6.3 Million Lost Health Insurance in 2009

Health care spending slowed its rate of growth in 2009. But here's the bad news: the recession had a catastrophic effect on Americans' coverage.

So here's the good news: health care spending slowed its rate of growth in 2009, posting the lowest increase in half a century.

Here's the bad news: this recession revealed a system in deep crisis, failing most Americans, with those failures all coming to a head before the enactment of the Democratic health reform.

• The recession had a catastrophic effect on Americans' coverage: 6.3 million people lost their private insurance in 2009. Only about one-half of those people, 3.5 million, have gained coverage from Medicaid.
• The "government takeover" of healthcare has already happened: governments together provide the majority of all healthcare dollars; the federal government alone provides 27%.
• The crisis in state government finance is reshaping the healthcare system already: In 2009, state spending on Medicaid dropped by almost 10%, while federal spending surged by more than 20%. If costs continue to rise, so will real questions about the shared cost aspect of Medicaid. We'll also be asking: why does the federal government bear the whole cost of covering the elderly but not the non-elderly poor? You have to imagine that an additional dollar of Medicaid spending would buy a lot more social good than an additional dollar of Medicare spending.

My observation:

Under these circumstances, you have to wonder whether the preferred Republican big idea - federally subsidized risk pools - is really such a superior alternative to the Democratic plan for subsidized private insurance. Either way the federal government ends up paying the costs of treating the uninsured and uninsurable sickest - and post 2009, there may for many years be many more such people than expected or imagined back when the risk pool idea first began to circulate.

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