Increasing Unemployment Contributing To Rising Ranks Of Uninsured

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The rising rate of unemployment has contributed to an increase in the number of uninsured people because workers who lose their jobs often lose their health benefits, the New York Times reports. According to the Bureau of Labor Statistics, about 10.3 million U.S. residents were unemployed in November, an increase of 36%, or 2.8 million people, since January of this year, and 71%, or 4.3 million people, since January 2001. Public health experts estimate that for every one worker who loses health coverage, at least one child or spouse with coverage under the same policy also loses insurance.

The increasing number of uninsured because of job losses "adds urgency" to efforts by lawmakers who are pushing for universal health care, according to the Times. Sen. Sherrod Brown (D-Ohio) said, "This shows why -- no matter how bad the condition of the economy -- we can't delay pursuing comprehensive health care," adding, "There are too many victims who are innocent of anything but working at the wrong place at the wrong time."

Harvey Brenner, a professor of public health at the University of North Texas and Johns Hopkins University, said that historically during recessions, with declines in national income and increases in unemployment, "you often see increases in mortality from heart disease, cancer, psychiatric illnesses and other conditions." In addition, hospitals also are facing pressure, as economic downturns historically mean a decline in revenue and an increase in the number of uninsured people seeking care, especially in emergency departments. Erin Al-Mehairi, a spokesperson for Samaritan Hospital in Ashland, Ohio, said, "We have seen a significant increase in patients seeking assistance paying their bills," adding, "We've had a 40% increase in charity care write-offs this year over the 2007 level of $2.7 million."

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The Times profiled Archway & Mother's Cookie, which closed its factory in north central Ohio this fall, leaving about 275 people without a job and their "excellent health benefits" (Pear, New York Times, 12/7). The Wall Street Journal also profiled the closing of the company and employees' resulting loss of health coverage. According to the Journal, "In some cases, people who are laid off can maintain their group health benefits under" COBRA, but "that is not an option for former Archway employees because their group health plan no longer exists" and the employees "generally cannot afford to buy insurance on their own" (Dugan, Wall Street Journal, 12/6).

Small Businesses Cutting Benefits

Many small businesses are cutting employee benefits and reducing or eliminating their contributions to health care insurance and retirement plans in an attempt to remain in business or avoid layoffs, the AP/Bergen Record reports. Some companies also are shifting health care costs by switching employees to high deductible health plans.

According to the AP/Record, "Human resources consultants say owners should aim at making these cutbacks temporary -- and to let employees know that their benefits will be restored as soon as possible." Jay Keegan, CEO of Adams Keegan, said employers who might consider eliminating health benefits altogether should reconsider because such a move could hurt employees' morale. Rob Wilson, president of Employco, suggests easing some of the pain by offering employees other benefits, such as flex time or flexible spending accounts to help offset higher out-of-pocket health costs (Rosenberg, AP/Bergen Record, 12/7).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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