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U.S. Health Insurance Industry Essay

I.Brief Overview

In the past ten (10) years, health costs in America have soared to record levels while more and more Americans are uninsured and access to quality health care becomes more problematic. Unemployment rates, higher insurance premiums, a rise in chronic illness nationwide and less than effective attempts to fix the problem such as Obama care and changes in Medicaid only exacerbate the problem.

According to the Center on Budget and Policy Priorities, “poverty rates in 2010 were the second highest in 45 years. The level of persons falling below the poverty rate is second only to the level in 1965. The rate in 2010 reached a level of 15.1% of all American resulting in one (1) and seven (7) Americans falling below an income of $22,314 for a family of four (4)”(Trisi et. al. 2011, p.1). The report also stated that, “in 2010, the number and share of Americans who lived below half of the poverty rate ($11,157 for a family of four (4)) reached its highest level on record. Some 20.5 million people, nearly 6.7% of the population, had incomes this low” (Trisi et. al., 2011, p.1).

There is no doubt that numbers such as these reveal people without sufficient income which places a substantial burden on the national health care system. Obtaining adequate health care services goes by the wayside when meeting basics necessities such as housing, clothing and food becomes the priority for impoverished families. Moreover, such numbers places a tremendous strain on healthcare providers due to a lack of sufficient funding and increases insurance premiums for those who can pay to cover uninsured and underinsured Americans. Often times, persons without the ability to pay for healthcare consequently lack the ability to access needed preventive and/or quality healthcare services thus impacting the incidence of chronic illness such as heart disease, diabetes and childhood obesity.

II.Rise in Uninsured and Underinsured Americans

In 2010, not only did we see a drastic number of Americans without the ability to pay for quality health care services, but 2010 also reflected a reduction in the number of persons on employer-sponsored healthcare coverage. According to The Economic Policy Institute (2011), “the recession ended in 2009, labor markets continued to deteriorate beyond this year. Unemployment rates increased from 9.3% to 9.6% in 2010 and long term unemployment rates (unemployed more than 27 weeks) rose 31.2% to 43.3% during the same period. Employment-based health insurance coverage for persons under the age of 65 years eroded in nine of the last 10 years including a .07% drop from 59.4% to 58.6% in 2010” (Gould, 2011 p.1). The also reported the following from 2000 to 2010 (Gould, 2011, pgs.1-4):

• 49.1 million Americans under 65years of age were uninsured. • Number of employer insured Americans dropped from 69.1% to 58.6%. • Number of employer insured Americans Under age 18 dropped from 66.7% to 54.6%. • Lowest number of Americans covered under an employer insured program was between the ages of 18-24 years • Rates for Americans under the age of 18 and 18-24 years would be much higher if not for the passage of healthcare reform and the Recovery Act of 2009.

With the decrease of persons covered under employer sponsored healthcare coverage, stress placed on public assistance and government-sponsored healthcare systems has only increased during the same time period. Theses figures also reveal that for many populations, stable health insurance does not exist for them. Today, unemployment rates stand at 8.3 % according to Bureau of Labor Statistics (Bureau of Labor Statistics, 2012. p.1 ).

Data extrapolated by race also shows more concerning trends. According to a briefing released by the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (2011), “ three (3) out of every 10 persons of Hispanic origin are uninsured (30.7% of all uninsured), while 20.8% of all uninsured were African American and only 11.7% uninsured where white, non-Hispanic” (U.S. DHSS, 2011. p. 1).Based on these figures, 88.3% of all uninsured Americans are comprised of some minority group.

III. Healthcare Costs: Financial and Strain on Public Systems

In the past decade, healthcare costs have risen dramatically while uninsured Americans have increasingly burdened public systems. It is estimated that by “2016, total health spending will reach $2.1 trillion. From 2006-2007, employer provided healthcare premiums rose 6.1% nationally. Spending in the U.S. on healthcare in 2006 was twice as much per capita when compared to nations such as Australia, Canada, United Kingdom and Germany” (Alliance for Health Reform, 2012).

In most cases, uninsured persons cannot pay for or only pay a portion of a healthcare they seek. Often times, such care is delayed from the onset of symptoms they initially experience. Healthcare sought by such individuals is generally sought on an emergency basis. Due to a lack of full payment, uncompensated healthcare costs have vastly increased over the years. In 2008, the Kaiser Commission found that “Uninsured people paid for about $30 billion in healthcare costs, yet they received more than $56 billion in care in the U.S. Federal and state governments cover at least 75% of all uncompensated care, providing some $43 billion to healthcare providers in order to defray costs” (Kaiser Commission, 2008, p.1). In the end, such dollars are paid either through a shifting of costs to consumers paying higher insurance premiums or higher federal or state taxes.

