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Stupak: Uninsured Are a Cost Burden on Everyone

When we discuss paying for health care, the facts speak for themselves. Every American is already paying a steep price as a result of America’s broken health care system.

Regardless of whether you are insured, you are paying for government-sponsored health care enjoyed by 44 percent of all Americans. Even those individuals with health insurance are only an accident or illness away from financial disaster. The American Medical Association recently released a report that found 62 percent of all bankruptcies in 2007 were linked to medical expenses. An incredible 78 percent of those people had health insurance.

Individuals with health insurance argue they do not wish to pay more to provide coverage for all Americans. The irony is that the average family, including Members of Congress, are already paying $922 more each year in health insurance premiums to cover the cost of treating the uninsured. Clearly, those with health insurance are paying a steep price under the current system. Without real reform, these runaway costs will continue to grow, meaning even fewer people will be able to afford coverage, further increasing the costs for every American.

In Michigan, annual family health insurance premiums rose 78.2 percent between 2000 and 2007. Over the same period, wages for Michigan’s workers increased only 4.6 percent. The average family health insurance policy now costs $13,375 per year. In my district, the median household income is $38,771 which means 31 percent of a family’s income goes to paying for a health insurance policy with high deductibles and high co-pays.

To further compound this discrepancy between wages and health insurance premiums, the nonprofit health insurance company Blue Cross Blue Shield of Michigan recently announced it will begin assessing health risk on an individual basis rather than spreading the risk over a larger pool for small businesses with 50 or more employees. The goal of pooling together in a group is to reduce insurance costs by spreading out the risk, and therefore lowering the cost of health coverage for everyone in the group. This new policy completely negates the benefit of group insurance, and there is no clear reason for this shift other than to save the BCBS money. This is in addition to the company’s recent announcement that health insurance premiums would increase 22 percent to 40 percent starting Oct. 1. These skyrocketing insurance costs are unsustainable for families, employers and the government alike.

Even if you think you can afford health insurance premiums, the insurance industry has one more surprise for you. Earlier this month, President Barack Obama cited two examples from my Energy and Commerce Subcommittee on Oversight and Investigations hearings highlighting how “more and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick or won’t pay the full cost of care. It happens every day.” The president cited the Illinois man who lost his coverage in the middle of chemotherapy treatment and a Texas woman who was scheduled for a double mastectomy when her insurance company canceled her policy.

This post-marketing rescission of health insurance policies has saved insurance companies hundreds of millions of dollars and left the sick uninsurable. Once your health insurance policy is canceled, even wrongly canceled, no company will insure you! So when I asked the health insurance CEOs, “Would you commit today that your company will never rescind another policy unless there was intentional, fraudulent misrepresentation in the application?” each CEO answered, “No.”

Of those Americans fortunate enough to have insurance, approximately 60 percent receive it through their employer. But businesses are paying a high cost under the current system. Right now, health insurance costs are the fastest-growing expense for employers across the country. Health care costs add $1,525 to the price tag of every car General Motors produces — more than the cost of steel for that same car. Some estimates put the cost of providing employees with health insurance at nearly $850 billion by 2019. Those businesses that do not offer health benefits pay a price as well. The lost productivity of uninsured Americans costs our economy up to $130 billion a year — 30 percent more than the total estimated cost to provide these individuals with health coverage in the first place.

Hospitals are also feeling the pressure from the unsustainable rising costs of health care. My district includes 31 hospitals, and all of them have seen a dramatic increase in uncompensated care over the past two years. One hospital in the Upper Peninsula provided $6.5 million in uncompensated care in 2008, up from $1.5 million only four years ago. Another provided $13.6 million in uncompensated care last year, up 10 percent from the previous year. For rural America, hospitals are our lifeline to quality care and are among our largest employers. But many hospitals are being financially strangled under the weight of rising health care costs with fewer Americans being able to afford to pay for critical services.

Rising health care costs are taking a toll on all Americans by putting an unyielding pressure on state and federally funded programs such as Medicare, Medicaid and the State Children’s Health Insurance Program. Medicare and Medicaid — two successful government health care programs — will account for 50 percent of all national health spending in just three years. This is spending that every taxpayer pays for. Between Medicare, Medicaid, SCHIP, the Federal Employees Health Benefits Program, and health care programs for veterans and Native Americans, the government provides health care coverage to approximately 44 percent of all Americans. While these programs are important, they are far from free, and all Americans pay for these services through higher taxes.

Every single American, business, physician, hospital and health care provider are affected by the current state of health care in our nation. No one is immune to this growing problem. As such, everyone needs to take responsibility and do their part to ensure that health care reform passes this year.

Rep. Bart Stupak (D-Mich.) is chairman of the Energy and Commerce Subcommittee on Oversight and Investigations.

Editor’s Note

A government statistic included in the article was updated after the special section went to press. The average family now pays $13,375 a year for health care premiums.

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