The Links Between Health Care, the Economy, and Foreclosures

By Ken Jacobs
Chair, Center for Labor Research and Education
UC Berkeley

During the first presidential debate, moderator Jim Lehrer pushed both candidates to say how the current economic crisis might affect their various program proposals. But there's one program proposal that can't be frozen or even delayed. That's health care reform, because the health care crisis is contributing significantly to our economic woes.

The health care crisis affects every aspect of our economy – from our lack of global competitiveness to the financial shambles of our states and localities, to the spike in foreclosures.

High health care costs hurt the competitiveness of firms in the United States, which spend more than twice the average per capita on health care than other industrialized nations.

At the same time, we have the highest rate of people without health care coverage, which in turn hurts the productivity of U.S. firms. Workers without health insurance are more likely to skip and delay needed care, are less likely to receive treatment for chronic conditions like asthma and diabetes, and are more likely to experience a debilitating health condition.
As a result, there is increased absenteeism and exits from the labor force due to disability, with resulting decreases in productivity and earnings.

Additionally, many American workers are unwilling to leave their jobs for fear of losing their health insurance. That translates into fewer people becoming entrepreneurs and fewer people pursuing productivity-improving job changes.

There are already 47 million Americans who don't have any health care coverage.

Another 25 million are underinsured, meaning their insurance doesn't adequately protect them against catastrophic health care expenses. The share of workers with coverage on the job has been declining steadily for the last decade, and for those who are insured, costs are going up while coverage is going down.

Meanwhile, as unemployment increases, so does the number of people with no health insurance. The Kaiser Commission on Medicaid and the Uninsured found that a one-percentage-point rise in unemployment nationally results in 1.1 million more uninsured and 1 million more enrollees in Medicaid and the State Children's Health Insurance Program. The U.S. unemployment rate is already up 1.2 percentage points since January.

Comments

Posted by: Chris at October 28, 2008 03:59 PM

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