September 21, 2011
The Heath Affairs magazine arrived this week at my Capitol office. The headline shouted to me: “New Urgency to Lower Health Costs.” The words echoed the calls of many who pay too much and get too little for their health insurance dollar.
Often conversations with constituents turn to the continued struggle folks face with rising health premiums. New research published this month in the journal Health Affairs confirm when it comes to health care we are paying more and getting less.
One study by the Rand Corporation found workers’ monthly health care bills doubled in the past ten years. The L.A. Times reported, “Rising out-of-pocket medical bills were so corrosive…they virtually wiped out income gains over the decade, leaving the typical family with just $95 more a month to spend on things other than health care in 2009, compared with 1999.”
The Health Affairs article reported the typical family would have $545 more a month in 2009 if health costs had not dramatically exceeded the rate of inflation.
A study released by Commonwealth Fund found nationally the number of uninsured climbed to 52 million people under age 65. Over the past seven years the number of people with poor or inadequate health coverage grew by fifty percent. This is a 9% increase in just three years.
According to the same study, 44% of the working age population is either without any or has inadequate health coverage. Both studies look to federal health reform to bring relief when parts of the new law take effect in 2014.
America struggles with balancing the need for high quality care (in an age of rapid advances in medical technology) with the need to cover those with inadequate or no insurance and the need to hold down health costs for everyone else. We can no longer afford to spend twice as much for health care as most developed countries. Over seventeen cents of every dollar spent in our economy goes to medical care – $8,000 for every man, woman and child.
Next to access to capital, rising health costs is the most frequent concern I hear from small businesses when I ask about barriers to job creation.
Business owners still tell me about double digit inflation in premiums year after year. One employee with a large claim can put coverage out of reach for the entire company. While costs to some are increasing, others are simply priced out of the market. Hardest hit are small businesses and the self-employed including farmers.
Resolving rapidly escalating health costs would greatly improve our economy. School districts could pay teachers more. Businesses could better meet global competition.
Plans to address rising costs must resolve the question of those with no or poor health coverage. Not only are national numbers increasing, some counties I represent still report as many as 14 out of 100 people have no coverage. A recent study of Wisconsin found ten percent of those under 65 with no coverage at all.
Balancing adequate health care quality with slowing the rise in health costs and providing adequate coverage for all citizens is the goal of health reform. Passage of federal legislation caused angst among some while others saw opportunity. Regardless of one’s perspective, Wisconsin must act or be left behind.
Several federal deadlines loom.
By January 2013 states must show they are on track to create a health insurance exchange that will enroll citizens beginning January 2014. Tax credits and cost sharing to business and individuals are only available if the health insurance purchase is made through the exchange. The state must pass enabling legislation by the end of the current Legislative Session – May 2012. If a state fails to comply, the federal government will operate that state’s exchange.
Wisconsin faces a decision point.
We can continue to fight the implementation of federal health care reform in court and in public discourse or we can carefully examine the options and create a new approach within the federal rubric using our unique Wisconsin ingenuity. We can create an exchange – a competitive marketplace for health insurance – or risk the federal government sending us a one-size-fits-all approach.
The decision is ours. But we must act.