Health Care Costs Target Infinite
The facts below are from the National Coalition On Health Care, and they point to the fact that the cost of health care are rising so fast that we are going to need to invent new calculators to figure it out in just a few years. Currently health care costs are 17% of the GDP, that means if you make $100 you are inevitably spending $17 on health insurance and secondary health care costs. Once the baby boomers retire that cost is going to come closer to 25%. I have news for you America, there is no legislation that can be passed, no spending cap, nothing can be done to stop this. Well, I take that back we can stop it of course but I am certain that we won’t. If we had any fiscal disclipline we would have confronted this recession right now. Instead we have tried to spend our way out of it, this will work though in the short term. Just like Greenspan’s interest rate games stopped us from feeling the brunt of the dot.com bust, this government spending free for all will spare us the worst of this recession.
But that doesn’t mean the problem has gone away. It just means that we had enough leverage left to push it off a for a few years, but when it comes back it will be very painful. The fact is, is that no more interest rate changes effect the economy anymore, Paul Krugman has pointed this out and boy is it ever true. Used to be the over night fed funds rate was kept at 0% money would flow down to the people that needed it for capital investments etc. Now, this not occurring, banks are hoarding this money because most of them are fundamentally unsound or bankrupt themselves. A few accounting tricks have hidden this from us, but if you want proof just go over to seeking Alpha and listen to actual economists, not cheerleaders and you will get the god’s honest truth. I would recommend Peter Schiff, but I don’t want to scare you. He scared me though alright, I haven’t slept for months! Go ahead and google Schiff or go over to his page at seeking Alpha.
The National Coalition
on Health Care
1120 G Street, NW,
Washington, DC 20005
Health Insurance Costs
Facts on the Cost of Health Insurance and Health Care
Health care spending continues to rise at a rapid rate forcing businesses to cut back on health insurance coverage and forcing many families to cut back on basic necessities such as food and electricity and, in some cases, shelters and homes.
Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management and inappropriate care, waste and fraud. These problems increase the cost of medical care associated with government health programs like Medicare and Medicaid, and health insurance for employers and workers and affect the security of families.
National Health Care Spending
* National health spending is expected to reach $2.5 trillion in 2009, accounting for 17.6 percent of the gross domestic product (GDP). By 2018, national health care expenditures are expected to reach $4.4 trillion—more than double 2007 spending.1
* National health expenditures are expected to increase faster than the growth in GDP: between 2008 and 2018, the average increase in national health expenditures is expected to be 6.2 percent per year, while the GDP is expected to increase only 4.1 percent per year. 1
* In just three years, the Medicare and Medicaid programs will account for 50 percent of all national health spending. 1
* Medicare’s Hospital Insurance (HI) Trust Fund is expected to pay out more in hospital benefits and other expenditures this year than it receives in taxes and other dedicated revenues. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that will grow substantially faster than the economy and beneficiary incomes over time. 2
* According to one study, of the $2.1 trillion the U.S. spent on health care in 2006, nearly $650 billion was above what we would expect to spend based on the level of U.S. wealth versus other nations. These additional costs are attributable to $436 billion outpatient care and another $186 billion of spending related to high administrative costs. 3
Employer and Employee Health Insurance Costs
Over the last decade, employer-sponsored health insurance premiums have increased 119 percent. 4
Employees have seen their share of job-based coverage increase at nearly the same rate during this period jumping from $1,543 to $3,354.4
The cumulative increase in employer-sponsored health insurance premiums have raised at four times the rate of inflation and wage increases during last decade. This increase has made it much more difficult for businesses to continue to provide coverage to their employees and for those workers to afford coverage themselves.4
* The average employer-sponsored premium for a family of four costs close to $13,000 a year, and the employee foots about 30 percent of this cost.4 Health insurance costs are the fastest growing expense for employers. Employer health insurance costs overtook profits in 2008, and the gap grows steadily. 5
* Total health insurance costs for employers could reach nearly $850 billion by 2019. Individual and family spending will jump considerably from $326 billion in 2009 to $550 billion in 2019.6
* The Congressional Budget Office has estimated that job-based health insurance could increase 100 percent over the next decade.7 Employer-based family insurance costs for a family of four will reach nearly $25,000 per year by 2018 absent health care reform.7
The Impact of Rising Health Care Costs
* Economists have found that rising health care costs correlate with significant drops in health insurance coverage, and national surveys also show that the primary reason people are uninsured is due to the high and escalating cost of health insurance coverage.8
* A recent study found that 62 percent of all bankruptcies filed in 2007 were linked to medical expenses. Of those who filed for bankruptcy, nearly 80 percent had health insurance.9
* According to another published article, about 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs.10
* Without health care reform, small businesses will pay nearly $2.4 trillion dollars over the next ten years in health care costs for their workers, 178,000 small business jobs will be lost by 2018 as a result of health care costs, $834 billion in small business wages will be lost due to high health care costs over the next ten years, small businesses will lose $52.1 billion in profits to high health care costs and 1.6 million small business workers will suffer “job lock“— roughly one in 16 people currently insured by their employers.11
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