, and in 2009 it was $3515. For employers, their contribution was $4247 in 1999 and $9860 in 2009.
The lower a families’ income is, the less likely that they can purchase health insurance, according to 2008 US Census figures. About 14.5% of households with $50,000 to $75000 in income did not have health insurance. While 24.5% of households with $25,000 or less income went without health insurance.
A March 2010 study by the Center for Studying Health System Change, a Washington, DC think tank, found that out-of-pocket costs for health insurance premiums and services were rising faster than family incomes. Published in the journal Health Affairs
Health Affairs
Health Affairs is a peer-reviewed healthcare journal established in 1981 by John K. Iglehart. It was described by The Washington Post as "the bible of health policy". Health Affairs is indexed and/or abstracted in PubMed, MEDLINE, EBSCO databases, ProQuest, LexisNexis, Current Contents/Health...
, the study found “…After accounting for general inflation, family incomes remained stagnant between 2004 and 2006, while out-of-pocket spending on premiums and health care services increased 8.5% over the two-year period. Overall, total out-of-pocket spending increased, on average, about 5 percent annually between 2001 and 2006, and was similar for the 2001–4 and 2004–6 periods.” The report found the largest increases in out-of-pocket expenses were for those with private health insurance, including middle- and higher-income families. The study was based on 2001 through 2006 data.
Pre-existing conditions
People with pre-existing conditions typically cannot obtain any, or at best, limited coverage or more costly coverage for those conditions. This situation is expected to be corrected by the health reform bill being considered by the US Congress in early 2010. Currently, those with pre-existing conditions must pay the cost out-of-pocket, and some resort to medical tourismMedical tourism
Medical tourism is a term initially coined by travel agencies and the mass media to describe the rapidly-growing practice of travelling across international borders to obtain health care...
, obtaining treatment in other countries or US regions, to obtain more affordable health treatment. This is especially difficult for those impacted by cancer
Cancer
Cancer , known medically as a malignant neoplasm, is a large group of different diseases, all involving unregulated cell growth. In cancer, cells divide and grow uncontrollably, forming malignant tumors, and invade nearby parts of the body. The cancer may also spread to more distant parts of the...
, heart condition
Heart disease
Heart disease, cardiac disease or cardiopathy is an umbrella term for a variety of diseases affecting the heart. , it is the leading cause of death in the United States, England, Canada and Wales, accounting for 25.4% of the total deaths in the United States.-Types:-Coronary heart disease:Coronary...
and other serious illnesses where treatment costs can easily run into the tens of thousands of dollars or higher within a few days or weeks. According to the Kaiser Family Foundation
Kaiser Family Foundation
The Henry J. Kaiser Family Foundation , or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. It focuses on the major health care issues facing the nation, as well as the U.S. role in global health policy...
, 21 percent of those who apply for health insurance on their own are turned down, charged a higher price or denied coverage for their pre-existing condition. Among the conditions that be considered “pre-existing” by insurance companies are domestic violence
Domestic violence
Domestic violence, also known as domestic abuse, spousal abuse, battering, family violence, and intimate partner violence , is broadly defined as a pattern of abusive behaviors by one or both partners in an intimate relationship such as marriage, dating, family, or cohabitation...
, cancer
Cancer
Cancer , known medically as a malignant neoplasm, is a large group of different diseases, all involving unregulated cell growth. In cancer, cells divide and grow uncontrollably, forming malignant tumors, and invade nearby parts of the body. The cancer may also spread to more distant parts of the...
, asthma
Asthma
Asthma is the common chronic inflammatory disease of the airways characterized by variable and recurring symptoms, reversible airflow obstruction, and bronchospasm. Symptoms include wheezing, coughing, chest tightness, and shortness of breath...
, depression and occupations such as police officer
Police officer
A police officer is a warranted employee of a police force...
and construction worker
Construction worker
A construction worker or builder is a professional, tradesman, or labourer who directly participates in the physical construction of infrastructure.-Construction trades:...
.
Self-employed
The 9 million self-employed workers have a greater challenge than many people to find affordable health insurance. They represent 8 percent of the US labor forceLabor force
In economics, a labor force or labour force is a region's combined civilian workforce, including both the employed and unemployed.Normally, the labor force of a country consists of everyone of working age In economics, a labor force or labour force is a region's combined civilian workforce,...
, and essentially pay a tax on their health insurance premiums, unlike any other workers. They pay a tax of 15.3 percent of their net earnings, double the rate of wage and salary earners.
Low-income families
For Americans earning less than $24000 per year, few have health insurance, or, they rely on government insurance (MedicaidMedicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
). In this income bracket, more than half of people ages 27 to 37 do not have health insurance. This number drops when people reach their 40s, but even into their late 50s, more than one-third of these Americans are uninsured.
When new health reform laws take effect, low-income families will receive subsidies to help them pay for health insurance. These subsidies will paid through higher taxes paid by people with higher incomes.
State cost-control efforts
- California: On March 23 2010, the California State Assembly’s Health Committee passed a bill that would require health insurers and health maintenance organizations to have same strict regulation that has covered automobile and other types of property insurance for the last two decades. The bill would require approval of some rate hikes by state agencies, and must next be considered by the state legislature.
- Iowa: In March 2010, Iowa senior advocates and the AARP asked state legislators to act on a measure that would require state regulators to hold hearings when rate increases are proposed and issue an annual report about insurance rates.
- Massachusetts: The State of Massachusetts held a three-day hearing in March 2010 to discuss ways to better control health insurance and other costs. Addressing these costs, Massachusetts Secretary of Health and Human Services Dr. JudyAnn BigbyJudyAnn BigbyJudyAnn Bigby is the current Secretary of the Executive Office of Health and Human Services of the Commonwealth of Massachusetts.Prior to becoming Secretary, Bigby was a primary care physician and medical director of Community Health Programs at Brigham and Women's Hospital...
said "As we examine all of the causes of increasing health care costs and implement reforms, we must strive to bring premiums down without sacrificing access to care or requiring consumers to pay more out of pocket."
See also
- Healthcare reform
- Health careHealth careHealth care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
- Health care politicsHealth care politicsHealth policy can be defined as the "decisions, plans, and actions that are undertaken to achieve specific health care goals within a society." According to the World Health Organization, an explicit health policy can achieve several things: it defines a vision for the future; it outlines...
- Health economicsHealth economicsHealth economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and health care...
- Health insurance in the United StatesHealth insurance in the United StatesThe term health insurance is commonly used in the United States to describe any program that helps pay for medical expenses, whether through privately purchased insurance, social insurance or a non-insurance social welfare program funded by the government...
- Health insurance exchangeHealth insurance exchangeA health insurance exchange is a set of state-regulated and standardized health care plans in the United States, from which individuals may purchase health insurance that is eligible for Federal subsidies...
- Health insurance mandateHealth insurance mandateA health insurance mandate is either an employer or individual mandate to obtain private health insurance, instead of a National Health Service or National Health Insurance.-United States:...
- Health insuranceHealth insuranceHealth insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
- Health maintenance organizationHealth maintenance organizationA health maintenance organization is an organization that provides managed care for health insurance contracts in the United States as a liaison with health care providers...
- Insurance in the United StatesInsurance in the United StatesInsurance in the United States refers to the market for risk in the United States of America. Insurance, generally, is a contract in which the insurer , agrees to compensate or indemnify another party for specified loss or damage to a...