Connell Alarmed by Pending Fiscal Impact of California's 7.3 Million Uninsured
Residents
LOS ANGELES, March 1 /PRNewswire/ -- State Controller Kathleen Connell
today released her quarterly economic update raising concern that the
percentage of Californians without health care coverage continues to rise
despite a booming and expanding economy. The report addresses the fiscal
burden that an aging, uninsured and unhealthy population group may have on
California's economy in the future. The report also examines how California's
$63 billion health care industry will adjust to provide quality health care as
the baby boomer generation ages.
"California is in the midst of a health care crisis," said Connell. "One
out of six uninsured people in this country live in California. We cannot
expect to continue our current economic expansion without providing adequate
and comprehensive health care for California's staggering 7.3 million
uninsured residents. In this time of historic financial prosperity, I find it
alarming that only 48% of companies in California offer health insurance to
their employees compared to the national average of 61%. We can only assume
that employer-provided health care will continue to fall as health care costs
continue to rise, and the economy begins to cool."
The report notes that California, compared to the rest of the nation, is
at a disadvantage when it comes to providing health care coverage. In 1998,
California had a significantly higher uninsured rate (24%) than the rest of
the country (17%). The state had the third highest uninsured rate in the
nation, with 40% of Latinos, 23% of African Americans and 22% of Asian
Americans lacking health care coverage. In 1998, only 36% of non-citizens had
employment-based coverage, compared to 63% of U.S.-born citizens.
"The health of our economy is intrinsically connected to the health of our
workforce," said Connell. "It is deeply disturbing to think that in this
period of vibrant economic growth, so many productive and valuable residents
don't have access to affordable health care. More California businesses
should have the resources to provide health insurance. We are witnessing a
stampeding retreat from providing health benefits due to the soaring cost of
health care coverage."
Connell noted that some companies are outsourcing health care coverage to
save costs. Xerox Corporation, for example, recently opted to offer employees
a flat amount of health care dollars to be spent on any program the employee
chooses. "Outsourcing health care forces employees to take a proactive role
in satisfying their health care needs and represents a new paradigm for health
care delivery in the future."
Increased life expectancy and the aging of the baby boom generation, the
largest generation in history, will greatly expand the need and costs for
health care services. California's 9.8 million baby boomers will begin to
turn 65 in 2011, with this trend continuing to 2029. Additionally, the health
care services industry is expected to double its total employment in 20 years
to nearly 2 million workers and will need qualified employees to meet that
demand.
Connell added, "The $63 billion health care sector has become a dominant
component of the state's economy. California spends $8.1 billion a year on
Medi-Cal alone to treat uninsured residents. The changing demographics of
California will mandate the need for more and improved health care delivery
systems, products and technologies between now and 2040."
The Controller's Quarterly, released at a health care symposium sponsored
by Connell and the Healthcare Collaborative at UCLA, also examines
California's projected long-term care need for the next 20 years. There are
currently 3.61 million Californians 65 and older. By 2020, aging boomers will
explode this demographic to 8 million people and this population will shift
from high-earning revenue generators to a dependent population placing huge
financial burdens on the state's long-term care needs. California currently
spends more than $5 billion per year on long-term care coverage. Only
300,000 long-term care policies were purchased in 1998.
To help ease long-term care burdens in the future, Connell partnered with
Assemblywoman Elaine Alquist to sponsor legislation this year, AB 2281, that
would offer tax credits to individuals who purchase long-term care for
themselves, their spouse, and/or dependents.
The Controller's Quarterly is available at http://www.sco.ca.gov
SOURCE California State Office of the Controller
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Related links:
http://www.sco.ca.gov
CONTACT:
Byron Tucker or Susie Wong of the California
State Office of the Controller, 310-342-5678
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