2003-09-30 -- The Largest Yearly Increase in Uninsured in a Decade.


Thanks from Don McCanne, Physicians for a National Health Program
president.

U.S. Census Bureau September 30, 2003 Health Insurance Coverage: 2002

* An estimated 15.2 percent of the population or 43.6 million people
were without health insurance coverage during the entire year in 2002,
up from 14.6 percent in 2001, an increase of 2.4 million people.

* The number and percentage of people covered by employment-based
health insurance dropped in 2002, from 62.6 percent to 61.3 percent,
driving the overall decrease in health insurance coverage.

* The number and percentage of people covered by government health
insurance programs rose in 2002, from 25.3 percent to 25.7 percent,
largely from an increase in the number and percentage of people
covered by Medicaid (from 11.2 percent to 11.6 percent).

* The proportion of children who were uninsured did not change,
remaining at 11.6 percent of all children, or 8.5 million, in 2002.

* Although Medicaid insured 14.0 million people in poverty, 10.5
million other people in poverty had no health insurance in 2002; the
latter group represented 30.4 percent of the poverty population,
unchanged from 2001.

* Hispanics (67.6 percent) were less likely to be covered by health
insurance than non-Hispanic Whites who reported a single race (89.3
percent), Blacks who reported a single race (79.8 percent), and Asians
who reported a single race (81.6 percent).

* Among the entire population 18 to 64 years old, workers were more
likely to have health insurance (82.0 percent) than nonworkers (74.3
percent). Among those in poverty, workers were less likely to be
covered (52.6 percent) than nonworkers (61.9 percent).

* Compared with 2001, the proportion who had employment-based policies
in their own name decreased from 56.3 percent to 55.2 percent in 2002.

* Young adults (18 to 24 years old) were less likely than other age
groups to have health insurance coverage -- 70.4 percent in 2002,
compared with 82.3 percent of those 25 to 64 and, reflecting
widespread Medicare coverage, 99.2 percent of those 65 and over.

* Spells without health insurance, measured on a monthly basis, tend
to be short in duration -- about three-quarters (74.7 percent) were
over within one year. (But 43.6 million people were without health
insurance coverage during the entire year.)

http://www.census.gov/hhes/hlthins/hlthin02/hlth02asc.html
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New York Times, September 30, 2003



http://www.nytimes.com/2003/09/30/politics/30INSU.html?hp


 Big Increase Seen in People Lacking Health Insurance 2 hours, 1
minute ago

 By ROBERT PEAR
WASHINGTON, Sept. 29 The number of people without health insurance
shot up last year by 2.4 million, the largest increase in a decade,
raising the total to 43.6 million, as health costs soared and many
workers lost coverage provided by employers, the Census Bureau (news -
web sites) reported today.

The increase brought the proportion of people who were uninsured to
15.2 percent, from 14.6 percent in 2001. The figure remained lower
than the recent peak of 16.3 percent in 1998.

A continued erosion of employer-sponsored coverage was the main reason
for the latest increase, the bureau said. Public programs, especially
Medicaid, covered more people and cushioned the loss of
employer-sponsored health insurance but "not enough to offset the
decline in private coverage," the report said.

The proportion of Americans with insurance from employers declined to
61.3 percent, from 62.6 percent in 2001 and 63.6 percent in 2000. The
number of people with employer-sponsored coverage fell last year by
1.3 million, to 175.3 million, even as the total population grew by
3.9 million.

Tommy G. Thompson, the secretary of health and human services (news -
web sites), said the numbers showed that "the nation must do more" to
help the uninsured. Mr. Thompson said, for example, that Congress
should provide tax credits for the purchase of private insurance.

But no action is imminent. Congress is preoccupied with efforts to
help a large, politically potent group that already has insurance, the
elderly, by adding drug benefits to Medicare.

Ronald F. Pollack, executive director of Families USA, a
liberal-leaning consumer group, said: "It's hard to grasp the
magnitude of the number of uninsured. It exceeds the aggregate
population of 24 states."

The number of full-time workers without health insurance rose by
897,000 last year, to 19.9 million. Kate Sullivan, director of health
care policy at the United States Chamber of Commerce (news - web
sites), said the increase was alarming and predicted it would continue
this year.

"Workplace coverage is becoming unaffordable for many employers and
employees," Ms. Sullivan said.

