News

Differing Views on the Employment Effect of Healthcare Reform

February 15

This month, TMP Worldwide continues to explore the drivers behind healthcare reform and possible implications on employment. Below are three emerging viewpoints: how premiums affect middle-class incomes, how health insurance affects employment opportunities for the disabled and how healthcare reform will affect your paycheck.

Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes
Cathy Schoen, Jennifer L. Nicholson, and Sheila D. Rustgi
The Commonwealth Fund
August, 2009

"This analysis of federal data finds that if premiums for employer-sponsored insurance grow in each state at the projected national rate of increase, then the average premium for family coverage would rise from $12,298 (the 2008 average) to $23,842 by 2020—a 94 percent increase. However, if health system reforms were able to slow premium growth by 1 percentage point in all states, by 2020 employers and families together would save $2,571 per premium for family coverage, compared with projected trends. If growth could be slowed by 1.5 percentage points—a target recently agreed to by a major industry coalition—yearly savings would equal $3,759."

"Between 1999 and 2008, employer-sponsored family health insurance premiums rose by 119 percent nationally, while median family income rose by 29 percent. Such a rapid increase in the cost of employer-sponsored health benefits has forced difficult choices at workplaces across the country. Studies indicate that slower growth in wages and lower savings for retirement (worker and employer contributions) have been part of the trade-off to preserve health benefits."

"At the state level, premiums have risen rapidly, and far faster than average incomes. In the five years from 2003 to 2008, total premiums for family coverage under employer-sponsored plans rose a cumulative average of 33 percent. The five-year increase in family premiums ranged from about 25 percent in the three lowest-growth states (Michigan, Texas, and Ohio) to 45 percent in the two highest-growth states (Indiana and North Carolina). Twelve states saw increases of 40 percent or more and 36 states saw increases of 30 percent or more—well above the rate of income growth."

For the full article, see:
http://www.commonwealthfund.org./~/media/Files/Publications/Data%20Brief/2009/Aug/1313_Schoen_paying_the_price_db_v3_resorted_tables.pdf

The Disability, Health Care and Employment Connection
Ari Ne'eman, Founding President of the Autistic Self-Advocacy Network
The Huffington Post
August 24, 2009

"For the majority of people with disabilities who cannot find entry-level work that provides health insurance, government programs are the only option. Yet, Medicaid's asset and income limits prevent many workers with disabilities from qualifying. Taking a job that pays enough to live on means losing access to health care coverage. Even as we have attempted to open the door to employment and community integration for people with disabilities through laws like the Americans with Disabilities Act and the Individuals with Disabilities Education Act (IDEA), insurance discrimination and lack of affordable health care serves to keep that door closed for too many."

"Work is a crucial part of our lives. It helps define our identities, our social circles, our role in society, what we do with most of our time and our sense of self-respect. Indeed, one of the areas of common ground that disability rights advocates and conservatives share is a respect for the fundamental dignity of work. Yet, despite this, critics of health care reform give no consideration to this issue. They forget about the large percentage of the disabled population in this country that remains caught in a bureaucratic nightmare preventing even those capable of finding and holding employment from doing so for fear of being left without health insurance."

"Think of the potential benefits - measured in both quality of life and new taxpayers - from millions of current SSDI/SSI recipients finding employment. Senator Tom Harkin, the chief co-sponsor of the Americans with Disabilities Act and a man often referred to in disability rights circles as the "great emancipator" for people with disabilities, often points out that people with disabilities are one of the few groups that want to pay taxes, as doing so will indicate that the barriers to the world of work have been broken down."

For the full article, see: http://www.huffingtonpost.com/ari-neeman/the-disability-health-car_b_265365.html

How Would Health Reform Affect Your Take-Home?
Kerry Isberg
HRMorning.com
July 17, 2009

"Congress is looking for ways to raise more than $1 trillion in new tax revenues to finance health care for the uninsured. At the top of the list: several proposals that would cut employees' take-home pay 9% to 14%, depending on their household income and tax situation. Several of the plans under consideration would require Payroll to treat as taxable income: health insurance premiums, dental premiums, vision premiums, flexible spending account deposits and health reimbursement arrangement contributions."

"Specifically, the proposals the Employer Council on Flexible Compensation reports are under consideration include: capping this proposed group health tax exclusion at $6,800 for individuals and $17,240 for group coverage in 2013, imposing the cap on all workers with group coverage, or imposing the cap only on those earning more than $100,000 per year (married couples, more than $200,000) per year."

