No Comments March 9, 2008 – 4:00 am

Although there is no conclusive evidence, a growing number of economists and financial strategists are beginning to think that the staggering surge in healthcare costs over the past three decades has literally caused a transformation of the economic landscape itself. Since 1974, the average cost of healthcare has increased by an average annual rate of 9.9%. This figure dwarfs the average annual increase in GDP to the point that Americans now spend 1 out of every six dollars (a total that exceeds $2 trillion USD in 2006) on healthcare related costs.

With no end in sight to the increasing healthcare costs, it is absolutely imperative for citizens to have health insurance to avoid incurring a huge burden of debt in the event of an accident or illness. However, while having health insurance has never been more critical, the sheer weight of the rising healthcare costs has caused premiums to skyrocket. This vicious cycle seems to be building momentum leaving a growing number of hard working people with fewer good options when it comes to having health insurance.

There was a time when simply having a full-time job virtually ensured you at least some degree of health coverage as part of your compensation for employment. In 1987, nearly 70% of all Americans were covered under some form of employer-sponsored health insurance. In 2005, that figure had shrunk to a little over 59% and that figure is sure to go much lower in the coming years.

The process of globalization has put increased pressure on businesses to sell their goods or services for the best possible price while controlling all costs and expenses to unprecedented levels. Through no fault of the employee and even with wages at stagnant growth rates, the cost of labor continues to rise at staggering rates due to one common factor: the increasing cost of providing health insurance. This increasing expense has forced companies to adopt a variety of tactics to help control the costs, including:

• Cutting Benefit Packages: Lowering the amount of overall coverage, increasing deductibles, and essentially paring down the overall plan are all policies being pursued by businesses in an effort to combat this growing expense.
• Raising Employee Contribution: Essentially, employees are being asked to pay more for a diminishing coverage
• Using More Staffing Agencies: By lowering the number of “full-time” employees to the bare minimum and then supplementing with temporary workers (who are not entitled to health insurance through the company since they are only “temps”), business lower the total they must pay for health insurance.
• Increasing proportion of part-time workers: 32 hours or more is considered to be full-time in most states and the point where employees are entitled to health insurance if the business is large enough. However, even big businesses are trying to control their rising health insurance costs by redefining job titles and reclassifying employees with a “part-time” status. Not only does this stop-gap method leave hard-working employees without medical insurance, it also effectively lowers their income by reducing hours.
• Increasing Use of Outsourcing: To lower the number of employees who must be provided health insurance, businesses are resorting to outsourcing to countries with less stringent or perhaps non-existent employment laws regarding health coverage.

In all of the above strategies, the consistent loser is the worker while the actual problem is the unchecked increase in health care costs which have driven health insurance rates through the roof. These methods have only served to increase the number of uninsured to even higher levels while placing the financial burden of the health insurance crises squarely on the taxpayer. Over 100 billion taxpayer dollars was spent in 2005 paying for healthcare for those without health insurance while businesses continued to add to the problem by reducing or eliminating coverage for millions of workers. Here is just a glimpse of the severity of the Health Insurance Crisis currently taking place in the United States:

• Nearly 50 million Americans (16% of the entire population) are completely without any form of health insurance
• 80% of the uninsured come from working families
• One in five working adults (aged 18-64) do not have health insurance
• 1 in 3 went without health insurance at some point in 2002 and 2003
• Over 80% of those without health insurance are native to the United States

Most of the new jobs created in the past five years were by small businesses (under 50 employees) who either cannot afford or are not compelled by law to offer health insurance to employees and their families. With Corporate America responding to the problem via outsourcing, job reclassification, and using temps, more and more people are being added to the rolls of the uninsured which only adds to the public cost of providing coverage.

However, with the skyrocketing costs of procedures and medication, it has never been more critical for someone to maintain the best possible health insurance. One major accident or illness could literally scar you financially for the rest of your life so the need for coverage is very real and necessary. Major illnesses are often avoided with proper preventative care so even the loss of coverage for a couple of years could lead to major problems and increased expenses down the road.

This report was created to help anyone, whether receiving health insurance through an employer or not to those working on their own in some form of self-employment capacity, make the best possible decision when choosing the best option for health and dental insurance.