A Cancer in the Body Politic: 41 Million Uninsured Americans

It’s not easy to make 41 million people disappear. But that’s exactly what’s happening in the campaign for Congress this fall.

The missing are the 41 million -- 41.2 million, to be precise -- Americans who don’t have health insurance, according to the latest Census Bureau figures. That’s more than one-seventh of the population. If the uninsured all lived in one place, it would become the largest state in the union, as populous as California and Massachusetts combined.

Yet you would never know it from listening to the candidates on the stump this fall, much less from watching their ads. The uninsured are the great unmentioned of the 2002 campaign: an enormous social problem and vast human tragedy that both parties are doing their best to utterly and unconditionally ignore.

But Congress (and President Bush) can’t avert their eyes forever. After dropping through the economic boom of the late 1990s, the number of Americans without health insurance is rising again -- and is virtually guaranteed to rise even faster in the months ahead.

Indeed, the health-care system may be facing its greatest strain since the sharp deterioration in coverage a decade ago that prompted President Clinton’s failed crusade to guarantee all Americans access to care. “There is going to have to be significant action,” says Kate Sullivan, director of health-care policy at the U.S. Chamber of Commerce.

The conditions for a health-care train wreck are assembling from three directions.

First is a crisis in costs. In the early 1990s, when the number of Americans without coverage rose sharply, one of the principal culprits was a dramatic rise in insurance costs. Then, as the managed-care revolution forced reductions in spending, premium increases moderated significantly through the mid-1990s.

Now, however, costs are spiking again. Employer premiums for health insurance jumped 12.7% last year (with exploding prescription drug prices a major factor), according to a recent survey by the Kaiser Family Foundation. That was the second consecutive year of double-digit increases.

The inevitable result is that fewer employers, especially small employers, are offering coverage to their workers: The percentage of firms with 200 or fewer employees who offered coverage dropped from 67% in 2000 to 61% this year.

Employers also are passing on more of the rising cost to workers. The average monthly worker contribution for a family policy has jumped from $138 in 2000 to $174 this year. Over time, higher costs will mean fewer low-wage workers can afford coverage, even when their employer offers it.

The second factor eroding coverage is the economic slowdown. The average unemployment rate has been much higher in 2002 (5.9%) than it was in 2001 (4.8%). That means more Americans are losing coverage on the job.

Taken together, the cost and employment trends have taken a bite out of the number of Americans who receive health care through their work. The census figures released late last month showed that the number of Americans with job-related health coverage dropped by about 1.3 million in 2001; a recent federal survey found that the losses in employer-provided coverage continued through early this year.

The bright spot in this picture has been that government programs have been catching more of those falling through the holes in the private system. But the prognosis for publicly provided coverage, the third factor in the equation, is looking gloomy too.

The best news in health care in recent years was the agreement between Clinton and the Republican-led Congress in 1997 to create the Children’s Health Insurance Program, a federal-state partnership to cover children of the working poor. Largely because of CHIP, government programs cover about 5 million more Americans than in 1998.

But now, even as private coverage recedes, public programs are being weakened. With state budgets squeezed by the recession (and exorbitant tax cuts in the late 1990s), 18 states are planning cutbacks in eligibility for Medicaid, which serves the poorest families.

Some states also are trimming CHIP. But the biggest threat facing the program is a complex dispute over how to reallocate federal funds from states that aren’t spending them fast enough to those (such as New York and Maryland) whose allotments aren’t big enough to sustain their programs. If Washington can’t untangle the knot, the administration projects that enrollment in CHIP will fall by nearly 1 million kids through 2006 -- even as the reduced availability of private coverage will increase the need.

Search high and low and you still won’t hear a peep about any of this in most states this fall. Unfortunately, the main exception to this silence may set back the cause of expanding coverage.

Reform advocates placed on the ballot in Oregon an initiative to establish a public system of guaranteed coverage for everyone in the state. But its huge price tag ($12 billion in annual new taxes) virtually guarantees its defeat next month.

That likely failure should reinforce the message of the Clinton debacle: The best path to progress is incremental change that ensures maximum stability for the 240 million Americans who have coverage. Washington should start by preventing further erosion in the public safety net.

That requires two steps. One is to temporarily provide states more federal money to bolster their Medicaid programs; the Senate approved such a plan last summer, but it’s stalled in the House. The other is to provide new rules for ensuring that CHIP funds are allocated to the states that need them most, as a Senate coalition led by Sen. John D. “Jay” Rockefeller IV (D-W.Va.) has proposed.

Beyond that, the path gets murky. The most promising idea for expanding coverage in recent years has been extending CHIP to working poor adults. But that model looks less attractive now because it requires a matching contribution from the states -- and most don’t have the cash. And any plan to expand coverage will have to find new ways to restrain costs, particularly for drugs.

Faced with these challenges, the men and women running for Congress are behaving like patients hoping a lump will go away if they just ignore it. But patients learn, often painfully, that in health care, delay almost always deepens the danger. The politicians may soon learn the same thing.

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Ronald Brownstein’s column appears every Monday. See current and past Brownstein columns on The Times’ Web site at: www.latimes.com/brownstein.