As healthcare costs in the United States sky-rocket, traditional employer-based health coverage is eroding. Employers are responding to rising costs by cutting health benefits and increasing employee cost-sharing. The share of firms offering health coverage to their employees has fallen from 69 percent in 2000 to 60 percent in 2007. Most workers with employer-sponsored health coverage are burdened by additional healthcare costs such as annual deductibles and copays. Over 95 percent of covered employees face cost-sharing for non-preventative care such as hospital stays and outpatient surgery.

Half of all uninsured workers are no longer offered coverage by their employers at all. Another quarter of uninsured employees are without health insurance because they do not meet strict eligibility requirements for employer-sponsored coverage. The final 25 percent of employees have opted out of their employer-sponsored health coverage, primarily due to the unaffordable costs of premiums and cost-sharing.

In Massachusetts, employees have faced rapidly rising health care costs in the past five years, as employee contributions to health care plans increase.

^{Data obtained from the Massachusetts Employer Health Insurance Survey, by the Massachusetts DHCFP. http://www.mass.gov/Eeohhs2/docs/dhcfp/r/survey/er_2005_comp_results.pdf}

These trends are expected to continue in the coming years as costs continue to rise. A recent study reported that, of employers who currently provide health coverage to their employees, between 37 percent and 45 percent thought they were “very or somewhat likely” to increase the amount workers contribute to premiums, to increase deductibles, increase office-visit cost-sharing, or increase the amount employees have to pay for prescription drugs in the coming year.

The current health care system in the United States leaves much of the population uninsured or underinsured. Employer-provided health coverage is often expensive and incomplete, particularly as increasing healthcare costs consume larger portions of business’ budgets. A universal single-payer health care plan would remove the burden of costly health care coverage from both employers and employees, and would offer all residents steady, dependable and comprehensive coverage.

Further Resources:

• “Worker’s Health Insurance: Trends, Issues, and Options to Expand Coverage,” Paul Fronstin, Ph.D, The Commonwealth Fund, March 2006.
• “Employer Health Benefits 2007 Annual Survey,” Kaiser Family Foundation.
• “Changers in Employees’ Health Insurance Coverage, 2001-2005,” Kaiser Family Foundation, October 2006.
• “Are You Really Covered?” Consumer Reports, May 2007.

Chronic disease is on the rise in the United States and it currently accounts for 75% of health care expenses each year. The United States compares poorly with other industrialized nations in chronic disease management, especially when it comes to asthma and diabetes. In 2000, the United States had the 3rd highest diabetes death rate among OECD countries. Among developed nations, the United States has the second-highest hospital admission rates due to asthma, which is a marker of poor asthma management. In addition, 11% of diabetes patients in the United States were uninsured in 2000, and as a result received fewer preventative services.

People with chronic disease have more health care needs than the average patient and therefore are financially punished for their illnesses in private employer-based health insurance plans. Over 90% of insured diabetics spend more than $1,050 annually on their care, and more than 50% spend at least $5,000. Single-payer health insurance systems remove extra financial burden from chronically ill patients by eliminating co-pays and deductibles. This system will help encourage preventative care, which is crucial in managing chronic disease and saves money for everyone in the long run. See below for more information about chronic disease in the United States.

Further Resources:

• “Chronic Disease Overview,” Centers for Disease Control and Prevention, March 20, 2008.
• Financial Burden of Diabetes, “Consumer-Directed Healthcare: Except for the Healthy and Wealthy It’s Unwise,” Steffie Woolhandler and David U. Himmelstein, Journal of General Internal Medicine, June 2007.
• International Comparison of Death Rates Due to Diabetes, OECD Health Data, 2006.
• “The Association between Health Insurance Coverage and Diabetes Care,” Karin M. Nelson et al, Health Services Research, April 2005.
• International Comparison of Asthma Admission Rates, “Health at a Glance 2007,” OECD Health Data.

