Healthcare Message To Congress: The High Cost Of Doing Nothing

If policymakers fail to act to address current trends, the full cost of a typical, employer-based family health insurance plan will rise 84 percent by 2016, which will collapse the employer-based system, a top labor leader told senators.

In his his testimony before the Senate Finance Committee, Andy Stern, the international president of the 2-million member Service Employees International Union (SEIU) emphasized this and other points from a new report titled “The Cost of Doing Nothing: Why the Cost of Failing to Fix our Health System is Greater than the Cost of Reform.”

President-elect Barack Obama and congressional Democrats have put great emphasis on major healthcare reform as a policy objective. Sen. Max Baucus (D-Mont.), who chaired the hearing at which Stern appeared, recently put forward his own healthcare reform goals and proposals.

The New America Foundation report, from the Washington think tank New America Foundation, also shows average rising health care premiums outpacing wage increases and a trend that will result in "Americans will continue to pay more for less-generous health coverage; and fewer employers will offer health insurance to their workers," Stern says.

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,” says 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.”

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 report says.

In addition to the report, 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.

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