On Friday, the Census Bureau reported that poverty rose in 2002 for
the second consecutive year. The poverty rate generally declines when
the economy expands, but there is no guarantee that the number of
uninsured will also decline.

The number of uninsured increased each year from 1987 to 1998, even
when the economy was booming. Small businesses accounted for many of
the new jobs then, and such businesses are far less likely to provide
insurance.

Health policy experts said the number of uninsured was likely to rise
this year because the job market remains weak and many states have cut
back their Medicaid programs. The unemployment rate was higher in 2002
than in 2001 and has climbed a bit further this year.

Hanns Kuttner, a health policy analyst at the University of Michigan,
said: "Rising rates of unemployment tend to erode health insurance
coverage among adults. But when parents lose jobs, their children are
more likely to be eligible for public programs."

About 8.5 million children were uninsured in 2002. They account for
11.6 percent of all children under 18. Both numbers were virtually the
same as in 2000 and 2001.

Genevieve M. Kenney, an economist at the Urban Institute here, said:
"Programs intended to provide coverage for children are working to
compensate for the economic downturn and catching a lot of kids who
would otherwise be uninsured. But many states, in the midst of a
fiscal crisis, have reduced efforts to locate and enroll children
eligible for Medicaid."

Men are more likely to be uninsured than women. Men accounted for
two-thirds of the increase in the number of uninsured, apparently
because they were more likely to lose employer-sponsored coverage.

The number of uninsured men rose by 1.6 million last year, to 23.3
million, while the number of uninsured women rose by 761,000, to 20.2
million.

The drop in coverage came even though the number of people with health
insurance increased, by 1.5 million last year, to 242.4 million. But
the increase was more than offset by the combined effects of
population growth and the decline in workplace coverage.

The proportion of people without health insurance ranged from 8
percent in Minnesota to 24.1 percent in Texas. The rates for Rhode
Island, Wisconsin and Iowa, which have made sustained efforts to
expand coverage, were similar to the figure in Minnesota.

Texas, facing fiscal problems and unwilling to raise taxes, cut back
Medicaid and its Children's Health Insurance Program this year.

Looking at two-year averages, the Census Bureau said that the
proportion of people without coverage fell in New Mexico but rose in
18 states: Colorado, Idaho, Indiana, Maryland, Michigan, Mississippi,
Missouri, Nevada, New Hampshire, New Jersey, North Carolina, Oregon,
Pennsylvania, Rhode Island, Texas, Vermont, Virginia and Wisconsin.
The changes in the other states were not statistically significant.

People in the South and the West were more likely to be uninsured.
Only 11.7 percent of people in the Middle West were uninsured,
compared with 13 percent in the Northeast, 17.1 percent in the West
and 17.5 percent in the South.

As an entitlement program, Medicaid expands to meet the need in hard
economic times.

Despite the Medicaid program, 10.5 million poor people, or 30.4
percent of those in poverty, had no health insurance last year. This
percentage, double the rate for the total population, did not change
from the prior year. About 24 percent of all uninsured people were
poor.

The proportion of blacks and non-Hispanic whites without health
insurance rose last year, to 20.2 percent and 10.7 percent,
respectively. The figure for Hispanics was much higher, 32.4 percent,
unchanged from the prior year.

Fully one-third of the foreign-born population was uninsured. About 43
percent of noncitizens 8.9 million of the 20.6 million noncitizens and
17.5 percent of naturalized citizens lacked coverage.

Among people living in poverty, 49 percent of those who worked
full-time were uninsured.

But middle-income households accounted for most of the increase in the
number of uninsured. In households with annual incomes of $25,000 to
$74,999, the number of uninsured people rose last year by 1.4 million,
to 21.5 million, and the increase was most noticeable among households
with incomes of $25,000 to $49,999.

At companies with fewer than 25 employees, only 30.8 percent of the
workers had employer-sponsored insurance in their own names last year,
down from 31.3 percent in 2001. The proportion of workers with
insurance also declined at companies with 25 to 99 employees (by 2.4
percentage points, to 54.4 percent) and even at businesses with more
than 1,000 employees (by nine-tenths of a percentage point, to 68.7
percent).

Senator Max Baucus, Democrat of Montana, said he was working with
Senator Charles E. Grassley, Republican of Iowa, on a bill that would
offer tax credits to jobless workers to buy certain types of health
insurance.