The financial stability of municipalities in Massachusetts and nationwide is being threatened by rapidly rising health care costs. Cities and towns are being thrown into crisis as they struggle to provide benefits for hard-working city employees such as firefighters, policemen, and teachers. In Massachusetts from 2001 to 2005, employee health care costs as a share of total municipal budgets increased from 7.4% to 11%. Overall, municipal health care costs rose by a total of 99% from 2001 to 2007. At the same time, local budgets increased by only 28%. In Boston, employee health care costs increased by 92% from 2001 to 2007 while all other operational spending increased by only 18%. This drain on budget resources is preventing cities and towns from maintaining other important services.

The dilemma of municipalities in Massachusetts is exacerbated by Proposition 2½, which limits the annual increase in property taxes to 2.5 percent, regardless of how fast municipal costs are rising. In 2007, health cost increases consumed approximately three-fourths of the revenue from the 2.5 percent property tax increase outlined in Proposition 2½. Municipal tax data from 2003 to 2006 saw a marked increase in the percentage of total tax revenue used for health care costs.

One strategy to combat rising costs was used by Springfield, MA when in 2003 they began allowing city employees to buy cheap prescription drugs from Canada. If health care costs continue to increase by 11-13% annually, they are predicted to consume 19-23% of municipal budgets by 2018. Single-payer health care would free municipalities from the burden of insuring their workers, while at the same time creating a healthier workforce. Single-payer is already being recognized as a solution by mayors nationwide. At their 2008 Annual Meeting, the U.S. Conference of Mayors endorsed HR 676, the national single-payer bill.

FURTHER RESOURCES:

• “A Mounting Crisis for Local Budgets: The Crippling Effects of Soaring Municipal Health Costs,” Massachusetts Taxpayers Foundation, July 19, 2005.
• “MA Health Care Costs Continue to Stress Local Finances,” Massachusetts Municipal Association, October 1, 2007.
• “Municipal Health Reform: Seizing the Moment,” Boston Municipal Research Bureau, August 2007.
• “Springfield Institutes a Drug Reimportation Program,” Drug Cost Management Report, August 8, 2003.
• “Proposition 2½ Resource Area,” Massachusetts Municipal Association.

The burden of health care costs on businesses is substantial and rising rapidly. Between January and May 2004 alone, the costs of providing health care for workers increased by 11%. Between 2000 and 2005, premiums for employer-based insurance rose at least 9% each year, a rate of increase 2 to 3 times faster than inflation and workers’ wages. Companies are suffering because of these cost burdens. General Motors, which has historically offered one of the most generous benefits package of any corporation, spent approximately $5.6 billion on employee health benefits in 2005, at a time when they suffered their worst quarterly loss in a decade. Health care costs add about $1500 to the price of each car GM sells.

The significant rise in health insurance premiums within the past five years has led to dramatic increases in the amount Massachusetts employers must spend on employee health care costs annually.

_{Data obtained from theMassachusetts Employer Health Insurance Survey by Massachusetts DHCFP http://www.mass.gov/Eeohhs2/docs/dhcfp/r/survey/er_2005_comp_results.pdf}

Employer-sponsored coverage has traditionally been the main source for health insurance in the US, but this relationship is weakening. In 2005, 77% of employees received benefits from their employer, down from 81% in 2001. Most of the employees that lost coverage during that time remained uninsured. Uninsured individuals are at risk for poorer health and premature death. Universal single-payer coverage offers several advantages to businesses. It will reduce costs for businesses that are currently providing insurance and also eliminate retiree benefit costs. Businesses will no longer have to negotiate with insurance companies or labor unions about health coverage. National coverage will free up more money for consumer spending and also create a healthier, more productive work force. Health care costs will be controlled and predictable, and businesses would no longer lose employees to those companies offering better benefits.

