Background to Health Care Reform

Statistics to Help Understand Health Care Reform

The following helpful statistics provide:

  • Context to the issues in health care
  • An answer to the question "Who are the uninsured?"
  • An overview of Medicare, the largest health care payer in the United States

Who has health insurance?

  • About 159 million Americans get health insurance through employer-sponsored plans, 49 million through Medicaid, and 45 million through Medicare.
  • 46 million Americans have no health insurance, public or private.

Costs of health care

  • In 2007, the nation's total health care bill was about $2.2 trillion, or 16 percent of the gross domestic product.
  • Other developed nations spend a lot less. In 2006, the U.S. spent $6,714 per person, while Switzerland, whose expenses were next-highest, spent $4,311.
  • If expenses continue to climb at this rate, health care will take 20 percent of GDP by 2017, 25 percent by 2025.

The cost of preventable diseases

  • Meanwhile, the Centers for Disease Control says 70 percent of our health expenditures are for chronic, preventable diseases.
  • The CDC also says a major reason for those diseases is that 2/3 of us are overweight or obese.
  • Insurance company actuaries calculate that maintaining all those extra pounds takes the equivalent of 114 billion doughnuts or 42 billion double cheeseburgers a year.

Who are the uninsured?

  • 17 percent of the population are uninsured (46 million people).
  • Between 52 and 59 percent are poor or near poor (incomes below 200 percent of the poverty level, which is $22,050 for a family of 4).
  • 4 out of 5 are from working families - full or part-time.
  • About 10 percent of the uninsured have incomes above 400 percent of the poverty level.
  • 12 percent of whites, 21 percent of blacks, 24 percent of Hispanics, 18 percent of Asians are uninsured.
  • 20 percent are under age 18; 29 percent are between 19 and 29; 42 percent are between 30 and 54; 9 percent are between 55 and 64.
  • 79 percent are American citizens; about 13 percent are undocumented immigrants.
  • Almost 1/2 of all non-elderly adults who are uninsured have chronic conditions, which can make insurance coverage unaffordable.
  • The average insured family pays $1,017 in extra premiums each year to cover the health care costs of the uninsured.

Public Health Coverage

Medicaid and Medicare are U.S. government-sponsored health care programs. In fact, Medicare is the largest health care payer in the country.

Medicaid is a federal-state entitlement program providing medical care for low-income Americans, and long-term care services for the elderly and people with disabilities. Each state designs and administers its own program, but benefits must fall within federal guidelines. The federal government pays most of the tab by matching the states' contributions according to a complicated formula. In 2007, 49 million people on average were enrolled at any time; total state and federal expenditures were $333 billion.

Medicare: A federal entitlement program that dates to 1965, mostly for people 65 years and older, but also for individuals with disabilities. 45 million Americans are on Medicare this year; enrollment is expected to reach 77 million by 2031. The cost of the program to taxpayers was $440 billion in 2007, making it the largest health care payer in the U.S.

How Medicare Works

Original Medicare has two parts:

  • Part A helps cover hospital expenses, short-term skilled nursing home care, hospice and home health care. Coverage is automatic - no premium cost.
  • Part B helps cover physician and outpatient services. Cost to most beneficiaries in 2009 was $96.40 per month.

Some beneficiaries also enroll in supplemental plans called "Medigap" - which fill in some holes in Original Medicare coverage.

Part C (Medicare Advantage) combines Parts A and B. It allows beneficiaries to receive Medicare benefits through private health plans, which try to control costs by costs by keeping beneficiaries healthier and coordinating their care. These plans often include a prescription drug plan and a network of doctors and providers. The 10 million MA enrollees have lower out-of-pocket costs and get additional services such as case management, nurse hotlines, and nutrition and activity programs. Members typically pay a monthly premium in addition to the Part B premium.

Medicare Part D - enacted in 2003 - helps pay for prescription drugs. Policies are available through private insurers. Average monthly premium is $30.36.

Additional Reading about Health Care Reform

Influencing the debate:

  • Dartmouth Health Atlas: Dartmouthatlas.org
  • "The Cost Conundrum," by Atul Gawande: NewYorker.com

Tracking the debate

  • Kaiser Health News: Kaiserhealthnews.org
  • America's Health Insurance Plans: Americanhealthsolution.org

Policy background

  • Kaiser Family Foundation: kff.org

Health Care Reform: Market Reform Issues

Watch Healthcare Video: Why Do We Need Health Reform?