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Featured Guest Blogger October 14th, 2009

Andrew Kang is a Graduate Policy Assistant at the Sloan Work and Family Research Network.

Every day we hear about the raging debate about health care in America. But politics aside, the fact is that health care directly impacts work and family concerns on virtually every level–from employer-provided health care insurance, to wages and salaries, to increasing work loads. In this three-part series, we will examine the facts about the current U.S. health care system, its impact on working families, and its  impact on American businesses.

With all of the political fighting and posturing over health care reform, it is hard to know who and what to believe. Here are some straight-up facts about our health care system stripped bare of interested biases and political rhetoric.

Facts about what we spend on health care:

• As a nation, Americans spend 18% of GDP on health care.
• Total health care spending is expected to reach $4.3 trillion in 2017, or 20% of GDP.
• In 1966, Medicare and Medicaid made up 1% of total government spending.  Today it is 20%, and rising.

AMERICANS SPEND MORE ON HEALTH CARE THAN ANYTHING ELSE:

• 8x more than education
• 12x more than food aid to children and families
• 30x more than law enforcement
• 78x more than land management and conservation
• 87x more than on the water supply
• 830x more than on energy conservation

Facts about employer-provided health insurance:

The current health care system in the United States depends upon employer-provided health care insurance. For many who are employed (roughly 90% of the population at last estimate), nearly all health care expenses are covered, at least in part, by employer-provided health care insurance.

• In 1954, Congress passed a law making employer contributions to health plans tax-deductible without making the benefits taxable for employees, which had the unplanned effect of making employer-funded health care the cheapest option for financing health care.
• Employer sponsored health insurance covers 63% of the population under 65.  The remaining population is divided among Medicaid and other public assistance (14%), private non group insurance (5%), and the uninsured (17%).
• For every two doctors in the U.S., there is one health insurance employee.

Facts about free care for the uninsured:

“Free care” is provided by hospitals and other medical providers. These costs are absorbed by the health care system, and result in increased costs in insurance premiums.

• But the total amount is low–in a survey of 500 nonprofit hospitals, nearly 60% reported that free care is equal to or less than 5% of total revenue, and 20% reported providing less than 2%.
• The average uninsured American pays $645 for health care each year, while the average insured American pays $583. However, government and/or insurers spent $1,103 and $3,809 on their behalf, respectively. The cost of health care for the insured American is more than triple that of the uninsured.
• The uninsured patient pays 2.5 times the bill of an insured patient because they lack the ability to negotiate large discounts that are available to insurers.

Facts about Medicare and Medicaid:

Medicare and Medicaid are the largest federal health care programs. Generally, Medicare provides coverage for people 65 and over who are eligible for Social Security. Medicaid is a jointly funded federal-state program that provides coverage for certain low-income individuals, children and families.

• At inception in 1964, the federal share of spending for Medicare and Medicaid was 10% of total health care spending. By 2002, that figure had risen to 32% of total health care spending.
• As of 2005, Medicare and Medicaid accounted for more than 60% of health care expenditures for those 65 and older, with private insurance accounting for 14%.
• For those under 65, Medicare and Medicaid pays for 16% of total health care expenditures with private insurance accounting for 54%.

Next week:  PART II: How the American Health Care System Affects Working Families.

The information contained in this blog was obtained from the following sources:

Goldhill, D. (2009). How American health care killed my father [Online exclusive]. The Atlantic.  Retrieved October 14, 2009, from http://www.theatlantic.com/doc/print/200909/health-care

Goldman, D., & McGlynn, E. (2005).  U.S. health care facts about cost, access, and quality. Retrieved from http://www.rand.org/pubs/corporate_pubs/2005/RAND_CP484.1.pdf

National Coalition on Healthcare. (2009). Health insurance coverage. Retrieved from http://www.nchc.org/facts/coverage.shtml

National Coalition on Healthcare. (2009). Facts about health care:  Health insurance costs. Retrieved from: http://www.nchc.org/facts/cost.shtml

Rowland, D., & Hoffman, C. (2009). Health care and the middle class: More costs and less coverage. Retrieved from http://www.kff.org/healthreform/upload/7951.pdf

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