There's a evil wind blowing people off their fragile grasp on Employer Sponsored Insurance (ESI) plans. Our economic woes are increasing unemployment of people who can't utilize the dysfunctional and expensive COBRA system. It's not a short term trend. Unemployment is forcasted to be at 7.3% by May 2009.
We dodged a bullet with John McCain and his health care initiatives. Some here might say John McCain's health care plan never had a chance of passing even if he were elected. Some say the same about Obama now. Well, it looks like part of what McCain wanted is actually happening. People are losing their ESI's, are going onto the private market or are going bare where they will not fare well.
This is BushCo's health care legacy. His inability to understand, let alone manage the market, his inability to see how managing stock prices is not the same as managing business operations is bearing some ugly fruit - equal numbers of unemployed and uninsured. Bush's bass ackward approach to economics is pushing our unsustainable health care system over the cliff.
The Kaiser Family Foundation has seen this trend starting in 2000 and has plotted the worsening trend to 2007 and published new findings this year. The entire report is about 18 pages, but I'll list the key findings here.
Key Findings Although most Americans continue to obtain their health insurance through employers, the percent of employees with employer-sponsored insurance (ESI) has fallen. Using data from the 2007 Health Tracking Household Survey and the 2000-01 and 2003 Community Tracking Study Household Surveys, this analysis examines the factors driving the decrease in ESI since 2000.
•ESI coverage for employees declined steadily from 80.4% in 2000-01 to 75.7% in 2007.Decreases were steepest among low-income employees (in families with incomes less than 200% of poverty)—falling from 53.0% to 40.8%.
−The percent of employees with access to ESI declined from 83.6% in 2000-01 to 80.5% in 2007, with most of the decrease occurring between 2000-01 and 2003. Access declined between 2000-01 and 2003 primarily due to a decrease in family income and employment shifts to jobs that often do not provide ESI, including part-time work and employment in small firms and certain industries like retail trade.
−Between 2000-01 and 2007, ESI take up rates fell from 84.5% to 80.7%, with most of the decrease occurring after 2003. Between 2003 to 2007 employer offers of coverage continued to fall, but there was an offsetting shift of employees into jobs more likely to offer coverage. As such, declines in take-up account for a larger share of the decrease in ESI after 2003 than the earlier period.
•Between 2000-01 and 2007, the uninsured rate for employees increased from 12.8% to 14.9%, as ESI declines were not fully offset by increases in other types of coverage. Even with some offsetting increases in Medicaid, the uninsured rate among low-income employees increased substantially from 33.5% in 2000-01 to 41.3% in 2007.
•ESI rates also fell among children of employees, leading to an increase in the uninsured rate among low-income children with access to ESI. ESI coverage for children of employees decreased from 73.4% in 2000-01 to 65.9% in 2007, with even sharper declines for low-income children. Increases in Medicaid and SCHIP coverage fully offset the decreases between 2000-01 and 2003. However, after 2003, the uninsured rate for low-income dependent children with access to ESI increased from 5.9% in 2003 to 11.5% in 2007, as their ESI losses were not fully replaced with Medicaid or SCHIP coverage.
It's important to note that these findings have been plotted during the end of the Clinton Administration and throughout the Bush Administration with nary a single serious attempt to head this disaster off. You might think HR 676 is serious, and as a proposal, it is serious; but it never gained serious numbers in support. In fact, BushCo has enacted new regulations that will allow the states to charge premiums for Medicaid and to raise Medicaid co-pays.
The health insurers are seeing these same figures and fully know that people can't afford COBRA as only 7% of those eligible for COBRA opt for it. So, health insurers afraid for their bottom lines cynically gear up their crappy individual health insurance plans.
Health plans, which historically have placed little, if any, emphasis on the individual market, are launching new products — and tweaking existing ones — that cater to this growing market. And adding members on the individual side could help counter flat or declining group enrollment.
Who is "hurting"?
Wellpoint
President and CEO Angela Braly said the company's SmartSense product, which was piloted in Georgia and California a year ago, is now generating more than half of the company's new sales in California. Premiums for the product, which is aimed at students, early retirees and the uninsured, range from $33 to $178 a month for a healthy adult male. On Oct. 20, the company said the product would be expanded to Colorado with effective dates beginning Nov. 15.
This policy offers deductibles of $500-$5,000, up to 3 visits under the deductible, no maternity coverage (nothing is said about birth control) and definitely no vision or dental.
and CIGNA
"Enrollment on the commercial-group side is declining, due [in part] to the economy. And that's putting pressure on the group side. But there is an opportunity now to expand the individual segment of the business," says David Raccagni, vice president of marketing for CIGNA's individual and small-group segment. Raccagni spoke with HPW while traveling between Memphis and Knoxville, Tenn., to promote the new product line. "We think we'll do extremely well in Tennessee. We've always done well there," he says. He declines to offer specific projections.
and CIGNA is not saying what this product covers, but I did glean some info from their web site:
In order to target the best insurance at the best price for yourself, consider the following guidelines:
* Individuals usually buy group health insurance because it is less costly.
* It will help you to learn about the various networks associated with the different types of group insurance (HMOs, PPOs, POSs, and Health Savings Accounts).
* Raising your deductible will always lower your premium.
* When you have narrowed your choice to two group insurance policies, compare the following of both: premiums, co-payments, deductibles, speculated out-of-pocket expenses, percentages of fees paid, maximum limits on each claim and on lifetime claims. It will help to make a chart.
* If you have less than perfect health, you may not be accepted for individual coverage.
Even WallStreet is seeing through health insurers' attempts to salvage their market share and quote New York State's Attorney General, Andrew Cuomo:
Getting insurance companies to keep their promises and cover medical costs can be hard enough as it is...But when insurers like United create convoluted and dishonest systems for determining the rate of reimbursement, real people get stuck with excessive bills and are less likely to seek the care they need."
JDWolverton's 2009 Health Care Forecast:
In 2009 the Health Care "free market" will respond to the economic crisis with an array of ineffective or marginally effective products meant to primarily help their bottom line. The new health care insurance products are designed for the young and healthy. They will exclude expensive care, unusual care and specialty care. These products will not be a solution for those who need serious health care relief who make too much for Medicaid and are not disabled enough to qualify for SDI. The U.S. will continue to ration care according to income until Congress takes responsible and comprehensive action.
Due to an ineffective free market response, look for the uninsured rate to increase to 48 million or higher.
From now until President-Elect Obama's inaugeration, anticipate political attempts to hijack government response to the health care crisis. Look for and respond to Bush's continued Executive Orders that will curtail coverage, eligibility and accessibility. Know it will take Obama at least 60 days to recind Bush's Executive Orders. Be prepared for more health disinformation than usual to come out of the mouths of Malkin, Limbaugh, Hannity, O'Reilly and Buchanan. Don't expect the likes at Morning Joe or David Shuster or Wolf Blitzer to do their homework on health care; it's easier for them to shoot from the mouth first and research later....and CNN's Sanjay Gupta has no clue about health care policy, it's not his schtick. Look forward and prepare for a rough health care ride over the next 60 days.
Once President-Elect Obama takes over the Presidency it will take several weeks if not months to undo the damage wreaked by this malignant administration and more weeks and months to realign health care policy toward effectiveness. Look for easy policy changes first such as expanding SCHIP and eliminating the Medicare disability waiting period. After that, it'll be a fight to get to Universal Health Care. Single-Payer? That'll be uglier still.