Thursday, November 13, 2008

Recession impacts health insurance

An artice in Time (November 13, 2008) predicts that the number of uninsured Americans will rise sharply to above 50 million within the next few months. This pessimistic prediction assumes that many employers will drop their group health plans to combat the recession by the end of the 2008 calendar year and that many of these individuals will not obtain alternate health insurance on their own. The prediction also assumes that employers would drop health coverage altogether rather than switch to one of the low cost limited beneft plans now available. We see no reason to support these assumptions.

The number of uninsureds has actually decreased slightly over the past two years as more affordable insurance plans have been introduced to the market according to our "Covering the Unisured: 2008 Update" report. The cost of employer provided health insurance coverage for an employee without dependents is about $6,000 per year and COBRA coverage cost slightly more. But the cost of individually purchased short term medical insurance averages only about $1,800 per year. About 72% of Americans currently qualify for this type of low cost short term medical insurance. (Short term medical insurance is not available to the residents of four states or individuals with serious pre-existing medical conditions).

Given this viable and affordable alternate coverage possibility, it seems unlikely that more than an additional four million people would choose to go without any health insurance in 2009.

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