As the costs of health insurance rise, the number of people who cannot afford it rise, too. An article in the Los Angeles Times (registration required) addresses the issue of people spending more of their income on health insurance, to the point where they can no longer afford coverage. Working families are devoting as much as 25% of their income for health insurance, forcing them to reduce other expenditures drastically. Of course, this is not a new issue. We blogged it back on March 9, 2004.
“More people are nearing a tipping point,” says Mark Goldberg, senior vice president for policy at the National Coalition on Health Care, an organization of businesses, provider groups and pension funds that advocates for affordable healthcare. “Eventually, something has to give.”
Like the house-rich, cash-poor who stretch their finances to pay for housing, those who are barely holding on to their coverage are increasingly known as the “insured poor.” Eventually, many probably will lose the battle, joining the 45 million Americans without medical coverage.
The Times article points out that more employers also are capping the amount they spend on health costs, meaning they’re no longer increasing what they contribute to an employee’s plan. So as premiums rise, employees are on the hook for paying for them, which in effect is a cut in pay by the amount of the increase. In addition, as premiums climb higher and higher, a small but growing number of companies, mostly smaller firms, have started dropping employee health insurance altogether.
The Kaiser Foundation estimates that in 2001 about 15% of the workforce lacked health coverage. In Florida, the figure appears to be 20%. While a number of states have gotten involved to the point of providing coverage for minors, the needs of adults have not really hit the radar screen.
Implications for Workers Compensation
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