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Hard choices Americans make when losing health insurance

Ernie Shannon's picture

A U. S. government actuary office is reporting Americans spent just a little more on health care in 2010 than they did in 2009 breaking a trend of significant growth from year to year.

The Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) published its annual estimate of U. S. health spending in the journal Health Affairs. The office’s findings show American health care expenditures increased just 3.9 percent in 2010 compared to the year before and in 2009 the increase amounted to no more than 3.8 percent from 2008, a definite slow down that seems to mirror the recession.

Still, the actual dollar figures associated with health care spending boggles the mind. The office reported that total U. S. health spending reached a staggering $2.6 trillion or $8,402 per person in 2010. And while that figure represented an increase over 2009, the growth comes out to be only 0.1 percentage point faster than 2009.

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Concerning the national climate, the report directly ties the decline in the growth of spending to the nation’s economy: “The recession that lasted from December 2007 through June 2009 had a powerful impact on most sectors of the economy and health care was no exception. Overall economic output slowed substantially in 2008 and declined in 2009 and health spending growth closed to historically low rates from 2008 through 2010.”

Loss of Health Insurance Coverage

The report also suggests that Americans are making some hard decisions as a result of the economic downturn. It said that rather than visiting a physician for treatment, people began seeking other remedies particularly in looking for alternatives to expensive prescription drugs. Some of these decisions were made as a result of losing private health insurance coverage and in other cases reduced household income and future financial uncertainty drove many away from the doctor’s office.

In the past, researchers of U. S. health care spending found that when recessions occurred, a corresponding decline in spending for medical services lagged behind. They explained the lag to the health sector’s reliance on health insurance contracts that were negotiated a year or more in advance and a consumer’s ability to maintain health insurance coverage after losing a job by means of a spouse’s policy or some other program. This time, however, the same research discovered a quicker response to the recession on the part of Amercian spending on health care. The report points to the highest unemployment rate in 27 years, a substantial loss of private health insurance coverage, and employers’ caution about hiring and investing during the economic plight of many companies.