Slumping economy boosting number of uninsured Americans
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* Milan Korcok

The downturn in the US economy, which was already well under way before the Sept. 11 terrorist attacks sent shockwaves through financial markets, is stoking fears that many more Americans will be forced to live without health insurance. A recent survey of employer-sponsored health-benefit plans by the Kaiser Family Foundation and the Health Research and Educational Trust (HRET) indicates that premiums for employer-sponsored health insurance jumped 11% between spring 2000 and spring 2001, peaking at an annual average of $2650 for a single person and $7053 for family coverage.

This is the largest increase in almost a decade and, according to the survey, employers intend to shift more of the cost to their employees, reversing a trend toward broader, more generous coverage spawned during the earlier economic boom.

Dr. Drew Altman, president of the Kaiser Family Foundation, says “health costs are rising while the economy is sputtering, and it looks like workers are going to pay the price.”

Jon Gabel, vice-president for health system studies at HRET, added that a strong economy had been protecting workers against increases, but the economic slowdown and relentless layoffs will soon put an end to that protection.

“With managed care in retreat, and premium and claim expenses accelerating, the situation today is the polar opposite of 5 years ago,” he said. “For employers and employees . . . [there is] more bad news just around the corner.”

Gabel noted that in September 2000, when most companies were settling their plans for the next fiscal year, the US unemployment rate was 3.9%; a year later, it had climbed to 4.9%. It is the newly unemployed, such as the thousands of dot commers and airline workers who have been laid off, who will feel the effects of lost health insurance most acutely. In the US, health insurance does not follow the worker, and leaving a job usually means leaving health insurance coverage behind. According to federal law, former employees can pick up the coverage provided by their employers for 18 months, but they have to pay the full tab — their employer's share as well as their own.

For many, that price is beyond reach. On average, employees with job-based health insurance pay only 15% of the premium for single coverage and 27% for family coverage, or an average of $30 a month for single coverage, $150 for a family. If they had to pay the full price after becoming unemployed, it would be $220 per month for singles and about $585 for families.

This assumes, of course, that employers provide health benefits, and many do not. This helps explain why more than 40 million Americans — 1 in 7 — have no health insurance.

Larry Levitt, vice-president of the Kaiser Family Foundation and coauthor of the study, concludes: “Recent growth in employer coverage helped to lower the number of uninsured Americans, but that may now be changing. . . . As the economy cools off and premiums shoot up, workers should expect health insurance to be less available, less comprehensive and more expensive.”

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[Figure1](http://www.cmaj.ca/content/165/9/1244.2/F1)

Figure. **Trickle-down effect: declining Dow Jones, more job losses, fewer people with health insurance** Photo by: Canapress