Ultimately, State and local governmental budgets have become strained by the current healthcare system, but local service providers have become taxed as well. For example, many uninsured Americans utilize hospital emergency rooms as everyday wellness centers seeking treatment for the common cold to catastrophic illness or injuries. A study conducted by The American Academy of Pediatrics in 2004 found that well over “100 million Americans (30 million children) seek and receive care in an emergency room annually.

Over the years, emergency room use by indigent persons has become routine which has saturated our emergency rooms across the country. Such a rise was prompted in 1985 by the passage of the Emergency Medical Treatment and Active Labor Act which effectively prevented the “dumping” of persons who present themselves for treatment at an emergency room but cannot pay” (American Academy of Pediatrics, 2004 pgs. 1-4). Essentially, the Act requires all Medicare recipient hospitals to treat all persons regardless of their ability pay. The study found that such “hospitals incur approximately $425 million in emergency rooms expenses annually” (American Academy of Pediatrics, 2004 p. 4).

IV. Chronic Disease on the Rise in America/Accessibility Issues Prevail

Chronic disease such as heart disease, cancer, diabetes and obesity is at epidemic proportions in America. Uninsured Americans clearly are at higher risk for chronic illness due to a lack or delay in care in many cases where they do not receive both preventive and quality care. A report issued by the Center for Disease Control and Prevention revealed “one (1) in every 3 adults are obese and one (1) in every five (5) children between the ages of 6 and 19 years of age are obese” (Center for Disease Control and Prevention, undated. p.1). Another report by the Center stated that “childhood obesity has more than tripled in the last 30 years. The number of children between the ages of six (6) and 11 who were obese was seven (7) percent in 1980 and in 2008; the figure had risen to 20%” (Center for Disease Control and Prevention, undated. p.1).

In 2011, The Center issued a report stating that “From 2006 to 2010, age-adjusted coronary heart disease prevalence in the United States declined overall from 6.7% to 6.0%. Similar declines were observed across age group, sex, and education categories. Among racial/ethnic populations, declines from 2006 to 2010 were observed among whites (6.4% to 5.8%) and Hispanics (6.9% to 6.1%). But such declines did not occur in African American population” (Center for Disease Control and Prevention, 2011. p.1).

But for the uninsured, the prevalence of chronic disease is more profound and their accessibility to needed medical care is problematic. Both situations create a cyclical effect that feeds off of each other which further increases healthcare costs in the United States. A study funded by the Robert Wood Johnson Foundation found that “the uninsured were 27% more likely to suffer from a chronic disease as compared to their insured counterparts. Moreover, the report revealed that “of the 15.6 million uninsured adults in the U.S.: (1) 49% of them with a chronic condition forego treatment or prescriptions and (2) 40% have unmet needs for dental care” (Davidoff et al. 2005. p.17). Clearly, uninsured Americans who suffer from a chronic illness fail to seek or obtain the requisite medical care they need.

Reference Page

Trisi D., Sherman A., Broaddus M. (2011, September 14) Center for Budget and Policy Priorities. Poverty Rates Second Highest in 45 Years; Record Numbers Lack Health Insurance, Lived in Deep Poverty. Retrieved from: http/

Gould E. (2011, September 13) The Economic Policy Institue. 2010 marks another year of decline for employer-sponsored health insurance coverage. Retrieve from:

U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (2011) Overview of the Uninsured in the United States: A Summary of the 2011 Current Population Suvey. Retrieved from:

Alliance for Health Reform (2012, March 9) A Reporter’s Toolkit: Health Care Costs. Retrieved from:

Hadley J, Coughlin T, Holahan J, Miller J. (2008, August). Covering the Uninsured in 2009. Kaiser Commision. Retrieved from

American Academy of Pediatrics (2004). Overcrowding Crisis in Our Nation’s Emergency Departments: Is our Safety Net Unraveling?. Retrieved from;114/3/878

Bureau of Labor Statistics, (2012, March 9). Economic News Release. Retrieved from

Center for Disease Control and Prevention, (undated). Chronic Diseases are the Leading Causes of Death and Disability in the U.S.. Retrieved from:

Center for Disease Control and Prevention, (undated). Childhood Obesity Facts Retrieved from:

Center for Disease Control and Prevention, (2011, October 14). Prevalence of Coronary Heart Disease — United States, 2006—2010. Retrieved from:

Source: Davidoff A., Kelley G, (2005) , “Uninsured Americans with Chronic Health Conditions: Key Findings from the National Health Interview Survey”. Robert Wood Johnson Foundation. Retrieved from

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