September 21, 2005
More Than One In Four Workers Will Be Uninsured In 2013 As Coverage Becomes More Unaffordable, Health Affairs Article Says
Researchers Base Findings On Relationship Between Growth In Health Care Spending And Personal Income
BETHESDA, MD—More than one in four American workers under 65 will be uninsured in 2013, equaling nearly 56 million people, driven by workers’ increasing inability to afford health insurance, according to new projections posted today on the Health Affairs Web site.
Authors Todd Gilmer and Richard Kronick of the University of California, San Diego School of Medicine base their estimates of the uninsured on federal projections of health spending, personal income and other population characteristics. Their work was supported by the California HealthCare Foundation.
Because growth in per capita health spending is expected to outpace median personal income by 2.4 percentage points a year, health care coverage will continue to decline, because more Americans will find it unaffordable. While factors such as changes in employment patterns and demographic shifts have some mild effects on health care coverage, cost has the biggest effect.
For each 1 percent increase in health spending relative to personal income, the number of uninsured people increases by 246,000, the researchers say. As a result, according to their projections, 11 million more people will lack coverage in 2013 than in 2003. Based on estimates from the Institute of Medicine, this is expected to lead to an increase of 4,500 deaths annually and an increased annual loss of human capital of $16-$32 billion.
“Regardless of whether health care benefits are being paid out of employer’s or employee’s pocket, and without regard to the amount of premium contribution that employees are required to make, there is a remarkably tight relationship between affordability and coverage rates,” the authors say.
“It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance requiring contributions from some combination of employers, employees, and taxpayers. It is also unlikely that either our current system of employer-sponsored coverage or an alternative system of universal coverage will be sustainable without more effective efforts at cost containment.”
The authors add that the accuracy of their estimates of health care coverage will depend on how closely actual health spending and personal income mirror the federal government’s projections.
The 10-year projections show a smaller differential between health care spending and personal income than in the recent past. Between 1999 and 2002, per capita health care spending spiked 9.8 percent a year while median personal income rose only 2.2 percent. As a result, the authors say, uninsurance among nonelderly workers rose 1.5 percentage points, from 22.3 percent in 1999 to 23.8 percent in 2002.
Gilmer is assistant professor in the UCSD School of Medicine’s Department of Family and Preventive Medicine. Kronick is a professor in that department and chief of the Division of Health Care Sciences at UCSD.
Health Affairs, published by Project HOPE, is the leading journal of health policy.
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