Democracy Under Assault
Theopolitics, Incivility and Violence on the Right

Michele Swenson

Unsurance: Growing numbers of underinsured in the U.S.


A symptom of expanding U.S. corporatized medicine is the growing rate of underinsured, a number growing faster than the numbers of
uninsured, which continue to rise.

A 2007 survey of more than 3,100 employers by the Kaiser Family Foundation revealed that 59 percent of small businesses provide some kind of insurance, down from 68 percent just six years ago. And, no longer are employers attempting to provide employees with comprehensive insurance.

Contributing to the burgeoning market of underinsurance or unsurance (economics professor Uwe Reinhardt's term), employers increasingly seek relief from the growth rate of insurance premiums that have exceeded the rate of inflation for many years. Many are turning to the expanding market of underinsurance products that are designed to cut benefits and shift more costs onto their workers. And underinsurance that now dominates the small group market is creeping into the large employer sector.

HIGH-DEDUCTIBLE PLANS are euphermistically called consumer-driven plans, -- not because consumers are driving the demand, but because they must pay such a high share of the cost that managers hope they will use fewer services, writes Fran Hawthorne of The New York Times ("To Keep Health Plans, Many Firms Shift Costs," 9/26/07).

BARE-BONES COVERAGE -- paying less by covering less. The catastrophic care option offered by Group Health Inc. of New York covers hospitalization only and no routine care, cutting premiums by about two-thirds. Alternatively, a company might pay for a limited number of routine checkups but not hospitalization. Among other variations, plans may impose annual caps, e.g., $50,000.

VIRTUAL INSURANCE -- Under this scenario, companies pay nothing, leaving employees with the whole premium. Employers would offer employees the opportunity to purchase their own insurance under so-called "Section 125" plans for a pre-tax payroll deduction.

PREVENTIVE-CARE PLANS Principal Financial has started pitching to this market with a plan that gives each employee 30 minutes of face-to-face counseling a year, for about $100 a person.

GOVERNMENT HELP Tennessee has started a bare-bones plan called CoverTN, with a coverage cap of just $25,000 and the state paying one-third of the premium.

Such plans are consistent with the move to privatized health insurance in the U.S. Privatized health coverage has been promoted by groups like the Heritage Foundation, advanced by such measures as 2003 Medicare prescription drug reform, which moved seniors into more costly private insurance plans, for which taxpayers pay 12 percent higher overhead costs than for traditional Medicare. The rub is that private plans that are affordable do not provide adequate health care or prevent financial hardship for individuals who actually need health care.