"We have long known the problem of the uninsured is serious," Mr.
Baucus said. "This week's data show that it's getting worse."

http://www.nytimes.com/2003/09/30/politics/30INSU.html?hp

Don's Comment: This is what our $1.66 trillion is buying? Puck had it
right: "Lord, what fools these mortals be!"
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Wall Street Journal, Sept 30, 2003




Wal-Mart Cost-Cutting Finds Big Target in Health Benefits
Restrictions, Tough Stance on Basic Claims Keep Its Outlays Below the
U.S. Average

By BERNARD WYSOCKI JR. and ANN ZIMMERMAN  Staff Reporters of THE WALL
STREET JOURNAL

http://online.wsj.com/article/0,,SB106452494523207000,00.html?mod=heal
th%5Fhs%5Fhealth%5Fproviders%5Finsurance


BENTONVILLE, Ark. -- Wal-Mart Stores Inc. is famous for cutting costs
everywhere it can. Today a giant target for the world's biggest
retailer is the health-care costs of its employees.

Wal-Mart makes new hourly workers wait six months to sign up for its
benefits plan and doesn't cover retirees at all. Its deductibles range
as high as $1,000, triple the norm. It refuses to pay for flu shots,
eye exams, child vaccinations, chiropractic services and numerous
other treatments allowed by many other companies. In many cases, it
won't pay for treatment of pre-existing conditions in the first year
of coverage.

The payoff: Last year, average spending on health benefits for each of
the company's roughly 500,000 covered employees was $3,500, almost 40%
less than the average for all U.S. corporations and 30% less than the
rest of the wholesale/retail industry, according to estimates by
Mercer Human Resource Consulting, a unit of Marsh & McLennan Cos.

As the nation's biggest private employer, with a U.S. payroll of 1.16
million, Wal-Mart could carry enormous influence with this approach at
a time when all companies are struggling to contain the soaring cost
of health care. In 2003, some 13% of U.S. employers trimmed health
benefits, while 7% increased them, according to the Kaiser Family
Foundation, a nonprofit research group in Menlo Park, Calif.

It's too soon to say whether Wal-Mart will pioneer a trend toward
less-generous benefits. At the very least, other companies in the
retailing industry, where margins are razor-thin, are watching
Wal-Mart closely.

Soaring health costs "are absolutely an acute issue in the whole
retail industry," says Blaine Bos, a principal at Mercer. "You've got
to benchmark constantly what your competition is doing. And if you are
in this industry, you certainly want to benchmark to Wal-Mart." Many
companies are having employees pick up more of their health-care tab.
Just recently, a top Wal-Mart rival, Minneapolis-based Target Corp.,
reduced health benefits for its part-time employees.

Wal-Mart says part of its philosophy is that the company should pay
for catastrophic health expenses -- cancer treatments, organ
transplants -- that could financially ruin an employee. It typically
pays 100% of medical charges above $1,750 a year in out-of-pocket
expenses; in addition to the deductible and premiums, employees pay
20% of medical costs up to $1,750. And Wal-Mart has no lifetime caps
on coverage -- a benefit offered by just 42% of retailers and 47% of
employers overall, according to Watson Wyatt Worldwide, a
Washington-based consulting firm.

Tom Emerick, benefits vice president, says the company covers medical
bills that exceed $100,000 each on at least 800 employees a year. A
further 20,000 cases a year cost Wal-Mart more than $10,000 each. The
company has paid for more than 300 organ transplants in the past five
years, costing $1 million or more each.

Wal-Mart has been using a team of six people to scour every state for
the lowest-cost networks of doctors and hospitals. In Colorado, for
instance, Wal-Mart has contracted in the past two years with MMA, a
Greenwood Village, Colo., managed-care provider that has a network of
7,000 doctors and 62 affiliated hospitals statewide. MMA calculates
the cost of each medical procedure according to the market rates in 14
different regions in the state. Statewide rates tend to be higher.

Last week, Wal-Mart announced that it has ended its state contracts,
such as that with MMA, in favor of a national contract with Blue Cross
benefit plans to administer its health plan nationally. "The
state-by-state analysis showed us we could save even more money by
shifting to the Blues," says Mr. Emerick, referring to Blue Cross and
Blue Shield.

Wal-Mart executives say shifting routine-care costs to employees keeps
premiums down. The company has raised premiums 50% during the past two
years, but an employee still can join the plan for $13 every two
weeks, well below many employer-sponsored plans. That rate, however,
comes with a high annual deductible of $1,000.

