STATE OF THE UNION

Health Care

The American health care system is broken. Skyrocketing costs have placed enormous burdens on families and small businesses. The United States spends approximately $1.7 trillion -- over 15 percent of the nation's economy -- on health care, yet the nation still falls behind on basic health care measures. "Health care costs are seen as the primary threat facing our country's economy," and the Bush administration has only made the situation worse. During President Bush's term, "the number of Americans without health insurance has increased by 6.2 million," now totaling nearly 46 million. Three-in-four Americans, including 62 percent of those who voted for Bush in the last election, feel the Bush administration and Congress have failed to address the growing health care crisis in our country." The American health care system needs fundamental reform to be fixed -- "reform that provides affordable coverage to all Americans, controls costs and makes prevention a national priority." American Progress has progressive solutions for real changes.

46 MILLION UNINSURED AMERICANS: In his 2004 State of the Union address, Bush promised to "extend the benefits of modern medicine throughout our country." But the President has not kept his promise; the "number of Americans without health insurance rose by 800,000 last year, reaching a record high of nearly 46 million." The number of uninsured Americans now exceeds "the cumulative population of 24 states plus the District of Columbia." Unless the nation drastically changes course, approximately 52 million are expected to be uninsured for the entire year in 2010. California leads the nation with the largest number of people without health care (7.1 million people), followed by Texas (5.9 million people).

SKYROCKETING HEALTH CARE COSTS: The number one reason people are uninsured is because health care coverage is too expensive. Medical bills account for half of all personal bankruptcies. Health insurance premiums for workers have increased by 73 percent, while wages have grown by only 15 percent and inflation by 14 percent. Bush's 2004 State of the Union promise to work with Congress to "control those [health care] costs" has run hollow. Between 2001 and 2003, national spending for prescription drugs increased by 14 percent. Employees are increasingly being left to find coverage on their own; nearly half of all small businesses no longer provide health coverage for their workers. Employee contributions for health care have increased 126 percent over the last five years, compared to a 76 percent increase for employers.

PAYING MORE, GETTING LESS: America spends 2.5 times more per capita than the average of other wealthy nations on health care -- who provide health care to all their citizens -- yet the nation still ranks 34th in life expectancy, 41st in infant mortality, and 37th in overall health system performance. Total national health expenditures increased by 7.7 percent in 2003 over 2002, "four times the rate of inflation in 2003." Despite high spending and technological advances, "Americans have lower odds of surviving colorectal cancer and childhood leukemia than Canadians," and the confusing American health care system has resulted in "30 percent of adults in the U.S. -- more than the rate in comparable nations -- have problems with coordination of care." "We are wasting money by paying top dollar for mediocre results. ... We need to move beyond ideology and partisanship and meet our common health care system challenges with commonsense answers to provide affordable quality health care to everyone in this great nation," said American Progress Distinguished Senior Fellow Tom Daschle.

RACIAL AND INCOME INEQUALITIES PERSIST: Racial, ethnic, and socioeconomic disparities still pervade America's health care system. Nationwide, African-Americans continue to have higher death rates from chronic diseases than any other U.S. racial or ethnic group. The infant mortality rate for African-Americans is twice the rate for whites and the life expectancy for African-American males is seven years less than for white males. Among "Medicare beneficiaries, white patients were more likely to receive high-cost procedures than black patients, and the disparity had increased, in some cases and places, between 1992 and 2001." People with lower incomes continue to have worse health. A failure to address these problems "will inevitably keep us in the lesser ranks of nations in terms of health and health care."

ADMINISTRATION HAS NO REMEDY: The Bush administration's "consumer-driven health care" plans -- health savings accounts -- are doing more harm than good by shifting costs from the healthy to the sick, undermining group health insurance, and allowing prices to rise unchecked. "'Consumer-driven' is a nice slogan, but it turns out buying health care isn't at all like buying clothing," said New York Times columnist Paul Krugman. The Bush administration's implementation of its new Medicare prescription drug plan has been an "unmitigated disaster" and Gov. Tim Pawlenty (R-MN) said, "The new federal program is too complicated for many people to understand, and the implementation of the new program by the federal government has been awful." But the Bush administration's policies have been friendly to one group -- drug manufacturers. While many Americans cannot afford coverage at all, drug companies made more profits in 2002 than the other 490 companies in the Fortune 500 combined.