POLICY: HSC confirms that employer-based insurance fell during recession

Given the disarray in the individual insurance market, the latest survey from the Center for Health System Change (here’s the News Release and here’s the longer issue brief) proves that economics is alive and well. There is such a thing as an income effect and a price effect–so if business income/revenue goes down and the price of insurance goes up, well funnily enough a lot less people are going to be getting health insurance from their employers. And somewhere mixed in that is the little nugget that if you don’t have a job any more, as we used to say in England, you have two chances of having an employer provide you with health insurance: No chance and (As this is a family blog. I’ll censor the rest of this remark).girlie-men or no girlie-men, and the other is more people on both sides of the patient-provider relationship discovering how inadequate Medicaid is. Furthermore most of the increase was for children rather than adults, so there was some relative shift in who within families got insurance, but even so public sector insurance rolls expanded for adults too.The Blogging of the President which explains (to my satisfaction at least) where this all will drift to: The reason that eventually we’ll get to some kind of compulsory national health care system is grounded in the fact that for the last hundred years if you (or your employer, or the government if like the elderly you had some power and could force the burden onto other taxpayers ) could not afford insurance, you went without. That meant that the medical system could keep charging as much as it liked because those who couldn’t afford it would be dumped into the safety valve known as uninsurance. In such a system two things eventually will happen.

The number of those with employer-provided insurance fell from 67% in 2001 to 63% in 2003. That fast a fall in that short a space of time is pretty significant, and of course starts to throw many more people into the individual insurance market and/or into uninsurance, which are pretty closely related if you’re sick anyway. This also confirms why health insurance is becoming a bigger and bigger deal on the campaign trail as more people are now more aware that growth in health insurance premiums actually costs them something directly (rather than depresses their incomes indirectly as it has for decades now).

The other thing that has been going on is another expansion of Medicaid, which almost mirrors the huge expansion of Medicaid during the early 1990s recession. The number of people getting insurance from public sources went up by 3%. However, that in turn means two things. One is massive pressure on state budgets,

But the big overall message is that we are moving whether we like it or not into a system where the combination of government programs (including Medicare of course) and individual insurance will eventually overtake the employer-based group insurance that has been the mainstay of the US health insurance "system" (and I use that word very loosely). How fast that transition happens depends somewhat on politics, but eventually those with good health benefits at work will be in the minority.

All of this will increase the eventual pressure that we’ll face as a nation to get to grips with this. In fact I’m going to repeat a para here that I wrote in the comments over at

First, costs which have been allowed to grow without any controls will eventually become too great for those paying the bills (esp. large employers). They will continue to push people out into un or under-insurance, which is exactly what the HSC study is finding.

Second, the number of un or under-insured will become so great and politically powerful, that it will end up creating a compulsory "national insurance" system. That system will shift the burden from employers to the taxpayer, which will coincidentally make the employers happy (and most people too, if international surveys are to be believed..)

And once everyone’s in the system and there’s a direct correlation between taxes and health spending, healthcare spending will come under much tighter control. After all we’re Americans and we hate taxes (so long as levied by government rather than the health care system which calls them premiums).

This happened in the rest of the world between 1945 and 1970. It nearly happened in America in 1993, and it will happen sometime in the next 20-40 years here. This isn’t an ideological argument, it just has to play out that way unless health care costs go downwards over that time, and I hasten to guess that not even Mark (Note: Mark was a previous poster in this thread who hated Canadians and poor people) thinks that will happen.

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