FURTHER RESOURCES:

• “Single-Payer: Good for Business,” Morton Mintz, The Nation, October 28, 2004.
• “Changes in Employees’ Health Insurance Coverage, 2000-2005,” Kaiser Family Foundation, October 2006.
• “Ailing GM looks to scale back generous health benefits,” Julie Appleby and Sharon Silke Carty, USA Today, June 23, 2005.
• “Workers’ Health Insurance: Trends, Issues, and Options to Expand Coverage,” Paul Fronstin, Commonwealth Fund, March 28, 2006.

Young adults, ages 19 to 29, are more likely to be uninsured than any other age group, and are the fastest growing uninsured population in the country. In 2004 young adults represented 17 percent of the non-elderly population, but 30 percent of the uninsured. They also accounted for 40 percent of the growth in uninsured people between 2000 and 2004. Young adults often fall off of their parents’ health plans with no alternative source of coverage, disproportionately work at low-income jobs classified as part-time or temporary that offer no health benefits, and have seen falling real incomes in recent decades making this age group less able to afford commercial insurance. While often discounted as a relatively healthy population, young adults have special health care needs. For example, one third of all HIV diagnoses are made among young adults, injury-related visits to emergency departments are far more common among this group, they have seen the fastest growing rates of obesity, and 3.5 million out of 21 million women ages 19 to 29 each year become pregnant.

A health care system based on workplace coverage and ability to pay discriminates heavily against young adults, who are increasingly disadvantaged in the labor market and have seen falling real incomes in the United States. A universal single payer health care system would make comprehensive access to health care available, regardless of age, job status, or income.

Further Resources:

• “Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help,” The Commonwealth Fund, May 24, 2006.
• “On their Own: Young Adults Living Without Health Insurance,” The Commonwealth Fund, May 1, 2000.
• “The Changing Definition of ‘Dependent’: Who is Insured and For How Long?” National Conference of State Legislatures, February 2008.
• “Young and Uninsured,” Wiretap Magazine, November 23, 2005.
• “Young adult plans limit coverage: State’s low-cost insurance can be risky, report says,” Boston Globe, May 29, 2007.
• “Young adults aren’t sold on health law: Options weighed as plan takes effect,” Boston Globe, July 1, 2007.

• Solutions for Progress/Boston University Report on single-payer reform: one of two studies commissioned by the Massachusetts Medical Society.
• Lewin Group’s Report on single-payer reform: the second study commissioned by the Massachusetts Medical Society.
• LECG’s Report on consolidated and streamlined financing of health care in Massachusetts, commissioned by the Commonwealth of Massachusetts.

The patchwork system of health insurance in the United States causes many individuals to fall through the cracks. Currently, 15% of Americans are uninsured, and many more struggle to afford their care. This amounts to a health care crisis of epidemic proportions. The brunt of this epidemic is borne by women, people of color, immigrants, and the young. These groups, already vulnerable because of their marginalized status in society, are further abused by our health care system. Universal single-payer health care is essential to ensuring equal access for all members of society. A single-payer system would provide health care to all residents, regardless of income level, employment status, citizenship status, age, race, ethnicity, or gender. See the links below to learn more about health care disparities.

• Young Adult Access to Health Care
• Seniors’ Access to Care
  
• Gender Disparities in Access to Health Care
• Racial and Ethnic Disparities in Access to Health Care
• Immigrant Access to Health Care

Click here to download this Fact Sheet as a Word Document.
Click here to see the full text of the Massachusetts Health Care Trust legislation.

Massachusetts Health Care Trust Legislation
Revised and Filed on January 10, 2007
——————————————————-

WHAT THIS BILL DOES:This legislation guarantees every Massachusetts resident first class health care coverage by replacing the current patchwork of public and private health care plans with a uniform and comprehensive health plan. It creates a single public entity called the Health Care Trust to replace all the present public and private bureaucracies.

WHY A SINGLE-PAYER LAW IS NEEDED:No country or community in the world has been able to even approach universal, quality health care coverage without a single-payer system. This is because having many private insurers is actually much more expensive, and creates more waste, than covering all residents under the same program. Private insurers have much higher overhead costs – so a large chunk of our premium dollars is wasted on advertising, high executive salaries, and unnecessary bureaucracy. Furthermore it costs hospitals, health centers, and physicians billions of dollars to deal with dozens of insurers, each with a different system and each imposing different requirements on health care providers.

