US health insurance system puts nation at risk

American adults having inadequate health insurance to cover their healthcare costs increased by 60 percent to 25 million people from 2003 to 2007.

Photo: US health insurance system puts nation at risk

Families with middle and higher incomes were hit hardest. Specialists say that insurance, as the ticket into the healthcare system does not buy financial security for many people.

A survey conducted in 2007 among 3,501 US adult citizens showed that many of them were underinsured. It is worthy of note that the number of inadequately insured adults was 16 million in 2003.

The study also showed that many Americans do not have insurance at all. Underinsured people who have health insurance spend about ten percent of their income on out-of-pocket medical expenses. For people below 200 percent of the federal poverty level, being underinsured means spending more than 5 percent of income on out-of-pocket medical costs. Being underinsured also means paying deductibles of 5 percent or more of family income.

The US market-based health care system relies heavily on private and not-for-profit health insurance, which is the primary source of coverage for most Americans. According to the United States Census Bureau, approximately 84% of Americans have health insurance; some 60% obtain it through an employer, while about 9% purchase it directly. Various government agencies provide coverage to about 27% of Americans (there is some overlap in these figures).

Public programs provide the primary source of coverage for most seniors and for low-income children and families who meet certain eligibility requirements. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals, Medicaid, funded jointly by the federal government and states but administered at the state level, which covers certain very low income children and their families, and SCHIP, also a federal-state partnership that serves certain children and families who do not qualify for Medicaid but who cannot afford private coverage. Other public programs include military health benefits provided through TRICARE and the Veterans Health Administration and benefits provided through the Indian Health Service. Some states have additional programs for low-income individuals.

In 2006, there were 47 million people in the United States (16% of the population) who were without health insurance for at least part of that year. About 37% of the uninsured live in households with an income over $50,000.

In 2004, US health insurers directly employed almost 470,000 people at an average salary of $61,409. As of the fourth quarter of 2007, the total US labor force stood at 153.6 million, of whom 146.3 million were employed. Employment related to all forms of insurance totaled 2.3 million. Mean annual earnings for full-time civilian workers as of June 2006 were $41,231; median earnings were $33,634. The insurance industry also represents a significant lobbying group in the US. For the 2007-2008 election cycle insurance was the 8th among industries in political contributions to members of Congress, giving $13,411,561, of which 56% was given to Democrats (lawyers and law firms were number 1, giving $59,205,616, of which 80% went to Democrats).