May 2009

Health Insurance Reform More Urgent than Ever

During these difficult fiscal times, people are searching for ways to cut back on their spending. From eating out less frequently to putting off big expenditures, New Yorkers are doing their best to manage under bleak circumstances. While belt-tightening is usually wise, one staple that New Yorkers can’t afford to cut is their access to essential health services. Unfortunately, due to the rising costs of health insurance, many are being forced to cut back on just that.

Nationally, some 47 million people are without health insurance coverage, rendering even the most routine health care services out of reach. An even greater number of individuals are at risk of losing their coverage as they face layoffs and employer cutbacks in benefits, which are driving even more reductions in basic care.

A recent Kaiser Health Tracking Poll found that 53% of Americans say they have cut back on health care in the past year due to cost concerns. From using home remedies to solve ailments, to skipping dentist appointments and doctor check-ups, to diluting prescriptions or not filling them altogether, the majority of Americans are finding access to basic health care services unaffordable.

Even among families who have health insurance, one-fifth currently spends more than 2.5% percent of their income on health care expenses not covered by their insurance. And roughly one in five individuals is experiencing serious financial problems due to family medical expenses that could not be postponed. It’s clear from these numbers that our health care system is unaffordable for far too many Americans.

Without real reforms to lower costs and expand coverage, this problem will only grow worse, posing serious short- and long-term risks to the nation’s health and to the budgets of local, state, and Federal governments. The recent frequently-quoted article by Atul Gawande in The New Yorker highlighted that we can have good health care at a reasonable price and that more spending does not necessarily translate to better health or even better health care.

A number of organizations across the State have been working to combat this alarming trend by investigating creative solutions. It’s now time for us to acknowledge their good work and take up some of their solutions to this devastating trend. NYSHealth has helped several organizations study the rising cost of health insurance, and these organizations have produced compelling proposals to reduce costs and expand coverage. Chief among them are:

• Merging the individual and small group markets. An analysis conducted by the United Hospital Fund found that a merger between these two markets would reduce insurance premiums by an estimated 17%. For the average New York City family, that would trim $740 per month from their insurance bill.
• Eliminating regulatory requirements and mandates. In its “Rx NY” study, the Manhattan Institute found that market deregulating steps—like eliminating State benefit mandates, repealing community rating, and establishing a high-risk pool—would decrease the number of New York’s uninsured by 100,000 to 130,000 people.
• Reducing public health plan “churning.” Each year, one-third of enrollees in New York’s public health insurance plans fail to re-enroll and lose their coverage, according to a recent study by the Lake Research Partners. These disenrolled individuals make up a significant portion of New York’s uninsured, and ending these gaps in coverage would significantly reduce costs for individuals, providers, and public health administrators.
• Stabilizing primary care infrastructure. A variety of organizations across the State have shown through research and practice that improving our primary care infrastructure significantly decreases costs per patient, including 24% less for Medicaid patients, 36% less for diabetics, and 20% less for asthmatics.

Solving this issue will be difficult during the current economic crisis, and implementing solutions will require time, energy, money, and political will. But these obstacles must not prevent us from pursuing the many bright ideas out there for reforming the system. The alternative—a country where a majority of Americans cannot afford basic care and are forced to jeopardize their health—is a future we cannot let come to pass.

James R. Knickman