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Health insurance falters Uneven coverage, rising costs imperil more and more Americans

Second of six editorials

Expert analysts have called the American health insurance system a dysfunctional mess. The truth of that conclusion is easily proved. For example, the quality and availability of insurance depend to a great extent on who you are, where you live and who you work for -- and even those with insurance can be faced with ruinous expenses depending on their policy, their illness and other factors, most of which are beyond their control.

Consider: Census figures show that on a recent three-year average, the uninsured ranged from 9 percent in Minnesota to 25 percent in Texas. Why should that be?

Race matters, too. Black Americans, for example, were 42 percent more likely to be uninsured than whites, the census shows. Poor people also are ill served. Americans with household incomes of less than $25,000 were three times more likely to be uninsured as those with household incomes of $75,000 or more, according to the census.

A child would know better than to devise a system like that -- assuming, of course, that the system's purpose is to prevent illness and treat the sick, and not simply to reward profit-seekers. (Poor children, by the way, are 70 percent more likely to be uninsured than all children.)
Finally, even among those who are employed, the availability and quality of insurance varies wildly. About half of New York's small businesses can't afford to provide health insurance to their employees, according to Kenneth Adams, president and chief executive officer of the Business Council of New York State.

Many of those workers may end up on government health insurance programs such as Family Health Plus. Indeed, some may end up there because their employers point them in that direction, knowing a tax-funded program offers the health coverage they cannot -- or will not -- provide.

Meanwhile, for businesses that do provide health insurance, the price is spiraling out of control, much faster than the rate of inflation. General Motors spends more on health insurance than on steel on a per-car basis. Conversely, Toyota built a plant in Ontario a few years ago partly because health insurance isn't a direct business expense in Canada, which has a national health insurance system.

As their costs soar, businesses are squeezing their workers by restricting coverage or demanding greater out-of-pocket expenses or both. And both camps are complaining to government, demanding a solution to an ever-deteriorating situation that is, in large part, its own problem: the conundrum of employer-based insurance.

Indeed, confidence in the system seems to be crumbling. In a 2006 survey sponsored by the Employee Benefit Research Institute, more than half of respondents rated the American health system as only poor or fair. Worse, poor was the dominant response, with 31 percent rating it that way. Worse still, the percentage of people labeling the system as poor has doubled since 1998. Dissatisfaction centered mostly on cost, the institute reported.

These problems will be intensely difficult to solve. Politicians may generally agree that change is needed, but they don't agree on what or how. Insurers and doctors wield tremendous influence in Washington and they will work, no doubt successfully, to influence the direction and scope of reform. But the problems with insurance won't just go away. Indeed, they are almost certain to keep deteriorating.

Costs will continue to rise faster than inflation, employers will continue to look for relief, workers will have to keep digging deeper. More Americans will find themselves struggling to pay for critical care.

When it comes to health insurance, it is time to find a new model.

TUESDAY: Business balks.

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