Having a single system that all residents benefit from dramatically reduces discrimination and inequalities in access to and quality of care. Disparities in the health care system have actually been growing rather than diminishing in the United States. Depending on your age, ethnicity, gender, geographic location, sexual orientation, and many other factors, you will face different barriers to receiving the care you need. A system based on private insurance is designed to offer different levels of coverage and access to different groups of people – and insurance companies actually have an incentive to avoid social groups with statistically higher rates of health problems. So long as we have different tiers of coverage for different people, discrimination will plague our health care system.

Single-payer systems allow patients to choose from any doctor, hospital, or other provider; allow continuity of care; and promote preventive care. Almost all plans under private insurers in the United States today place severe limitations on where patients may receive care. What’s more, when residents change jobs or health care plans, they will often be forced to change provider as well – undermining “continuity of care,” which medical professionals consider crucial. Most importantly, single payer systems allow all residents access to primary care, which helps to catch dangerous conditions at an early stage and actually saves money in the long run.HOW DOES THE HEALTH CARE TRUST RELATE TO THE RECENTLY ENACTED MASSACHUSETTS HEALTH CARE LAW?

The recently passed law attempts to address only one element of the health care crisis: the uninsured. However, over three-fourths of Americans who have trouble paying their medical bills have health insurance. Medical costs account for over half of personal bankruptcies in the country – and most of these households had health insurance at the time they ran into health problems. Sky-rocketing costs are destroying municipal and state budgets, while both employers and workers are being asked to pay more than they can afford just to keep their coverage. Seniors pay an extraordinary percentage of their income on medical costs not covered by Medicare. Rising costs are causing not just a growing number of uninsured, but are creating crises for families, governments, and employers across the state that do pay for some form of insurance.

Similar bills attempting to cover the uninsured have had little success in shrinking the uninsured population, because rising health care costs make this so expensive. Without the sort of cost controls that a single payer system brings, it will be extremely difficult to slow the crisis of the uninsured, the underinsured, and the employers and residents breaking the bank to pay for quality insurance.

SUPPORT FOR THE BILL:Massachusetts voters have consistently supported a universal single payer health care system. A 1986 referendum directing the State Legislature to call on the US Congress to enact a national health care program was approved by more than 66% of the voters statewide. A subsequent universal single payer referendum in 1994 was approved by over half of the voters in eight voting districts. In 1998, the voters in three legislative districts overwhelmingly approved a referendum question calling for a single payer health care system. Another local referendum was overwhelmingly approved in 1999, and three in 2000. Two studies commissioned by the Massachusetts Medical Society and another commissioned by the Commonwealth of Massachusetts in recent years have strongly recommended a system such as proposed by the Health Care Trust as the best option for Massachusetts, and a viable solution to our health care crisis.

Over ninety organizations in the state have formally endorsed the Massachusetts Health Care Trust bill. They include the the Huntington’s Disease Society of America, the Latin American Health Institute, the Massachusetts Coalition for the Homeless, Massachusetts Jobs with Justice, the Massachusetts Nurses Association, the Massachusetts Public Health Association, Massachusetts Senior Action Council, the Massachusetts Teachers Association, the National Association of Social Workers, Physicians for a National Health Program, UNITE-HERE, the Service Employees International Union, and the Women’s Health Institute.

——————————————————-

To learn more about the Massachusetts Health Care Trust, or to receive the full text of the bill, contact Mass-Care at info@masscare.org or call 617-723-7001. The bill’s lead sponsors are Representative Frank Hynes (617-722-2552) and Senator Steve Tolman (617-722-1280): contact them to co-sponsor the Health Care Trust now!

Click here to download this Fact Sheet as a word document.

Click here to see the full text of the Massachusetts Health Care Trust legislation.