Wal-Mart offers other plans with higher premiums and deductibles as
low as $350. About 90% of retailers and of U.S. employers overall have
deductibles of $310 or less, according to Watson Wyatt. Wal-Mart
employee premiums covered about one-third of the $3,500 spent per
employee on health benefits last year, a share that experts at Segal
Co., a benefits consultant, say is typical for large retailers.

The United Food and Commercial Workers union has made health benefits
the centerpiece of its drive to unionize Wal-Mart's work force. One of
the union's chief complaints is that Wal-Mart's plan discourages
workers from signing up for coverage at all. The union cites, among
other things, the company's six-month waiting period for new hourly
employees, high deductibles, tight coverage restrictions and $50
charge every two weeks to cover spouses who could get insurance
elsewhere.

About 60% of the roughly 800,000 employees eligible for coverage at
Wal-Mart sign up, compared with 72% for the whole retailing industry,
according to a 2003 survey by the Kaiser Family Foundation.

Company executives say they don't try to dissuade employees from
taking coverage. Executives note that some retailers have even-longer
waiting periods and don't offer health insurance to part-timers, who
can join Wal-Mart's plan after two years on the job.

"When General Motors was the biggest company, it raised the bar on
benefits and wages," says Al Zack, an official of the UFCW union in
Washington. "Now Wal-Mart is the biggest, and it has lowered the bar."

"The problem is rising health-care costs," responds Jay Allen,
Wal-Mart's senior vice president for public affairs. "We're grappling
with it like everyone else."

Larry Allen (no relation to the Wal-Mart executive) and his wife,
Jacque, were hired last year by a Las Vegas Wal-Mart as produce clerks
and chose to forgo coverage, in part because they considered it too
costly. They each earned about $8 an hour, so monthly health-care
premiums of $200 would have eaten up more than 10% of their combined
take-home pay.

Mr. Allen also was deterred by the plan's strict rules on pre-existing
conditions. He previously had been treated for a liver disorder and
high blood pressure, neither of which would be covered for at least a
year under Wal-Mart's self-funded plan. Since the mid-1990s, these
clauses have become less common in employer plans and remain in force
for less than a third of new employees in self-funded plans, according
to Kaiser. Such plans, common at most big employers, use corporate
revenue and employee contributions to finance a menu of benefits.

Mr. Allen, 47, soon suffered a stroke and incurred $31,000 in medical
bills. "I'm going to have to pay this debt, but I'm overwhelmed" by
collection agencies, he says. This summer, he left Wal-Mart and took a
job at the UFCW. He's now insured under a plan offered by the new
employer of his wife, who left Wal-Mart last October.

Wal-Mart's benefits sometimes are a godsend. Two years ago, John and
Tina Millwood's son, Simuel, was born with biliary artesia, a liver
disease that required a transplant. Mr. Millwood, whose annual salary
as a store assistant manager is $32,500, estimates that he has paid
about $5,000 a year on health care since his son's birth. The child
received $1.5 million of health care during his first year or so.

Seven months after Simuel was diagnosed and hours after he was placed
on a transplant list, the Mayo Clinic told the Millwoods that a liver
was available. Wal-Mart arranged for a private jet to fly the family
from their East Texas home to Minnesota. Its health plan paid for the
transplant, two months in the hospital, the parents' lodging during
that time, several follow-up trips for additional operations and (for
a year) a $1,000-a-month medicine bill that included costly
anti-rejection drugs. Wal-Mart employees, through contributions to a
special fund, also helped subsidize the family so Mr. Millwood could
take two months off.

"For the rest of his life, Wal-Mart will pay his medical costs,
because there's no lifetime maximum," says Mrs. Millwood, who quit her
$22,000-a-year payroll-clerk job at a gas company to care for her son.
The only thing Wal-Mart doesn't cover anymore is the current tab for
his anti-rejection drug of $8,400 a year, so that's covered by
Medicaid, the state and federally funded health program for the poor.

At the same time, Wal-Mart refuses to budge on items covered by most
employers. Four out of five employees in the U.S. covered by
self-funded health plans get contraceptive-drug benefits. Wal-Mart
employees don't. The policy triggered a lawsuit by a female
customer-service manager in Georgia, which has turned into a
class-action lawsuit in federal court in Atlanta.

