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In the United States, access to health insurance (or more broadly, health coverage) determines access to health care. In the current system, ability to have health insurance determines access to what many experts and consumers consider basic health services such as preventative care, a primary care physician, and timely health interventions to prevent unnecessary suffering or escalation of health problems. A study by the Kaiser Family Foundation showed that individuals without health insurance are more likely to have hospitalizations for avoidable health problems and experience declines in overall health.1 The current US health insurance system is supported by government dollars like insurance systems in many other countries. Unlike in other nationally funded health insurance systems, however, in the American system everyone pays but not everyone is covered.
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to subsidize the health coverage of higher-wage workers who are offered employer-sponsored coverage and can afford to accept it. The self-employed may deduct their health insurance premiums from income tax, but not payroll tax, if they do not have access to an employer-sponsored plan. In addition to the tax subsidy for employer-sponsored coverage and coverage purchased by self-employed workers, the government subsidizes individuals with health care expenses exceeding 7.5 percent of their adjusted gross income by allowing these individuals to deduct their health costs (including premiums) on their tax returns.4 All taxpayers chip in for the health insurance that is provided to state, local and federal employees, from the local county clerk to the President of the United States.
The ESI exclusion is an upside-down subsidy. The largest subsidies go to high-income taxpayers who would be most likely to obtain insurance under almost any system. Those with low incomes get little or nothing. The subsidy for ESI depends on the marginal income tax rate, which increases with income. Taxpayers in the highest income tax bracket (35 percent) save 35 cents in income taxes for every dollar of earnings received in the form of health insurance. The roughly 30 percent of low-income households in the zero tax bracket, in contrast, receive no income tax benet. (They might save payroll taxes, but that is a mixed blessing since their reduced payroll contributions to Social Security produce a commensurate drop in retirement benets.) The result is a system in which households that face the highest premium burden as a share of income receive the smallest subsidy rate. Statement of Leonard E. Burman, Director, Tax Policy Center, Senior Fellow, the Urban Institute, before the House Committee on the Budget Tax Code and Health Insurance Coverage, October 18, 2007.
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These payments are usually counted in the category of employer-sponsored private coverage (government as employer), but they also constitute a form of public, state-sponsored health coverage. Tax dollars go towards purchasing health care for prisonersthe only Americans with a legally dened right to health care. Tax dollars foot the bill for health coverage for military personnel, as well as individuals who qualify for Medicare, Medicaid, SCHIP and other meanstested programs. College students at public universities who are offered subsidized health insurance also receive this benet through state dollars. Thus, individuals who fall into specic categories or meet established eligibility criteria are awarded health coverage that all taxpayers buy. Large government grants go towards nancing research, technology development, and other advances in health care, and access to these tax-funded advances depends on access to health coverage. For example, all taxpayers support breast cancer research, from those in the lowest income bracket to those in the highest income bracket. Yet when new ndings lead to the development of new treatments, only those taxpayers who can afford the new treatments will benet.
Source: The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 2, http://www.kff.org/uninsured/upload/7451-03.pdf
The majority of non-elderly Americans61 percentare covered through their employer. The share of non-elderly Texans with employer-sponsored coverage is lower at 54 percent.8 Of those receiving coverage from an employer, 93 percent live in families with at least one full time worker.11 The majority of individuals receiving coverage from their employers, 84 percent, have incomes at or above the 200 percent Federal Poverty Line (FPL) .12 Of Americans with employer-sponsored coverage, 73 percent are White. Ten percent are Black, 10 percent are Hispanic, and 7 percent are Other race.13 Medicaid is the second-largest source of insurance in America. It primarily covers low income children, pregnant women, welfare recipients and SSI recipients. Medicaid is the primary source of health coverage for the nations low-income population, covering approximately 13 percent of the non-elderly U.S. population in 200615 The vast number of people covered under this public program make it larger than any single health insurer in the nation.18 Medicaid covered one in four children in 2005 (28 million children total), making it the largest source of health insurance for children in the U.S.19 One in nine Texans relied on the Medicaid program for either basic health insurance or long-term services and supports in 2006. Seventy-four percent of Texas Medicaid caseload in 2005 was comprised of individuals below the age of 21, and 64 percent constituted children ages 14 and under.21 Medicaid pays for more than half of all births in Texas. Medicare is the nations third largest source of health coverage. Medicare is the primary form of health coverage for the elderly and permanently disabled. Prior to 1965 roughly half of all seniors lacked medical insurance today, nearly all individuals age 65 and older have health insurance under Medicare.23 Medicare is an entitlement program under Title XVIII of the Social Security Act that provides health insurance to US citizens and legal residents age 65 and over regardless of health
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Most non-elderly Americans who are insured get their health coverage from an employer, either their own or a family members. Most Americans with employersponsored coverage are not classied as poor, and they are mostly White.
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status or income and to individuals under age 65 with permanent disabilities. Depending on data source, approximately 12-14 percent of the total population and 14 percent of the insured population is covered by Medicare.24 In 2007, Medicare provided health care coverage for 44 million Americans,25 of which 37 million were age 65 and over while 7 million were under age 65 with permanent disabilities.26 The trends in rising health care costs and higher Medicare enrollment due to an ageing population have led to projections that Medicare spending will grow faster than the overall economy over the next few years. If these trends continue, Medicare is expected to rise from constituting 3.1 percent of GDP in 2007 to constituting 7.3 percent of GDP in 2035.27 These projections raise further concerns about the nancial security of the Medicare program and have led the debate on health care reform to critically consider the role of programs like Medicare and Medicaid in terms of changing national demographics and an unpredictable economic future.
