COVERAGE: Making the Call for Health Reform
If home shopping networks sold health care safety net coverage, they'd probably be telling you to "act now because supplies are limited." State legislatures are especially receptive to this pitch during an economic downturn. Many are struggling to handle growing Medicaid programs during a period of shrinking tax revenue.
We've written about this vicious cycle before, and a new report from the Kaiser Family Foundation provides more insight into why we cannot afford to ignore our struggling health care system any longer, especially in times of economic turmoil. Quick highlights showing the link between health care and the economy:
- Rising unemployment increases the number of people who must rely on states for health coverage. (See chart below). A one percent increase in unemployment causes enrollment in Medicaid and SCHIP to increase by one million at a cost of $3.4 billion in increased federal and state spending.
- Rising unemployment reduces state revenues used to pay for health coverage. The same one percent increase in the nation's unemployment rate is associated with a three to four percent decrease in state revenues. Historically, this mismatch in growth rates has resulted in cuts to Medicaid & SCHIP as states try to balance their budgets.
- State budgets may not rebound quickly—making health reform even more important to the future stability of our economy. States rely on tax revenues to fund programs like Medicaid and SCHIP. In 2008, 20 states saw revenues fall below their expectations. In 2009, 30 states and the District of Columbia are already projecting mid-year budget shortfalls totaling at least $48 billion.
State legislatures aren't the only ones feeling the heat. This economic crisis brings home the costs of doing nothing in health care for all Americans. From state budgets to family tables, Americans across the country are being forced to make tough choices about basic necessities. Our country must make the call for health reform because it is one they can't afford not to make.


