“Across the country, businesses already strapped by the economy to turn a profit are sacrificing or scaling back employee health insurance plans because of their escalating costs,” The Associated Press reports.

Some stark statistics shed light on the problem.

• Small business pays 18% more than the largest firms for comparable insurance
• Many small businesses are facing double-digit rate hikes (10-15% in Ohio)
• According to the Kaiser Family Foundation, 46% of businesses with 3-9 employees offer health insurance, down from 58% in 2002

Read more here…

Young adults will soon have to deal with the cost of government mandated health insurance.

Currently, a large percentage of young adults are uninsured. According to the CDC:

• Young adults between the ages of 20 and 24 are the most likely to be uninsured
• 30% of those between 18 and 29 are uninsured

In an attempt to curb this trend, Wisconsin has passed a law allowing people up to age 27 to remain on their parents’ health insurance plans unless they have access to cheaper plans through their employers.

Read more here…

An interesting question on health insurance mandates – Does the U.S. Constitution allow the government to require uninsured Americans to buy medical insurance or impose a tax penalty if they refuse?

Both the House and Senate health bills would mandate the purchase of health insurance to help subsidize the program and offset the cost of adverse selection.

Does Congress have the authority?

Read more here…

(May 11, 2009 - Photo by Chip Somodevilla/Getty Images Europe)

Individual mandates would help offset the costs associated with adverse selection.

In health insurance, adverse selection is the tendency of poorer risks to want insurance more often that standard risks (i.e. sick individuals are more likely than healthy to seek out insurance coverage.)

Under a purely voluntary system, most healthy individuals would likely not choose to obtain coverage.  The individuals most likely to enroll (subsidized insurance or otherwise) would be those who are older and/or who are less healthy than average.  People value insurance more if they plan or expect to use it, and are more likely to participate.

Without mandates, adverse selection would most certainly drive up costs for insurers and as a result, premiums would rise sharply.

Individual mandates are an attempt to offset some of the costs associated with adverse selection.

Read more here:

Do Individual Mandates Matter?

According to the Kaiser Family Foundation, average family premiums have gone from$6,438 in 2000 to $13,375 in 2009.

In 2008, Ohio employee premium contribution for family coverage was 23 percent or $2,916, leaving the employer with a $9,764 premium bill.

Source: The Kaiser Family Foundation

Where are costs going? According to a Kaiser Family Foundation projection, average premiums for family coverage could range from $24,180 to $30,803 by 2019.

Note: Health insurance premiums projected for 2010-2019 assuming (1) that the average growth in premiums between 1999 and 2009 (8.7%) continues or (2) that the average growth in premiums between 2004 and 2009 (6.1%) continues. Source: Kaiser Family Foundations projections based on data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

Taken from “Pulling it Together”: Simple Arithmetic – The Kaiser Foundation

The Kaiser Family Foundation has a website that allows an interactive, side-by-side comparison of the major health care reform proposals currently under consideration. The comparison includes a breakdown of all the key characteristics and plan components including, but not limited to the following.

• Employer and Individual Mandates
• Benefit design
• Financing

Visit the site to run your own comparison.

The following are few quick facts about health insurance costs from the National Coalition on Health Care.

• In just three years, the Medicare and Medicaid programs will account for 50 percent of all national health spending.
• The average employer-sponsored premium for a family of four costs close to $13,400 a year, and the employee foots about 27 percent ($3,618) of this cost.  Employer-sponsored premium will reach nearly $25,000 per year by 2018 ($6,750 for employees).
• Employer health insurance costs overtook profits in 2008, and the gap grows steadily.

The Impact

• A recent study found that 62 percent of all bankruptcies filed in 2007 were linked to medical expenses.  Of those who filed for bankruptcy, nearly 80 percent had health insurance.
• According to another published article, about 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs.

Read the complete list on the National Coalition on Health Care website.

The biggest loser of the House Healthcare Reform Bill is Small Business.

• Provide government-specified health insurance or pay a penalty of up to 8 percent of payroll
• 30 percent of firms with fewer than 200 employees that now offer insurance would fail the test for family coverage, and about 20 percent would fail for individual coverage

Read the New York Post article here