One year ago, Lehman Brothers, the well-known investment bank, collapsed, representing the single largest bankruptcy filing in U.S. history. This singular occurrence heralded a recession, the likes of which had not been seen in the U.S. since the Great Depression. As a result, world economies spiraled out of control. The unemployment level rose quickly, is presently at 9.7%, and is predicted by many economists to exceed 10% by the end of this year. The looming threat of losing jobs is forcing families, individuals and corporations to reevaluate every aspect of their financial situation. One of the target areas — one that certainly is on our nation’s radar — is the provision of and access to health care.

With the climbing anxiety associated with losing one’s job, consumers have reduced their spending. In fact, the U.S. Labor Department recently released statistics that detail the spending cuts made by families and individuals for travel, dining out and apparel during 2008. Conversely, consumer outlays for health care last year rose by more than 4%. It comes as no surprise, therefore, that 8 out of 10 people are concerned about how they will be able to pay the increased costs for their healthcare insurance. Some significant changes that employees are experiencing with their coverage include:

1) an increase in the overall premiums paid directly by employees
2) the addition of or an increase in co-pay amounts
3) the addition or increase in the individual deductibles
4) the elimination of one or more of the types of insurances offered (i.e., life, health, and/or disability.

These issues are an even greater source of anxiety to individuals who have lost their jobs.

The number of people without health insurance has risen dramatically during the recession, leaving an estimated 46.3 million uninsured. More individuals and families are turning to government-supported and subsidized programs as they lose their employer-provided insurance.

Fortunately, the new American Recovery and Reinstatement Act allows individuals who have lost their jobs the ability to receive 65% of their COBRA (Consolidated Omnibus Budget Reconsolidation Act) payments from the government. And while 65% of one’s health care premium insurance (which can easily cost upwards of $14-18,000 per year) is being covered by the government, the additional 35% remains a burden on an individual’s small unemployment insurance income, after taking into consideration other household needs such as food, mortgage and clothing.

Leaders at many of our nation’s healthcare institutions predict that the present economic crisis has increased the burden of illness on our already strained economy. But how has this crisis affected healthcare?

It would be intuitive, for example, to presume there might be fewer people seeking healthcare, especially for elective procedures, due to inability to pay for coverage. Additionally, how are healthcare givers being affected by the crisis? Is the lack of scheduled procedures forcing hospitals to cut back the number of employees, supplies, etc.? Are reimbursements to hospitals and physicians cut to the extent that hospitals are doing fewer of them? This article attempts to explore some of these questions, beginning with a look at two of the largest insurers of our nation’s population – Medicaid and Medicare.

Medicaid