Endnotes
The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 8, http://www.kff.org/uninsured/upload/7451-03.pdf (accessed Nov. 2, 2007). 2 Ibid, p. 3 3 Statement of Leonard E. Burman, Director, Tax Policy Center, Senior Fellow, the Urban Institute before the House Committee on the Budget Tax Code and Health Insurance Coverage October 18, 2007, http://www.taxpolicycenter.org 4 The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 3, http://www.kff.org/uninsured/upload/7451-03.pdf (accessed Nov. 2, 2007). 5 Health Insurance Coverage of the Total Population, U.S. (2006), Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/comparebar.jsp?ind=125&cat=3 (accessed Dec. 12, 2007). 6 The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 2, http://www.kff.org/uninsured/upload/7451-03.pdf (accessed Nov. 2, 2007). 7 Medicare: a Primer, Kaiser Family Foundation (March 2007): p. 1, http://www.kff.org/medicare/ upload/7615.pdf (accessed Dec. 12, 2007) 8 Kaiser Family Foundation. Texas & the United States: State Medicaid Factsheet. 9 Ibid. 10 Distribution of the Nonelderly with Employer Coverage by Age, US (2006), Statehealthfacts. org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/comparebar. jsp?ind=144&cat=3 (accessed Dec. 12, 2007). 11 Distribution of the Nonelderly with Employer Coverage by Family Work Status, US (2006), Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/ comparebar.jsp?ind=145&cat=3 (accessed Dec. 12, 2007). 12 Distribution of the Nonelderly with Employer Coverage by Federal Poverty Level (FPL), US (2006), Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/ comparebar.jsp?ind=146&cat=3 (accessed Dec. 12, 2007). 13 Distribution of the Nonelderly with Employer Coverage by Race/Ethnicity, US (2006), Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/ comparebar.jsp?ind=148&cat=3 (accessed Dec. 12, 2007). 14 Employer Health Benets 2007 Annual Survey, Kaiser Family Foundation and Health Research and Educational Trust (2007): p. 45. 15 The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 3, http://www.kff.org/uninsured/upload/7451-03.pdf (accessed Nov. 2, 2007). 16 Health Insurance Coverage of the Total Population, U.S. (2006), Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/comparebar.jsp?ind=125&cat=3 (accessed Dec. 12, 2007). 17 Medicaid & SCHIP, Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www. statehealthfacts.org/comparecat.jsp?cat=4 (accessed Dec. 13, 2007). 18 The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 3, http://www.kff.org/uninsured/upload/7451-03.pdf (accessed Nov. 2, 2007). 19 Medicaid: a Primer, Kaiser Family Foundation (March 2007): p. 6, http://www.kff.org/ medicaid/7334-02.cfm (accessed Dec. 12, 2007). 20 Texas Medicaid in Perspective (Chapter 1), Texas Medicaid in Perspective (Texas Health and Human Services Commission, January 2007): p. 1, http://www.hhsc.state.tx.us/medicaid/ reports/PB6/PDF/Chapter01.pdf (accessed Dec. 12, 2007). 21 Clients and Benets (Chapter 4), Texas Medicaid in Perspective (Texas Health and Human Services Commission, January 2007): p. 8, http://www.hhsc.state.tx.us/medicaid/reports/PB6/ PDF/Chapter04.pdf (accessed Dec. 12, 2007). 22 Medicaid Coverage Rates for the Nonelderly by Age, states (2005-2006), Statehealthfacts. org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/comparebar. jsp?ind=159&cat=3 (accessed Dec. 14, 2007). 23 Medicare: a Primer, Kaiser Family Foundation (March 2007): Introduction, http://www.kff. org/medicare/upload/7615.pdf (accessed Dec. 12, 2007) 24 12 percent of total population and 14 percent of the insured population statistic based on CPS data: Health Insurance Coverage of the Total Population, U.S. (2006), Statehealthfacts. org (Kaiser Family Foundation, 2007), http://www.statehealthfacts.org/comparebar. jsp?ind=125&cat=3 (accessed Dec. 12, 2007). 14 percent of population statistic based on CMS data: Medicare Enrollment as Percent of Total Population, 2005, Statehealthfacts.org (Kaiser Family Foundation, 2007), http://www. statehealthfacts.org/comparemaptable.jsp?ind=291&cat=6 (accessed Dec. 17, 2007) 25 Medicare: a Primer, Kaiser Family Foundation (March 2007): p. 1, http://www.kff.org/ medicare/upload/7615.pdf (accessed Dec. 12, 2007) 26 Ibid. 27 Ibid, p. 15. 28 The Uninsured: A primer, Kaiser Commission on Medicaid and the Uninsured (Oct. 2007): p. 2, http://www.kff.org/uninsured/upload/7451-03.pdf (accessed Nov. 2, 2007). 29 Ibid, p. 4. 30 Ibid. 31 Ibid. 32 Ibid, p.5. 33 Ibid. 34 Ibid. 35 Based on data collected from the Census Bureau, 2005 American Community Data Prole Highlights: Texas; and from Kaiser Family Foundation, Statehealthfacts.org: Texas. 36 Ibid.
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Health Policy in Your Hands is a publication of Texas Impact, a statewide interfaith organization established by Texas religious leaders in 1973 to provide a voice of religious social concern to the Texas Legislature. This and other installments of Health Policy in Your Hands are available online at http://texasimpact.org/healthpolicyguide Publication of Health Policy in Your Hands is supported by Methodist Healthcare Ministries of South Texas. Copyright 2008 Texas Impact/ Texas Impact Education Fund.
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