More Americans Will Be Without Health Insurance

Despite the success employers have had holding down health costs in recent years, 7 million more Americans will be without health insurance by 2002, for a total of 46 million, the American Hospital Association reported Tuesday.

The percentage of Americans without health insurance, now 15.1 percent, will climb to 16.2 percent over the six years, according to the report, which was prepared for the AHA by Lewin Group, a health research company.

“We must not ignore the increasing number of our neighbors who, through no fault of their own, are losing their health insurance,” said AHA President Dick Davidson. “Working Americans should not have to exhaust their life savings or rely on charity for their basic health needs,” he said.

The dwindling numbers are due in part to shifts in the economy. The service sector, where companies are less likely to offer health insurance, is growing rapidly, while manufacturing is shrinking. Traditionally, manufacturing and other unionized industries have health insurance coverage.

In addition, many companies are turning portions of their work over to outside contractors, who frequently do not provide coverage for workers. And companies are reducing or eliminating coverage for workers who take early retirement, the AHA said.

“Unless the private sector and government together find a way to get health coverage to all Americans, our efforts to improve the health of communities and contain health care costs will fail,” Davidson said.

Federal law allows workers to continue to keep their health coverage after they quit or are laid off. However, a worker must pay the company’s share of the insurance premium as well as his own, and an additional 2 percent charge for administrative costs.

The newly unemployed worker often finds it hard to make the payments. The average monthly premium last year, in situations when workers paid the full cost after leaving the job, was $177 a month for individuals and $464 a month for families.

About three-quarters of workers let their coverage lapse when they leave a company, according to the study.

The economy is “putting downward pressure on employers that provide health benefits, and downward pressure on family incomes,” said E. Richard Brown, director of the UCLA Center for Health Policy Research.

Employers are looking for ways to control their costs, and this could mean seeking a better deal when they buy insurance, keeping insurance coverage but making workers pay more, or dropping coverage entirely, he said.