Chilling Facts on the Contemporary Health Care Costs

July 21, 2009

By Padmini Arhant – Forwarding Facts Presentation by NCHC

As per the thorough, insightful and informative presentation;

FROM: The National Coalition on Health Care – NCHC Cost Fact Sheet 2009 – Thanks

Source: http://www.nchc.org/facts/cost.shtml

FACTS ON HEALTH CARE COSTS:

In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012. Health care spending is projected to reach $4.3 trillion by 2016.

Total health care spending represented 17 percent of the gross domestic product (GDP).

Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens.

Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP.

In 2008, employer health insurance premiums increased by 5.0 percent – two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,700. The annual premium for single coverage averaged over $4,700.

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 significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

Employer and Employee Health Insurance Costs –

Premiums for employer-based health insurance rose by 5.0 percent in 2008. In 2007, small employers saw their premiums, on average, increase 5.5 percent. Firms with less than 24 workers, experienced an increase of 6.8 percent.

The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,700 in 2008. Workers contributed nearly $3,400, or 12 percent more than they did in 2007.2 The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum wage worker ($10,712).

Workers are now paying $1,600 more in premiums annually for family coverage than they did in 1999.

Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period.

Health insurance expenses are the fastest growing cost component for employers. Unless something changes dramatically, health insurance costs will overtake profits by the end of 2008.

According to the Kaiser Family Foundation and the Health Research and Educational Trust, premiums for employer-sponsored health insurance in the United States have been rising four times faster on average than workers’ earnings since 1999.

The average employee contribution to company-provided health insurance has increased more than 120 percent since 2000. Average out-of-pocket costs for deductibles, co-payments for medications, and co-insurance for physician and hospital visits rose 115 percent during the same period.

The percentage of Americans under age 65 whose family-level, out-of-pocket spending for health care, including health insurance, that exceeds $2,000 a year,rose from 37.3 percent in 1996 to 43.1 percent in 2003 – a 16 percent increase.

The Impact of Rising Health Care Costs

National surveys show that the primary reason people are uninsured is the high cost of health insurance coverage.

Economists have found that rising health care costs correlate to drops in health insurance coverage.

A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs.

Retiring elderly couples will need $250,000 in savings just to pay for the most basic medical coverage. Many experts believe that this figure is conservative and that $300,000 may be a more realistic number.

According to a recent report, the United States has $480 billion in excess spending each year in comparison to Western European nations that have universal health insurance coverage. The costs are mainly associated with excess administrative costs and poorer quality of care.

The United States spends six times more per capita on the administration of the health care system than its peer Western European nations.”

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Written by Padmini Arhant · Filed Under Health | Comments Off on Chilling Facts on the Contemporary Health Care Costs