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Kim Bailey, Families USA Senior Health Policy Analyst

Between 2000 and 2007, family healthcare premiums in Tennessee rose an estimated 5.1 times faster than earnings. These findings were recently released by Families USA, a nonprofit, nonpartisan organization based in Washington, D.C., that advocates for affordable, accessible healthcare for consumers.

This latest information on the widening gap between premiums and paychecks doesn't bode well for any of the stakeholders, particularly as the nation slips deeper into recession.

"Skyrocketing healthcare costs were a problem in Tennessee before the current economic downturn, and slow wage growth or job losses now only make matters worse," said Ron Pollack, executive director of Families USA. "As healthcare becomes less and less affordable, Tennesseans face difficult choices in trying to provide health coverage for themselves and their families. A bad situation is clearly growing worse," he continued.

Those tough choices impact not only workers but employers, as well.

"As premium costs rise, employers are faced with very difficult decisions," said Kim Bailey, senior health policy analyst for Families USA and author of the report. "Small businesses are just being forced out of the market. They simply lack the bargaining power that larger companies have," she noted of a disturbing trend. Even large companies are not immune to the increasing pressures of rate hikes, which are occurring across the board.

Between 2000 and 2007, the percentage of Americans covered by employment-based health insurance dropped from 64.2 percent (2000) to 59.3 percent (2007) … a decline of nearly 5 percent. During that same time period, the number of uninsured Americans rose more than 19 percent from an estimated 38.4 million to 45.7 million.

Findings of the report "Premiums versus Paychecks" were based on data drawn from U.S. federal government sources including the Department of Health and Human Services, the Census Bureau and Department of Labor. An analysis was conducted nationwide with key indicators broken out into individual state reports. (To see the complete report on Tennessee, go to www.familiesusa.org/assets/pdfs/premiums-vs-paychecks-2008/tennessee.pdf)

In Tennessee, annual premiums for family health coverage provided through the workplace rose from $6,550 to $10,606 between 2000 and 2007 –– an increase of 61.9 percent. During that same period, the median earnings of Tennessee's workers increased from $22,863 to $25,639 –– an increase of 12.1 percent.

In the eight years studied for the report, the employer's portion of annual premiums for family coverage rose 58.2 percent from $4,854 to $7,679; while the worker's annual portion jumped 72.5 percent from $1,696 to $2,927. For individual health coverage, employers saw their annual portion of the premium rise 51.5 percent from $2,102 to $3,184. The worker's portion for their individual health coverage increased 69.1 percent from $468 a year to $791.

Compounding the economic concerns for workers is that these cost increases occurred in spite of thinner coverage … fewer benefits and/or higher deductibles and co-pays.

"The findings of this report are probably not shocking to anyone in the industry … or outside," noted Bailey. "Consumers are aware they're paying more for less."

As a result, healthcare costs represent an ever-increasing portion of a family's budget. In fact, Bailey, along with Beth Wikler, released a report last December that underscored this increasing share of the monthly budget. In "Too Great a Burden: America's Families at Risk," Bailey and Wikler stated approximately 50.7 million non-elderly Americans with insurance are in families that will spend more than 10 percent of their pre-tax income on healthcare costs in 2008.

Despite the bad news for the state, it could be worse.

"Tennessee is doing just a touch better than the national average," said Bailey. Nationally, health premiums have risen 5.4 times faster than wages. "The national premium growth between 2000 and 2007 for family coverage through employer-sponsored insurance was 78.3 percent versus 61.9 percent in Tennessee," she added.

Another piece of potential good news for Tennesseans is the increasing number of coverage options and care resources.

Dranda Whaley, executive director of Health Assist Tennessee (HAT), is all too familiar with the growing need for access to care and the establishment of a medical home. Her nonprofit organization helps Tennesseans receive the healthcare they need whether by assisting with sign-ups for TennCare or one of the Cover Tennessee programs or helping in the search for other affordable medical options. The statewide services are available at no charge to consumers who can reach a counselor by calling 1-800-269-4038.

