Relief, Restoration and Reform: Economic Upturn Yields Modest and Uneven Health Returns

Originally published by the Center for Studying Health System Change (HSC), 2008.

Economic Upturn Produces Modest and Uneven Health Returns

As the economy recovered from the early 2000s downturn, the health care system experienced relief, restoration, and reform, but the returns were modest and unevenly distributed across communities and populations, according to HSC research. Economic improvement brought some relief to employers who had been struggling with rapidly rising health insurance premiums, as cost growth moderated slightly. It also restored some of the employer-sponsored insurance coverage that had eroded during the recession, as job growth brought more workers back into the employer-based coverage system.

However, the gains were far from uniform. Communities with stronger economic recoveries saw greater improvements in coverage and access, while those still struggling with structural economic changes, particularly areas dependent on manufacturing, continued to face deteriorating health coverage and access. The uninsured population remained large by historical standards even as the economy improved, suggesting that structural factors beyond the business cycle were contributing to coverage erosion. Health care costs, while growing more slowly than during the peak years of 2001-2002, continued to outpace income growth, maintaining the underlying affordability pressures that had driven coverage declines in the first place.

The research documented emerging reform efforts at both the state and national levels, with Massachusetts leading the way through its landmark 2006 health reform law. Other states were exploring their own approaches to expanding coverage, while the federal policy debate was beginning to coalesce around the idea that comprehensive national reform would be needed to address problems that were proving resistant to market-based solutions and incremental state-level efforts.

Sources and Further Reading

Center for Studying Health System Change, "Relief, Restoration and Reform: Economic Upturn Yields Modest and Uneven Health Returns" (2008).