Failing to Fix U.S. Health Care System More Costly Than Reform

The cost of failing to fix our broken health care system is greater than the price tag of comprehensive health reform, according to a new report and interactive online state guide released today by the Health Policy Program at the New America Foundation.

The New America report entitled, "The Cost of Doing Nothing: Why the Cost of Failing to Fix our Health System is Greater than the Cost of Reform," found that the average cost of a family employer-sponsored health insurance plan will climb to more than $24,000 or over 45 percent of median household income by 2016.  Under this scenario, half of American households would need to spend more than 45 percent of their income in order to secure health insurance for themselves and their families. 

The report also found that the U.S. economy lost as much at $207 billion in 2007 because of the poor health and shorter lifespan of the uninsured.

"When it comes to our health system, the economic and social impact of inaction is high and it will only rise over time," said Len Nichols, Director of the Health Policy Program at the New America Foundation.  "Our economy cannot recover if Americans are spending increasing shares of their income on health insurance alone.  Likewise, rising health care costs are undermining the ability of U.S. firms to compete and threatening good American jobs.  Therefore, we must reform our health system not in spite of our current economic crisis, but rather precisely because of the impact health care has on American workers and businesses."

In addition, the report offers state by state analysis.  This state specific data is also profiled on the Health Policy Program's new website, "The State of State Health."  Visit http://statehealth.newamerica.net to find out how your state is doing, where it is going, and the real cost of doing nothing about our nation's health care crisis.

The Cost of Doing Nothing: Why the Cost of Failing to Fix our Health System is Greater than the Cost of Reform

• The full cost of family employer-sponsored health insurance will be more than $24,000 in 2016.  This means half of American households would need to spend over 45 percent of their income to buy health insurance for themselves and their families. 
• The average deductible will reach nearly $2,700 in 2016 - almost doubling the amount Americans will have to spend before their insurance begins to pay for their medical care.
• The U.S. economy lost more than $207 billion in 2007 because of the poor health and shorter lifespan of the uninsured.  This is over $4,500 per uninsured resident - more than the cost of providing that person quality health coverage. 

In addition to the report, Len Nichols and the New America Foundation offer the following thoughts about the economic case for health reform:

• With everything else that is going on in the economy, American families cannot afford rising health care costs.  Health care costs will continue to rise faster than wages without action, making health insurance more and more unaffordable for more and more American families every day. 
• Rising health care costs undermine the ability of U.S. firms to compete and the stability of good American jobs.  Furthermore, the current economy puts access to health coverage in jeopardy for many American families.  We must find a solution to our health care crisis that guarantees every American quality, affordable health coverage regardless of whether or not their employer offers coverage. (For more information on health care costs and global competitiveness see Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms.)
• The U.S. economy loses hundreds of billions of dollars every year because of the poor health and shorter lifespan of the uninsured.  This is as much as, if not greater than, the price tag of comprehensive reform.
• Rising health care costs are the single largest threat to the financial stability of federal, state, and local governments.  We cannot secure our nation's long-term financial future until we fix our health care system.

For more information visit our blog at www.newhealthdialogue.org or contact Elizabeth Carpenter at carpenter@newamerica.net.

 The Health Policy Program works in Washington, DC and across the nation to advance and protect a bipartisan dialogue about comprehensive health reform.  Specifically, the Program promotes policy solutions that address the weaknesses in our health system related to cost, coverage, and quality. The Health Policy Program publishes the New Health Dialogue Blog, linked here. For more information please visit the Health Policy Program website.

About the New America Foundation
The New America Foundation is a nonprofit, post-partisan public policy institute whose purpose is to bring exceptionally promising new voices and new ideas to the fore of our nation's public discourse. Relying on a venture capital approach, the Foundation invests in outstanding individuals and policy solutions that transcend the conventional political spectrum. Headquartered in our nation's capital, New America also has offices in California and New York. More information is available at www.newamerica.net.

Learn More About: Elizabeth Carpenter, Len Nichols, Sarah Axeen
Related Programs: Health Policy Program
Topics: Health Policy