Whaley stressed HAT counselors are familiar with the application processes and requirements for multiple programs and resources, thereby saving callers time and frustration.

"We're really a one-stop shop," she said, "We can help from the very beginning, and we don't pass people from one person to the next."

She noted that counselors walk callers through available public programs, review coverage options through a spouse's employer, look at the possibility of private carriers, and finally … if the consumer doesn't qualify or can't afford any of those options … help them find low-cost healthcare resources in their own community.

One of three finalists for the Center for Nonprofit Management's 2008 Marvin Runyon Leadership Award, HAT has been around for 15 years. However, Whaley said the organization is still building name recognition after spending the first dozen years as the TennCare Consumer Advocacy Program. During that time, the office was a service of the nonprofit Crisis Intervention Center and was funded by the TennCare Bureau. The impetus to strike out as a separate organization and change the name to Health Assist Tennessee came in 2005 when the Crisis Intervention Center merged with another nonprofit, and the state underwent major TennCare reform.

In addition to helping callers statewide navigate the healthcare system, HAT has launched a pilot program at Southern Hills Medical Center in Middle Tennessee that runs through the end of the year. In the evenings, a staff member is available in the hospital's Emergency Department to assist patients that are not truly in an emergency situation.

"We can talk with them and try to determine if they are eligible for TennCare or one of the Cover Tennessee Programs," she said of the effort to help them find a primary care home. "The point of the pilot program is to eliminate that next visit to the ER for non-emergency visits," she stressed.

Based on the success of the pilot and future funding, Whaley is hopeful to expand this type of hands-on case management to East and West Tennessee in the future.

Another service HAT already offered statewide is medical translation. Approximately one-third of Whaley's 67-person staff is bilingual with 141 different languages represented.

"When refugees come to Tennessee, they are entitled to eight months of TennCare," she said. "They have to get help, though, in their own language to know what is available." She added that the clock starts ticking upon arrival so it's important for refugees to get information as soon as possible.

"Getting culturally and linguistically appropriate services is a huge gap," she said, adding her staff offers fee-for-service medical interpreting for various providers with no charge to patients. She added HAT has video conferencing equipment provided by the Community Health Network that expands their reach beyond Middle Tennessee. "We can be sitting in Nashville and interpret for a patient in Memphis or Bristol or wherever they have the equipment," she said.

When asked if they have seen a spike in calls since the economy has worsened, she answered simply … but emphatically … "yes!"

"It's more complicated than ever to try to help people get healthcare coverage, and thank goodness for those clinics that have stepped up to fill that need," she continued of the many community health resources that provide services at low or no cost. "They are doing an amazing job, I think, but they are nonprofits, too. You have to wonder if there are enough resources to go around … particularly right now."

Not only does Whaley worry on behalf of the clients HAT serves, but she also has the added burden of worrying about providing adequate coverage for her own staff.

"As an employer, I know health insurance premiums have gone up," she said, adding the increases HAT has absorbed to maintain coverage for employees and their families has affected the organization's ability to increase staff pay.

It's a situation employers and workers are struggling with across the country. Kim Bailey said the consensus at Families USA is that the idea of finding compromise to affect change is gaining traction among all stakeholders. She added that the recent election reaffirmed the nation's desire to see broad-based healthcare reform as both candidates addressed the issue in their platforms.

"In a perfect world, pooling mechanisms would bring more people into the market and bring premiums down for folks working for smaller businesses," she said, adding that President-elect Barack Obama included some of these elements in his proposed plan.

"Increasingly, I think both employers and employees are becoming aware that something must be done. The findings of this report are illustrative of the great challenge facing employers and families," Bailey concluded. "I think there is optimism that something needs to happen and reports like this illustrate the need for reform to occur in a timely manner."

Tags:

Cover Tennessee, Dranda Whaley, Families USA, Health Assist Tennessee, healthcare premiums, Kim Bailey, TennCare

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