4:48 PM Eastern - Tuesday, February 24, 2009

Cost of Doing Nothing: California

We cannot get our economy back on track without repairing the American health care system. Health care reform is not just a moral imperative, but also an economic necessity. In 2007, the U.S. economy lost as much as $207 billion as a result of the poor health and shorter lifespan of the uninsured.

Skyrocketing health care costs add to families' already overwhelming burden, threatening their health and financial security. We can do better. Solving America's health care crisis will improve quality of care, reduce costs and make businesses more competitive.

The urgent need for reform is more apparent now in California than ever. In the past eight years, health care premiums for family coverage have risen 5 times faster than wages. 9.3% unemployed, many families are at risk of losing their health coverage. The message is clear: California's families urgently need Congress to take direct action on health care reform.

Supporting Facts

  • Health Insurance premiums in California increased by 95.8% from 2000 to 2007, while median earnings only increased a mere 19.3%. The median yearly wage in 2007 for California was only $30,702, but the average health care premium for a family was $12,194. This means that premiums grew 5.0 times faster than wages.

  • In California, approximately 6,555,000 non-elderly people spent more than 10% of their pre-tax family income on health care costs in 2008. 77.25% of those people have insurance, but are underinsured. 5,064,000 Californians with insurance spent more than 10% of their pre-tax income on health care costs, and 1,321,000 spend more than 25% of their income.

  • By 2016, projections show that California families will have to pay close to $25,500 for health care or over 41 percent of median household income. This would represent a 90.3 percent increase over 2008 levels.

  • In addition, more and more Californians have been forced into the exorbitantly expensive individual market, as unemployment reaches massive heights. As of December 2008, 1,731,800 California residents were unemployed. That reflects a loss of over 652,000 jobs statewide last year alone, increasing the state unemployment rate by over 3 percentage points.

  • If the state keeps losing jobs at the rate it did last year, 2,778,504 people in California will be unemployed by 2010. 48.35% of insured Californians depend on their employers for their health insurance. If nothing is done to stem the economic downturn and reform our health care system, 506,110 California workers will lose their current health coverage.

  • While 209,349 people will likely enroll in COBRA, which lets workers who lose their jobs continue their health benefits at their own expense, the high cost of COBRA will force an estimated 296,761 people to enroll in Medicaid, fend for themselves on the private market, or become uninsured.

  • This year California faces a $35.9 billion budget shortfall. As a result, the state has already proposed cuts that will cause more than 429,000 adults to lose health coverage. As of 2007, 19% of all state spending has gone to Medicaid and SCHIP. $35.4 billion went to spending on Medicaid alone.

  • As of 2007 there were already 1,232,218 uninsured children in California, and more than 5,360,938 uninsured adults. 1,780,823 of uninsured adults in California also live below the Federal Poverty Line. California's economy lost as much as $32 billion because of the poor health and shorter lifespan of the uninsured in 2007. That equates $4,900 per uninsured California resident.

  • Of the top 10 employers in the state of California, 1 of them is a Healthcare Provider. According to the US Census, 1,172,614 individuals work in the Heath Care Sector in the state & make an average of $4,320.26 per month, which accounts for $5.06 billion in wages per month.

The health of the American economy cannot improve without addressing the healthcare crisis. Building on the existing healthcare system, quality, affordable healthcare can be guaranteed to every American. It's the reform truly needed to rebuild California's economy.

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