Healthcare tabs hit the wealthier

Rising premiums, already a problem for the poor, eat into middle-class wallets.

The healthcare crisis, long a problem for the working poor, is now taking a tangible toll on middle-class Americans.

Spiraling costs are forcing many companies to hike employee premiums so high that some can no longer afford them. And an increasing number of small and medium-sized companies are dropping insurance coverage altogether: Twenty years ago, 85 percent of employers offered health insurance. Now, only 62 percent provide it as a benefit. As a result, more and more middle-class Americans are finding themselves without health insurance, threatening their personal as well as financial well-being.

People like Christi Sloce. She can't afford to be without health insurance. She has a chronic back injury from a rock-climbing accident that her doctors say requires constant medical attention.

But she also can't afford to pay for it. Since her family's contracting company went under two years ago, she and her husband have been living hand to mouth, scrimping to pay for her medical bills and prescription medicines.

"We're coping the very best we can. We're having to borrow money from relatives," says the Bristol, Va., native. "It's not easy."

In the coming year, 465 Americans are expected to lose their health insurance every two hours. That's more than 2 million people, which will bring the total number of uninsured Americans to almost 45 million.

"It's a big problem that's getting bigger. It's becoming threatening to us all," says Dr. Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation.

One of the effects: Health insurance has leapt to the top of the public's concerns. In a tracking poll released last week by the Kaiser Family Foundation, nearly 4 in 10 Americans say they are worried that their healthcare costs will continue to rise and that they may not be able to afford them in the future.

That beat out worries about losing a job, paying the rent, or becoming the victim of a terrorist attack. Almost 1 in 5 say they fear losing their health insurance entirely.

The severity of the problem has prompted usually antagonistic players in healthcare - unions and corporations, health-insurance companies and patient advocates - to join together to force the issue onto Washington's agenda. Next week, the coalition, which is sponsored by the Robert Wood Johnson Foundation, will launch "Cover the Uninsured Week" to draw attention to the problem. They will hold town-hall meetings with state and federal legislators, sponsor health fairs to provide free screening to the uninsured, and present forums where union and management representatives talk about their common interests in solving the problem.

On at least one front, the campaign is already under way. Last weekend, the American Association of Health Plans (AAHP), which represents the nation's managed-care industry, launched an advertising campaign in movie theaters to raise awareness of the crisis' extent. It pointedly notes that by the end of the average-length movie, another 465 Americans will have lost their insurance.

"We've focused for too long on the problem. It's time to take the next step and focus on solutions," says Karen Ignani, president and CEO of AAHP. "We've laid out a set of alternatives that state and federal policymakers can use to address the issue."

But covering the uninsured has proved to be one of the nation's most intractable problems, primarily because someone has to pay for it. Right now, people with health insurance are picking up the tab, although indirectly. The reason is something called cost shifting. It starts with the uninsured, who tend to wait longer before getting care. So when they do go for help, it's usually to the emergency room, and the costs are significantly higher than if they'd gone to the doctor when they first felt a need.

The hospitals then have to absorb those costs as bad debt. To make it up, they increase the costs of services for people who do have insurance.

Here's the Catch-22. It's estimated that every time healthcare costs increase by one percentage point, a minimum of 300,000 people lose insurance. And every time someone loses his or her insurance, it adds to the overall cost of healthcare.

The solutions range from providing tax credits for individuals to buy insurance to expanding programs like Medicaid to include more people. One model could be the S-CHIP program, which expanded Medicaid to allow children to be covered even if their parents are ineligible.

Another proposal would reform Medicaid so that some of those federal funds could be used to subsidize individuals who can't afford health insurance even though their employers offer it. It's estimated that more than 12 million people fall into that category.

But as determined as all the various groups are to deal with the problem, there's little consensus on which is the best solution. Add to that the state and federal deficits, and few experts see any major change soon.

"We've spent the last 10 years trying to chip away at the problem with smaller initiatives we thought were politically palatable," says Ken Thorpe, a health-policy expert at Emory University in Atlanta. "But now there's a growing recognition among both Democrats and Republicans that we have to put the issue of comprehensive reforms back on the table."

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