Health Care Tip Sheet

Released: 7/10/2009 1:00 PM EDT
Source Newsroom: University of Chicago
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How do Americans feel about government spending on health?

Health care and education are Americans' two top governmental spending priorities, according to a major survey conducted by the National Opinion Research Center at the University of Chicago. In each General Social Survey (GSS) from 2000 through 2008, health care and education ranked first and second among 20 spending areas. In 2008, 76 percent thought the government was spending too little on health care, 16 percent about the right amount and 8 percent too much. When asked whether the government is responsible for helping pay doctor or hospital bills, the majority of respondents wanted more government assistance. Since 2004 the GSS surveys have shown that 52 to 53 percent back more government help for health care, 29 to 32 percent agree both with more help and personal responsibility, and 15 to 16 percent favor personal responsibility rather than more government assistance.

Why is health care spending going up?

While much attention has focused on the cost of health care, a study by a Nobel-prize winning economist at the University of Chicago shows that spending on health care as a percentage of gross national product could double in the next 30 years. Recent research by Robert Fogel, an expert on health economics and the economics of aging, shows that health care spending could rise from accounting for 15 percent of gross domestic product today to 29 percent in 2040. At the same time, American life spans will keep lengthening, but that the result will be growing demand for medical care and technology. Half of today's undergraduate students will live to see their 100th birthday, provided they counteract their sedentary, tech-enabled lifestyles, Fogel predicts. Spending on health care will rise not simply because of rising costs for the same care, because people will buy more health care. They will have more interaction with medical professionals, and they will increase the scale of their medical work. This will be because people will have more disposable income because costs for food, clothing and shelter will decline.

Looking at Medicare, what have been some of the problems?

Fourteen percent (3.4 million) of the nation's 24 million Medicare Part D enrollees said they stopped taking their medications when they reached the plan's coverage limit, a phenomenon known as the "Doughnut Hole." A study by researchers at the National Opinion Research Center (NORC) at the University of Chicago, Georgetown University and the Kaiser Family Foundation found that beneficiaries with chronic conditions were much more likely to reach the coverage limit ($2,700 in 2009), after which they would be required to pay 100 percent of the cost of their medications before reaching a catastrophic limit ($6,154 annually, then the plan would pay 95 percent of expenses). Ten percent of diabetics stopped taking their medication after reaching the gap, putting them in danger of serious health complications. Additional information on Part D plans, released June 11, found that the share of plans offering coverage of mostly generic drugs in the gap has increased, while full coverage of brand-name drugs in the gap has virtually disappeared.

What about the underinsured problems of current health care plans?

Out-of-pocket health care costs increased 34 percent between 2004 and 2008, according to a study authored by researchers from the National Opinion Research Center (NORC) and Watson Wyatt Worldwide. The study also found rising rates of underinsurance and lack of affordability, particularly for poorer and sicker people. In 2007 adults with employer coverage spent an average of $729 per person in out-of-pocket costs such as deductibles, copayments and coinsurance—a 34 percent increase from 2004. The study also found that the number of individuals in employer plans who were underinsured (i.e., expected to spend more than 5 percent of their income in out-of-pocket spending for medical services excluding premiums) grew from 16.5 percent in 2004 to 20.3 percent in 2007. Among the underinsured individuals who were in the top 25 percent in health care spending, the underinsurance rate was 71 percent. Researchers also found that affordability decreased at all incomes levels between 2004 and 2007. For example, about 18 percent of those with family incomes at or below 200 percent of the federal poverty level spent more than 10 percent of their incomes in out-of-pocket spending in 2007, up from 13 percent in 2004. Coverage was considered affordable, if the combination of out-of-pocket spending for premiums and medical services did not exceed 10 percent of income.

What are some shortcomings of our current system?

The lack of a uniform, national sick-leave policy is one of the overlooked aspects of health care reform. The recent emergence of swine flu, along with encouragement that people with illness stay home from work, calls attention to the lack of a national uniform policy on sick leave. A study by the National Opinion Research Center shows that with the exception of San Francisco and Washington, D.C., employers are not required by law to provide paid sick days for workers. The study showed that more than 40 percent of private sector workers—and 75 percent of low-wage workers—lack paid sick days. The study also showed that 68 percent of people without paid sick leave said they had had to go to work when they "were sick with a contagious illness like the flu or a viral infection." The study showed that one in six workers knew that a family member had been fired, suspended, punished or threatened with being fired for taking time off due to personal illness or to care for a sick child or relative.


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