Recently, discussions around health care reform have begun in earnest among politicians and policymakers in Washington, D.C. and beyond. President Obama has spent the month of June hitting the trail and the airwaves making the case for reform, and legislators are now aiming to pass a health care reform bill sometime this summer. With the possibility of comprehensive changes to health care on the horizon, it is important for leaders and policymakers—as well as citizens—to understand the full argument for reforming the health care system in the United States.
Many of the most compelling reasons for health care reform are medical or moral in nature, such as insuring the 46 million Americans without health coverage and expanding access to care. But health care is also an economic issue, and there is a strong case to be made that reforming the system is essential to the long-term recovery of our economy. At a health care reform summit in March, President Obama said that “[i]f we want to create jobs and rebuild our economy and get our federal budget under control, then we have to address the crushing cost of health care…” This is exactly right. Health care is an ever-more-costly-burden that weighs down government, businesses, and workers alike. In the midst of recession, these costs become even more unbearable, greatly hindering all parties’ ability to recover from economic catastrophe—and making health care reform a top priority.
Crippling Government Costs
This year, the United States is projected to spend a whopping $2.5 trillion on health care—about the same amount of money that the federal government has spent on recession-related bail-outs since December 2007. (And this is without taking into account the indirect costs of an ineffective health care system, such as the $207 billion in economic losses that the U.S. suffers every year because of the poor health and shorter lifespan of people without health insurance.) According to the most recent OECD data, health care spending eats up more than 15 percent of the U.S. gross domestic product (GDP), a far greater proportion than in comparable countries around the world.
Such spending patterns are unsustainable. The Congressional Budget Office (CBO) projects that, should health care costs increase at their historical average rate, expenditures on health care would eventually consume a whopping 99 percent of the U.S. GDP. Though this is unlikely to come to pass—practically speaking, our system would collapse before reaching this point—it is still a sobering projection.
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