Health Insurance Coverage Keeps Shrinking as Premiums, Family Costs Climb Even Higher

HCAN-Affordability.jpgSkyrocketing premiums and out-of-pocket medical costs are battering family budgets, eroding U.S. competitiveness in the global economy and threatening the American standard of living, once the envy of the world. As President Barack Obama and his economic advisers have repeatedly said, health costs are increasing at an unsustainable rate, and the national economy will not thrive unless they are reined in. Health care reform that guarantees quality, affordable care for everyone in the United States — and offers the choice of a public health insurance plan — can do what our private health insurance system has failed to do: provide economic security for families and the nation.

An overwhelming majority of Americans say they agree. A new survey sponsored by the independent, nonpartisan Employee Benefit Research Institute shows 83 percent of Americans support the public health insurance plan option — despite relentless, misleading attacks by a vocal minority in Congress who misrepresent the concept and the positive impact of a public health insurance plan. Half-measures, such as those being proposed by self-interested opponents of authentic health reform, will not provide Americans with health security or enable them to afford the care they need.

This report documents the irrefutable conclusion that health care and health insurance are becoming increasingly unaffordable for a growing portion of the U.S. population.

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Health Insurance: Unaffordable Now, And Destined To Get Much Worse

Mouse over each state to see the percentage of median income absorbed by employer-sponsored insurance in 2006, and what that percentage would be in 2016 without a change in policy.
Click a state and the document icon to get the full report.

Increase in cost of insurance
as share of median income,
from 2006 to 2016
     70% and lower
     71% to 85%
     86% to 100%
     101% to 115%
     115% or higher

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Health Care Reform Recommendations

To ensure health care reform guarantees everyone will have access to quality, affordable health care, Health Care for America Now (HCAN), a national coalition of more than 1,000 organizations, makes the following recommendations:

  • For families purchasing health insurance, subsidies based on the federal poverty level must be regionally adjusted to account for drastic cost-of-living variations among urban and rural areas.
  • Individuals, employers and government have a shared responsibility to contribute to the cost of extending affordable health coverage to everyone.
  • The government should not tax employer-sponsored health insurance benefits.
  • Benefit packages should be comprehensive and defined as a benchmark for all insurance plans.
  • There should be no annual or lifetime caps on benefits payable by a health insurance plan.


  • In the last nine years, the cost of health insurance has risen 120 percent while wages grew only 29 percent. Health insurance premiums have risen so high that experts forecast 52 million Americans will be uninsured next year.
  • The lack of health insurance coverage causes 22,000 deaths each year in the U.S. People without health insurance are more likely to delay medical care, to get less care and to die when they get sick.
  • Among the uninsured, 80 percent are employed. Total health insurance premium contributions and cash outlays for an average family of four climbed 7.4 percent this year to $16,771.
  • The average combined cost of health insurance premiums paid by employers and workers climbed to $12,680 for family coverage in 2008.
  • The number of Americans in families with problems paying medical bills in 2007 climbed to 57 million, or one in five, up from one in seven in 2003.
  • Since 2004, employees have seen their cash outlays for health insurance co-payments and deductibles climb by 40 percent. The monetary value of employer-based health benefits declined from 2004 to 2007 as American families were required to spend more of their own money.
  • Health insurers have resorted to saving money by limiting benefits, using maneuvers such as imposing sharply higher co-payments on expensive drugs needed to treat life-saving diseases.
  • In bankruptcy courts, 62 percent of filers said medical bills contributed to their debts in 2007.
  • About 45 percent of Americans say they are “very” worried about having to spend more on health insurance premiums and medical costs.
  • Enrollment in low-premium, high-deductible health insurance products known as “consumer-directed health plans” rose to 8 million as more companies herded workers into the coverage whether they wanted it or not.