For the full article, see: http://www.hrmorning.com/how-would-health-reform-affect-your-take-home/

Facts and Figures Driving the Reform Movement (http://www.healthreform.gov/) - This month, Indiana, Massachusetts and New York:

Indiana:

  • Ending the Hidden Tax — Saving You Money: Right now, providers in Indiana lose over $1 billion in bad debt which often gets passed along to families in the form of a hidden premium "tax".1 Health insurance reform will tackle this financial burden by improving our health care system and covering the uninsured, allowing the 114 hospitals2 and the 16,273 physicians3 in Indiana to better care for their patients.
  • Health Insurance Premium Relief: Premiums for residents of Indiana have risen 100% since 2000.4 Through health insurance reform, 654,800 to 775,600 middle class Indiana residents will be eligible for premium credits to ease the burden of these high costs.5
  • Strengthening Small Businesses: 83,234 employers in Indiana are small businesses.6 With tax credits and a health insurance exchange where they can shop for health plans, insurance coverage will become more affordable for them.
  • Reforms that Reduce Your Costs: Under health insurance reform, insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive. Insurance companies will also have to abide by yearly limits on how much they can charge for out-of-pocket expenses, helping 12,900 households in Indiana struggling under the burden of high health care expenses.7
  • Insurance Stability and Security: Health insurance reform will strengthen our system of employer-based health insurance, with an additional 69,900 people in Indiana potentially getting insurance through their work.8 Health insurance reform will also ensure that you will always have guaranteed choices of quality, affordable health insurance if you lose your job, switch jobs, move or get sick.
  • Eliminating Discrimination for Pre-Existing Conditions, Health Status or Gender: 10% of people in Indiana have diabetes9, and 28% have high blood pressure10 — two conditions that insurance companies could use as a reason to deny you health insurance. Health insurance reform will prevent insurance companies from denying coverage based on your health, and it will end discrimination that charges you more if you're sick or a woman.
  • One-Stop Shopping — Putting Families in Charge: With the new health insurance exchange, you can easily and simply compare insurance prices and health plans and decide which quality affordable option is right for you and your family. These proposals will help the 732,300 residents of Indiana who currently do not have health insurance to obtain needed coverage, and it will also help the 241,200 Indiana residents who currently purchase insurance in the individual insurance market.11
  • Guaranteeing Choices: The largest health insurer in Indiana holds 58% of the market, which limits the choices that you have for finding coverage.12 With a competitive public insurance option, you will have more choices and increased competition that holds insurance companies accountable.
  • Preventive Care for Better Health: 41% of Indiana residents have not had a colorectal cancer screening, and 24% of women have not had a mammogram in the past 2 years.13 By requiring health plans to cover preventive services for everyone, investing in prevention and wellness, and promoting primary care, health insurance reform will work to create a system that prevents illness and disease instead of just treating it when it's too late and costs more.
  • Improving Care for Children and Seniors: 21% of children in Indiana have not visited a dentist in the past year,14 and 28% of seniors did not receive a flu vaccine15. Health reform will ensure coverage for kids' dental, vision, and hearing needs, and will promote quality coverage for America's seniors, including recommended immunizations.

Massachusetts:

  • Health Insurance Premium Relief: Premiums for residents of Massachusetts have risen 94% since 2000.4 As health care costs continue to rise, wages will stagnate, meaning American families will work harder and have less to show for it. By lowering health care costs, more of our nation's dollars can go toward investments in our economy and higher wages for working families.
  • Strengthening Small Businesses: 107,842 employers in Massachusetts are small businesses.6 With tax credits and a health insurance exchange where they can shop for health plans, insurance coverage will become more affordable for them.
  • Reforms that Reduce Your Costs: Under health insurance reform, insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive. Insurance companies will also have to abide by yearly limits on how much they can charge for out-of-pocket expenses, helping 24,600 households in Massachusetts struggling under the burden of high health care expenses.7
  • Insurance Stability and Security: Health insurance reform will further strengthen our system of employer-based health insurance, with additional people in Massachusetts potentially getting insurance through their work.8 Health insurance reform will also ensure that you will always have guaranteed choices of quality, affordable health insurance if you lose your job, switch jobs, move or get sick — extending to other states a protection currently offered to residents of Massachusetts.
  • Eliminating Discrimination by Insurance Companies: 7% of people in Massachusetts have diabetes9, and 26% have high blood pressure10 — two conditions that insurance companies could use as a reason to discriminate against you. Health insurance reform will build on existing state policies to end discrimination that unfairly charges some people more than others.
  • Guaranteeing Choices: The largest health insurer in Massachusetts holds 56% of the market, which limits the choices that you have for finding coverage.12 With a competitive public insurance option, you will have more choices and increased competition that holds insurance companies accountable.
  • Preventive Care for Better Health: 29% of Massachusetts residents have not had a colorectal cancer screening, and 13% of women have not had a mammogram in the past 2 years.13 By requiring health plans to cover preventive services for everyone, investing in prevention and wellness, and promoting primary care, health insurance reform will work to create a system that prevents illness and disease instead of just treating it when it's too late and costs more.
  • Improving Care for Children and Seniors: 16% of children in Massachusetts have not visited a dentist in the past year,14 and 22% of seniors did not receive a flu vaccine15. Health reform will ensure coverage for kids' dental, vision, and hearing needs, and will promote quality coverage for America's seniors, including recommended immunizations.

