Recession Leads to Insurance Loss, Health Reform to Help

The recession has stripped millions of people of not only their jobs but also their health benefits, putting their finances and access to health care at risk. According to the new Commonwealth Fund 2010 Biennial Health Insurance Survey, an estimated 9 million working-age adults became uninsured last year when they lost a job that had health benefits.

The survey report, which examines the health insurance of adults ages 19–64, shows that few affordable insurance options are available for the newly uninsured. Just 25 percent of adults who lost their employer benefits were able to go on to their spouse's insurance policy or find another source of coverage. And only 14 percent continued their coverage through COBRA. Workers with low incomes fared even worse: 70 percent of adults with incomes under 200 percent of the federal poverty level who lost their job and health benefits became uninsured, compared with 42 percent of those with incomes of 200 percent of poverty or more.

Because access to Medicaid is limited in most states, and few people enroll in COBRA, many people have turned to the individual market for insurance. Yet 71 percent of adults, or 19 million people, who tried to buy individual coverage in the past three years found it very difficult or impossible to find a plan that fit their needs; or one that was affordable; or they were turned down, charged a higher price, or had a benefit exclusion because of a preexisting condition.

The survey finds that both insured adults—who are facing higher premiums and out-of-pocket costs—and uninsured adults cannot afford adequate health care. Seventy-five million adults did not get needed health care in 2010, skipping doctor visits, prescriptions, specialist care, and recommended tests and treatments because of costs. This represents a 60 percent increase from 2001, when 47 million people reported skipping needed care because of costs. Uninsured adults were the most likely to forgo care because of costs, with 66 percent reporting they did so. However, many insured adults were also less insulated from high health care costs—31 percent of adults who were insured all year went without the health care they needed because of costs, up from 21 percent in 2001.

Likewise, 73 million people reported problems paying their medical bills or were paying off medical debt, up from 58 million in 2005. The survey finds that because of medical bills, an estimated 29 million people spent all of their savings, 17 million incurred credit card debt, 22 million were unable to pay for basic necessities like food, heat, and rent, and 4 million declared bankruptcy.

These difficult experiences, borne by people across the income spectrum, illustrate just how critically the country needs the Affordable Care Act, which was signed one year ago this month. Some reforms are already providing relief in the form of preexisting condition insurance plans, allowing young adults up to age 26 to join or remain on their parents' plans, small business tax credits to offset premium costs, and required copay-free coverage of preventive care, among others. Once the law is fully implemented in 2014, nearly all of the 52 million currently uninsured American adults, including those who became uninsured during the recession, will have access to comprehensive health insurance through a substantial expansion in eligibility for Medicaid, subsidized private plans through new state health insurance exchanges, and new consumer protections for private coverage. At that point, U.S. families will finally have financial and health security provided by a continuous source of health insurance, both in good economic times and bad.