The plaintiffs claim that Wal-Mart's policy discriminates against
women, forcing them "to choose between paying their own out-of-pocket
prescription costs or risking unintended pregnancy." Janine Pollack,
one of the plaintiffs' lawyers, says Wal-Mart has 500,000 female
employees of child-bearing age, although only a portion of them are
covered by the company plan. Still, if Wal-Mart loses a class-action
suit, the cost of paying for contraceptives would be "tens of millions
of dollars per year," she says. Wal-Mart executives say they are
worried that giving in on birth-control pills, which cost about $30 a
month, could invite pressure to pay for everything from eyeglasses to
Viagra.

Wal-Mart also refuses to cover obesity surgery, which effectively
reduces the size of the stomach to suppress appetite. About 120,000
Americans are expected to undergo the increasingly popular surgery
this year, up from 80,000 in 2002, according to Frost & Sullivan, a
consulting firm.

Robert Dean, a Tampa, Fla., internist who treats about 200 Wal-Mart
employees, says he has been in frequent futile battles to get Wal-Mart
to approve this and other procedures. He says employer insurance plans
have paid in 29 of the 30 cases where he has recommended the
procedure. The exception: Sherri Parker, who is 42, stands 5-foot-6,
weighs 425 pounds and is the wife of a Wal-Mart night supervisor.

Ms. Parker has sent numerous letters to Wal-Mart and to public
officials, pleading for help in getting the company to pay for her
surgery. In one August 2002 letter, to her Congressman, Ms. Parker
wrote, "The problem has been with me all my life, and is not going
away. I am just getting bigger and bigger." Recently, however, she
concluded that her quest to get Wal-Mart to approve the procedure is
hopeless.

Mr. Emerick, the benefits vice president, says Wal-Mart doesn't cover
obesity surgery because there is no consensus among doctors and
insurers that it's medically safe and effective. He estimates that
between 2,000 and 3,000 employees or family members would apply for
the procedure each year, at perhaps $40,000 apiece. And "there's a
really high rate of complications" that can cost up to $500,000 a
patient, he adds. The company also fears that, with Wal-Mart's annual
turnover rate of about 50%, workers would join the company, undergo
the surgery and leave.

In the past few years, Aetna Inc., Cigna Corp. and other insurers have
begun covering the procedure in cases of morbidly obese patients who
can document failed efforts to lose weight by other means. On the
other hand, United HealthCare, another major insurer, recently dropped
obesity surgery as a covered treatment in its standard plans. United
HealthCare stopped covering the procedure because, a spokesman says,
there isn't enough peer-reviewed medical literature in the U.S. that
the surgery is safe and effective.

Wal-Mart also is aggressive in controlling medical costs related to
on-the-job injuries. The company says these claims are a related and
additional expense on top of the 18% increase in its health-care
outlays last year, a rise in line with industry averages.

Mittie Funderburk, 52, says she injured her back in 2000 while moving
photo-lab merchandise in the San Angelo, Texas, Wal-Mart. She didn't
report the incident until two months later, when growing numbness in
one of her legs immobilized her. Her doctor prescribed surgery, and a
second doctor, selected by Wal-Mart, concurred. Nevertheless, Wal-Mart
fought the claim for months, first alleging Mrs. Funderburk hadn't
reported the accident in a timely fashion and then arguing she didn't
need the surgery.

The company finally relented and she underwent surgery in April 2001,
eight months after being injured, and returned to work that August.
But by January, Mrs. Funderburk says, she was crippled with pain and
went on medical leave. After several epidural pain blocks failed to
work, two doctors advised more-extensive surgery.

Wal-Mart fought even harder, as the Texas State Workers' Compensation
Commission and its Independent Review Board sided with Mrs. Funderburk
three times. But Wal-Mart refused to give up. In May, it appealed the
commission's final decision supporting the need for surgery to the
state district court in Travis County. The case is still pending.

Last June, Wal-Mart terminated Mrs. Funderburk because she had been
off work for more than a year. "My doctor wouldn't release me to go
back to work until I got better, and he didn't think I would get
better without the surgery," Mrs. Funderburk says. Wal-Mart declined
to comment on this or any other specific case.

She applied to have the state of Texas pay for the surgery and
underwent a spinal-fusion procedure in July that cost $30,000. If
Wal-Mart doesn't pay, the state agreed to pay for the surgery and then
pursue Wal-Mart for reimbursement.