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The Kiplinger Washington Editors
August 29, 2008
 

Russia's Incursion Into
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With limited military, political and economic options available to the U.S. and Europe, the greatest pressure on Russia may come from businesses and investors fleeing increased risks there. This week's Kiplinger Letter looks at what's at stake for both Russia and the U.S. Also, note our Special Issue this week on the 2009 outlook for business costs.
 
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Health Care Debate Is Sure to Heat Up

The latest Census Bureau numbers indicate that even more Americans are going without health care insurance. Policymakers in Washington -- and those who want to be -- are sure to take note.
 
 

America's health care crisis is getting worse, judging by another big jump in the number of uninsured. The U.S. Census Bureau's annual report shows an increase of 2.2 million from 2005 to 2006, putting the latest official figure at 47 million Americans. What's more, most of the 1.3 million adults who became uninsured over the year were employed full time and lost coverage because their employers either dropped the policies or increased employees' share of the costs, making insurance unaffordable.

The erosion is sure to add fuel to a fiery debate about health care reform throughout the long 2008 election campaign season. Presidential candidates are sure to tout the Census numbers as evidence that the current system is broken, using the opportunity to promote their own plans for fixes. Even Republican candidates will harp on the issue, which is ordinarily not a big deal in the GOP primaries. Unless the mortgage meltdown worsens, says Joy Johnson Wilson of the National Conference of State Legislators, "I expect health care will stay the number one domestic issue." The Census numbers are considered "the gold standard that policymakers rely upon" in making health care policy, says Joseph Antos of the American Enterprise Institute.

Proposals will run the gamut, from mandating employer coverage to changing the tax code. But at least some employer groups hope that candidates will put the concentration on promoting wellness. "The real focus should be on the factors that increase the cost of coverage...eight cents of every health care dollar is spent on chronic health care conditions," says Neil Trautwein, vice president of the National Retail Federation.

According to the Census report, fewer than 60% of Americans received health care coverage from their employer in 2006, down 4.5 percentage points from 2000. Most of the decline came from low-wage workers dropping coverage as their employers stepped up the amount employees needed to pay. "Middle-class working families clearly are increasingly at risk for becoming uninsured," says Sara Collins, assistant vice president of the Commonwealth Fund, a nonprofit foundation that studies health care. The pressure that employers are under should be a big concern for policymakers, Collins continues.

The Census report also put a spotlight on another aspect of the health care debate -- insurance coverage for children under 18. For the second year in a row, the share of youths without health insurance increased, this time from 10.9% to 11.7%. "The jump is due to a decline in employer-based coverage," says Kathleen Stoll of Families USA.

The figures are sure to increase pressure on Congress and President Bush to end their standoff on SCHIP, the State Children's Health Insurance Program, which helps low-income kids get health coverage. Congress wants to hike funding by as much as $60 billion over five years, but Bush has threatened to veto the bill, claiming that it's too costly and extends coverage to too many children whose families, he believes, aren't poor enough to justify coverage. The current program expires on Sept. 30. The timing of the Census report is fortuitous, says Drew Altman, president of the Kaiser Family Foundation, noting that it may nudge Congress and the administration to come to agreement.

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