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Building On Shaky Ground

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Whatever else is said or done in the next 18 months about reforming the U.S. health care system, tectonic shifts already are well underway.

The latest evidence comes from a new Census Bureau report released last week. It found that the number of Americans without health insurance fell by 1.3 million last year, to 45.7 million from a record high of 47 million.

That's some welcome good news. Not since 2000, when the number fell by 341,000, has the number of uninsured fallen. But there are important differences between the declines of 2000 and 2007. They foreshadow significant changes to come.

One is the increasingly vital role played by government-provided health insurance. The number of people covered by Medicaid grew last year by 1.3 million. That matches exactly the drop in the number of uninsured.

But as government programs like Medicare and Medicaid are covering more Americans, employer-paid health plans are covering fewer. In 2000, for every person who gained coverage through government health insurance programs like Medicare and Medicaid, two got new coverage through an employer.

Last year, for every person who gained coverage through a job, 10 got coverage through a government health insurance plan. In short, government is picking up the slack. That can't go on much longer.

The current recession means more people have been laid off or otherwise have become poor enough to qualify for Medicaid, the health insurance program for the poor.

But the slowing economy probably will send state revenues tumbling at the same time that demand for services like Medicaid coverage is climbing. At least 26 states modestly expanded government health programs last. As revenues dry up and medical costs continue to grow, states face difficult decisions about financing continued coverage.

Even as the economy remains soft, health insurance premiums have soared; they're up 78 percent between 2001 and 2007, to an average of more than $12,000 for family coverage under a group plan.

That brings us to another of those tectonic shifts: The erosion of employer-based coverage.
The percentage of Americans with health coverage provided through their jobs actually fell slightly last year, to 59.3 percent from 59.7 percent.

The percentage of American businesses that offer health benefits to their workers has been falling steadily for a decade. From year to year, the declines have been modest. But over time, the drop has been substantial and unmistakable.

Many companies, especially those that employ large numbers of low-skill workers, no longer subsidize coverage offered to family members of their workers. That makes it more expensive and adds to the economic strain many families are experiencing.

None of this probably will figure prominently in the coming health reform debate, where rhetoric tends to lag a decade or so behind reality. In 1994, for example, the insurance industry famously warned that consumers could lose the ability to choose their doctor if the Clinton reforms passed — despite the fact that most people with private insurance at the time were in managed-care plans that already limited their choice of doctors.

This time around, the debate isn't about whether government should play a role in providing health care. It already does. Without it, millions more Americans would be uninsured. Most are poor and sick, the kind of potential customers private health insurance companies try their best to avoid.

The real debate — grounded in the fast-evolving reality of American health care — is how to create a more efficient system so that the money we're already spending goes to provide high-quality care to the greatest number of people who need it.

REPRINTED FROM THE ST. LOUIS POST-DISPATCH.

DISTRIBUTED BY CREATORS SYNDICATE, INC.




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Originally Published on Thursday September 04, 2008


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