Keep Your Job, Lose Your Health Insurance

These days you don't have to lose your job to lose your health care benefits, see them cut or have to pay more for them. Employers are trimming costs by decreasing their share of the cost of employee health insurance coverage or dropping coverage altogether. While this has been a growing trend over the past decade, the weak economy has forced an increase in those cuts.

According to The Washington Post, ten years ago, employers paid about 90 percent of their workers' health costs. That is down to 73 percent.

And the cost to employees will increase this year. The Washington Post outlines the bad news:

"A growing number of workers in 2009 will pay more for health benefits -- and in some cases receive less coverage -- as their employers grapple with the financial fallout of rising medical expenses and diminished revenue and profits, recent surveys of human resource officials show.

"The Corporate Executive Board found in its survey that a quarter of officials from 350 large corporations said they had increased deductibles an average of 9 percent in 2008. But 30 percent of the employers said they expected to raise deductibles an average of 14 percent in 2009. Mercer, a global benefits consulting firm, surveyed nearly 2,000 large corporations in a representative poll and found that 44 percent planned to increase employee-paid portion of premiums in 2009, compared with 40 percent in 2008." [Emphasis added]

Employees of small businesses are even more heavily affected. According to MSNBC's "Your Biz":

"It's getting ugly out there for small business owners that have been struggling to keep on paying high health insurance premiums for themselves and their workers. So ugly, in fact, that more and more are just dropping coverage. Because of ever-escalating premiums and falling sales, Craig Sumsky, director of Philadelphia-based DJ company Cutting Edge Entertainment, had to put the kibosh on health insurance for his office manager this year.

"In response, Sumsky's office manager handed in her two-week notice. She needed a job that could get her benefits, he said. Sumsky is not alone. One recent poll put out by credit card company Discover uncovered a disturbing trend: "Eighty-five percent of small business owners say they do not offer health insurance to their employees, up significantly from 77 percent a year ago and 74 percent in January 2007. Among small business owners who do offer health insurance, 36 percent say they have considered discontinuing coverage because of high costs." [Emphasis added.]

Employers cutting how much they contribute toward their health insurance is not the only reason employees' health care costs are rising. According to a new report by the U.S. Public Interest Research Group, if the health care system in this country is not reformed, premiums for Americans with employer-sponsored insurance will nearly double by 2016.

U.S. PIRG Health Care Advocate Larry McNeely says, "The health care reforms in President Obama's economic recovery plan are indispensable first steps to addressing this crisis." He adds his support for the president's economic recovery plan's investment in the health care infrastructure:

"This legislation funding of health information technology, evidence-based prevention, and comparative effectiveness research will set the stage for the broader reforms needed to address the high cost of health care."

Another important aspect of President Obama's health care reform plan is the addition of a public health insurance plan option to drive more value in our health care system by competing side-by-side with private insurance and using its bargaining power to rein in costs.

In his analysis of how a hybrid public/private plan choice would improve the U.S. health care system, "The Case For Public Plan Choice In National Health Reform", Jacob Hacker concludes that a national public health insurance plan option would allow for a much larger and broader risk pool and would be in a better position to contain overall health care costs by using its large membership in negotiating for discounts. It can also test and, where appropriate, implement evidence-based protocols, which private plans may choose to shun because of cost concerns, for treatments and payment systems, rewarding value.