New York:

  • Ending the Hidden Tax — Saving You Money: Right now, providers in New York lose over $9.3 billion in bad debt which often gets passed along to families in the form of a hidden premium "tax".1 Health insurance reform will tackle this financial burden by improving our health care system and covering the uninsured, allowing the 202 hospitals2 and the 88,179 physicians3 in New York to better care for their patients.
  • Health Insurance Premium Relief: Premiums for residents of New York have risen 97% since 2000.4 Through health insurance reform, 2,051,100 to 2,410,800 middle class New York residents will be eligible for premium credits to ease the burden of these high costs.5
  • Strengthening Small Businesses: 331,598 employers in New York are small businesses.6 With tax credits and a health insurance exchange where they can shop for health plans, insurance coverage will become more affordable for them.
  • Reforms that Reduce Your Costs: Under health insurance reform, insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive. Insurance companies will also have to abide by yearly limits on how much they can charge for out-of-pocket expenses, helping 143,700 households in New York struggling under the burden of high health care expenses.7
  • Insurance Stability and Security: Health insurance reform will strengthen our system of employer-based health insurance, with an additional 188,900 people in New York potentially getting insurance through their work.8 Health insurance reform will also ensure that you will always have guaranteed choices of quality, affordable health insurance if you lose your job, switch jobs, move or get sick.
  • Eliminating Discrimination by Insurance Companies: 8% of people in New York have diabetes9, and 27% have high blood pressure10 — two conditions that insurance companies could use as a reason to discriminate against you. Health insurance reform will build on existing state policies to end discrimination that unfairly charges some people more than others.
  • One-Stop Shopping — Putting Families in Charge: With the new health insurance exchange, you can easily and simply compare insurance prices and health plans and decide which quality affordable option is right for you and your family. These proposals will help the 2,590,400 residents of New York who currently do not have health insurance to obtain needed coverage, and it will also help the 672,500 New York residents who currently purchase insurance in the individual insurance market.11
  • Guaranteeing Choices: The largest health insurer in New York holds 26% of the market, which limits the choices that you have for finding coverage.12 With a competitive public insurance option, you will have more choices and increased competition that holds insurance companies accountable.
  • Preventive Care for Better Health: 34% of New York residents have not had a colorectal cancer screening, and 18% of women have not had a mammogram in the past 2 years.13 By requiring health plans to cover preventive services for everyone, investing in prevention and wellness, and promoting primary care, health insurance reform will work to create a system that prevents illness and disease instead of just treating it when it's too late and costs more.
  • Improving Care for Children and Seniors: 19% of children in New York have not visited a dentist in the past year,14 and 30% of seniors did not receive a flu vaccine.15 Health reform will ensure coverage for kids' dental, vision, and hearing needs, and will promote quality coverage for America's seniors, including recommended immunizations.
  • 1 Hospital uncompensated care cost is estimated using a GAO model and the Hospital Cost Reports. Total uncompensated care is computed as hospital uncompensated care divided by 63% (Hadley and Holahan's study on "The Cost of Care for the Uninsured" for Kaiser in 2004 found that hospitals account for 63% of total uncompensated care). Data expressed in 2009 dollars using Centers for Medicare and Medicaid Services, "National Health Expenditure Data."
  • 2 2007 AHA Annual Survey Copyright 2009 by Health Forum LLC, an affiliate of the American Hospital Association, special data request, March 2009. Available at http://www.ahaonlinestore.com.
  • 3 American Medical Association, Physicians Professional Data, year of data 2008, copyright 2008: Special Data Request.
  • 4 Center for Financing, Access and Cost Trends, AHRQ, Medical Expenditure Panel Survey - Insurance Component, 2000, Table II.D.1. Center for Financing, Access and Cost Trends, AHRQ, Medical Expenditure Panel Survey - Insurance Component, 2006, Table X.D. Projected 2009 premiums based on Centers for Medicare and Medicaid Services, "National Health Expenditure Data."
  • 5 U.S. Census Bureau, Current Population Survey. Annual Social and Economic Supplements, March 2007 and 2008.
  • 6 Center for Financing, Access and Cost Trends, AHRQ, Medical Expenditure Panel Survey - Insurance Component, 2006, Table II.A.1a.
  • 7 Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 2006.
  • 8 U.S. Census Bureau, Current Population Survey. HIA-4 Health Insurance Coverage Status and Type of Coverage by State—All Persons: 1999 to 2007, 2007. Calculations based on Congressional Budget Office. Letter to the Hon. Charles Rangel on America's Affordable Health Choices Act, July 14, 2009.
  • 9 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2008.
  • 10 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2007.
  • 11 U.S. Census Bureau, Current Population Survey. Annual Social and Economic Supplements, March 2007 and 2008.
  • 12 American Medical Association. (2008, 2009). "Competition in health insurance: A comprehensive study of U.S. Markets: 2008 Update," American Medical Association.
  • 13 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2007.
  • 14 Child and Adolescent Health Measurement Initiative. 2007 National Survey of Children's Health, Data Resource Center for Child and Adolescent Health.
  • 15 Behavioral Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, 2007.
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