A new report from the Commonwealth Fund, a nonprofit organization championing a more efficient health care system, shows that as the costs of health insurance rise, the number of people with health insurance plummets. The report cites growing tensions within the economy as consumers struggle to cope with higher costs of living and widespread job loss. In 2010, the organization estimated that 29 million people did not have health insurance, a number that had been 16 million seven years before.
Among those losing health insurance coverage are those with jobs. More companies are making cuts to their health care benefits despite reports to the contrary. As medical costs rise, insurers much meet these costs by raising the rates of their policies. Consumers that cannot afford the higher rates must discontinue their policy, which provokes insurers to further raise rates to make up for the loss of revenue. This phenomenon is putting inordinate strain on employers, who would sooner stop offering health insurance benefits than lose money by providing it.
A similar study from the Rand Corporation, a research and analysis firm for the insurance industry, shows that families are paying much more for insurance, making it impossible to afford other things such as higher education or retirement.
Both Rand Corp. and the Commonwealth Fund believe that the Affordable Care Act will serve as a remedy for the crisis as it will enable some 70% of Americans without health insurance to obtain coverage of some kind.
