In Economic Uncertainty, Every Day Is New Year’s Eve!

by Tim Foley

categories: For Profit Insurance, The Uninsured and Underinsured

Published April 20, 2009 @ 09:37PM PT

In one of the first posts for this blog, I wrote about how many people participate in end-of-the-year rush to obtain health care services before their deductibles reset or their premiums rise.  At the time, I noted, “Unless we get serious about fixing our broken health care system, it’ll be ‘Auld Lang Syne’ all year long.”  Well, bust out your crazy “2009” sunglasses and your bottles of cheap champagne.  A study by the International Foundation of Employee Benefit Plans shows more and more employees are rushing to use their health benefits while they still have them.

The economic recession has created an atmosphere of fear.  As mentioned, the ranks of the uninsured has grown over the past 10 years in spite of increases in public coverage for SCHIP, Medicaid and Medicare, which clearly demonstrates that many companies have simply dropped coverage.  Even though most companies who offer benefits plan to continue doing so, that doesn’t mean they’ll continue being generous given how health care premium increases are significantly outpacing inflation.  As the study found, “Thirty-five percent of plan sponsors are increasing employee deductibles, coinsurance or copays due to the financial crisis.  Nearly the same proportion are also increasing employee premiums.”  And of course, there’s the ominous threat of losing insurance and, with it, benefits.  The oft-quoted statistic from Kaiser Family Foundation is that for every 1% increase in the unemployment rate, 1.1 million people lose their health care coverage.

Is it any wonder that employees are using their coverage while they can?  In addition to adding dependants, “about one-third of plan sponsors have noticed an increase in the number of participants filling prescriptions and engaging in costly medical procedures before their insurance runs out.”

If there can be said to be a silver lining to this sad state of affairs, it’s that this report is yet another nail in the coffin of the false premise that you can fix the economy without fixing health care.  Clearly the two are inextricably linked in the minds of many Americans, making the public pressure to achieve real reform this year that’s reliable and gives every American comprehensive coverage that cannot be taken away an economic imperative.

(Photo credit:  kramchang on Flickr.)