Washington, D.C. – While much national attention has focused on the uninsured, there is an almost invisible but growing crisis among insured families, as rising health care costs devour an ever-growing portion of their pre-tax income. In Wisconsin alone, 1,216,000 people under the age of 65, 90.1 percent of whom are insured, are in families that will spend more than 10 percent of their pre-tax family income on health care costs in 2008, according to a report issued today by the consumer health organization Families USA.
In addition, there are 322,000 Wisconsinites in families that will spend more than 25 percent of their pre-tax income on health care costs in 2008.
Health care is the top domestic concern among voters in the upcoming elections. This new report is designed to project how significant health care costs will be for family budgets when voters go to the polls in 2008.
The Families USA report is the first of its kind to document these costs on a state-specific basis. The key findings in the report show that high health care costs are not just a problem of the uninsured. More and more families with insurance are affected by rising health care costs, and, for many, the burden of these costs has become too great to bear.
The key findings in the report look at the number of people in families that spend more than 10 percent of their pre-tax income on health care costs:
- In 2000, 772,000 non-elderly Wisconsinites were in families that spent more than 10 percent of their pre-tax income on health care costs.
- Between 2000 and 2008, the number of people in families spending more than 10 percent of their pre-tax income on health care costs will have increased by 443,000. This increase is nearly twice the size of the entire population of Madison.
- More than nine out of 10 people (90.1 percent) in families spending more than 10 percent of their pre-tax income on health care costs are insured.
- 1,096,000 non-elderly Wisconsinites with insurance are in families that will spend more than 10 percent of their pre-tax income on health care costs in 2008.
The report also looks at the number of people in families that spend more than 25 percent of their pre-tax income on health care costs:
- In 2000, 196,000 Wisconsinites were in families that spent more than 25 percent of their pre-tax income on health care costs.
- Between 2000 and 2008, the number of people in families spending more than 25 percent of their pre-tax income on health care costs will have increased by 126,000. This increase is greater than the population of Green Bay.
- More than four out of five people (85.7 percent) in families spending more than 25 percent of their pre-tax income on health care costs are insured.
- 276,000 Wisconsinites with insurance are in families that will spend more than 25 percent of their pre-tax income on health care costs in 2008.
As the Families USA report demonstrates, thousands of Wisconsinites are in families that face high health care costs. A number of factors have driven this phenomenon. First and foremost, health insurance premiums are increasing. As premiums rise, employers are forced to make tough decisions about the coverage they offer to their employees: some drop coverage, others increase the share of the premium that employees must pay, and more offer insurance that covers fewer services and/or requires high out-of-pockets costs. As a result, Wisconsin families must shoulder a greater portion of health care costs.
“Wisconsin families are hit hard in the pocketbooks due to skyrocketing health costs,” said Ron Pollack, Executive Director of Families USA. “As a result, Wisconsinites are spending much larger portions of their family incomes on health care costs—and health care is becoming less and less affordable.”
"Our current health system needs to be fixed. Costs continue to skyrocket, our population is aging, millions of children are without health insurance, and businesses are being priced out of providing employee health coverage. We need to make it a top priority to provide health care relief to people in Wisconsin by lowering the cost of prescription drugs, increasing generic competition, and providing assistance to the young and old who lack insurance," Senator Kohl said.
"I want to thank Families USA for shedding much-needed light on the struggle many Wisconsin families are having with health care costs. Health care costs are rising far beyond what more and more Wisconsin families can afford. Families should not be driven into debt or forced to forego essential health care because of outrageous health care costs. This report from Families USA shows how urgent the need is for Congress to break the political stalemate blocking health care reform, before these skyrocketing costs hurt more Wisconsin families. I look forward to continuing my work with Families USA and others to ensure affordable health care is available to all Americans," Senator Feingold said.
"If we are going to really combat this issue, we must recognize that 60 percent of Americans without health insurance are from families where the head of household is self-employed or works in a small business," Representative Ron Kind said. "Rising health care costs are pricing entrepreneurs, small business owners and family farmers out of the market, or forcing them to drop coverage for their employees. We should be providing incentives for small businesses to provide comprehensive coverage to their employees, not stacking the deck against them."
Representative Kind has introduced a bill that would eliminate the 15.3 percent payroll tax on health insurance premiums for the self-employed, currently the only segment of the business population that pays this extra tax on health insurance.
“I welcome this report from Families USA on the number of underinsured in Wisconsin and around the country,” said Congresswoman Tammy Baldwin (WI-02). “The data confirm what we’ve know for a long time—that for too many people, chronic and catastrophic illnesses create financial setbacks from which entire families may never recover. This is wrong! This report strengthens our case for universal health care in this country, but it is a case that we, the people, must fight for and win,” Baldwin said.
According to the report, these fast-rising health care costs are forcing increasing numbers of people to look for new ways to pay for care. With the majority of doctors' offices and hospitals now accepting payment by credit card, paying for health services via credit card is becoming increasingly common. Recent data show that more than one in four people with insurance report having trouble paying their medical bills or say that they are in the process of paying off medical debt.
“If this troubling trend continues, the health care affordability crisis will get much worse, and many more Wisconsinites will become uninsured and underinsured,” said Pollack. “The high health care costs faced by families are a clear indication that insurance simply no longer offers the protection that America’s families need.”
To determine how many Wisconsinites are in families that face health care costs in excess of 10 and 25 percent of pre-tax family income in 2000 and 2008, Families USA asked The Lewin Group to analyze data from the U.S. Department of Health and Human Services and the U.S. Census Bureau.
PDF of full report
