Employer Health Insurance Model Crumbling

Empty Wallet

Families throughout the United States have long depended on their employer’s assistance to provide health insurance coverage for their loved ones.  As the economy continues to show no signs of improvement, for lower wage earners, many people are now finding that the employer based health insurance they once depended on is in jeopardy or has been lost.

As many know, 25% of the United States population is not covered by any health insurance.  This statistic is quite sobering when you consider the daily sacrifices that many of these people are making in taking care of their health.  To make matters worse, the Associated Press recently reported that less than half of the unemployed are receiving government sponsored unemployment compensation.  With the Federal budget deep into red ink, any extension of unemployment benefits seems unlikely and would cause more families to drop their privately held health insurance policies.

The 75% of the population that has health insurance should take notice at the trend being established here.  As more people continue to lose their health insurance coverage, premiums will continue to escalate for those that pay monthly premiums.  Health insurers are for profit businesses, and they will charge the insured much more in an effort to meet profit targets.  Additionally, the 25% of individuals lacking health insurance will not be turned away at emergency rooms.  Since the cost of health care is so unbelievably expensive, a single ER visit is all it may take to bankrupt an individual.  And when these people do file for bankruptcy, and have their medical debts washed away, the health care providers must raise the fee for services for those that do pay.  This is a vicious circle which will not be stopped, and is a leading reason for the massive health insurance rates that people are now seeing.  Regardless of how one looks at the problems involving the uninsured, society as a whole has been picking up the bill for them for many years.

Recession or not, the cost of health insurance has continued to rise.  Many employers, which are struggling just to keep their doors open, have no choice but to shift the burden of health insurance to their employees.  Some businesses are discontinuing coverage altogether in an effort to compete in a “global economy” that has left many American businesses at a significant disadvantage.  Of the small business owners that I know, which have significantly modified or dropped health insurance coverage for their employees, I can say that none of them wanted to alter their employee benefit packages.  But out of financial desperation, these business owners had no choice.

While 25% of the population lacks health insurance, the number of uninsured individuals is expected to continue to rise.  What we are witnessing is the deterioration of the employer based health insurance model that has served many generations of Americans before us.  Those that argue against health care reform, and no government involvement, will certainly change their tune once 50% of the population lacks health insurance and their own monthly premiums rise two to three times what they are presently paying.