Our healthcare what do we do?

Introduction

Politicians, business executives, labor leaders, none of them seem to get it (or at least want to acknowledge it): Our broken health care system is the 800 pound gorilla sitting on our economy, and every year, the gorilla gains another hundred pounds. Health insurance is a massive piece of overhead cost, killing our competitiveness in the world market. The problem is not only getting worse, it is getting worse at an increasingly rapid rate. This current health care reform bill is good on coverage expansion, but extremely weak on cost control-and that is a very bad news.

We currently pay almost twice as much per capita on health care as any other industrialized nation, and that is with the US only providing insurance for roughly 83% of its citizens. We are rapidly on track to spend three if not four times as much per capita as any of the other first-world nations that we are competing against.

Discussion

In 2009, the average annual cost of an employer-provided insurance policy for a family was $13,375. For the past few years, that amount has been increasing at a rate of about $1,000 per year, and the CBO projects the growth rate will not slow in any significant way.

The CBO predicts that seven years from now (in 2016), even if the Senate bill passes, an average family policy will cost $20,100 a year. That is roughly $7,000 more than it is today.

In the large group market, which is defined here as consisting of employers with more than 50 workers, the legislation would yield an average premium per person that is zero to 3 percent lower in 2016 (relative to current law).

In the large group market, average premiums would be roughly $7,300 for single policies and $20,100 for family policies under the proposal, compared with about $7,400 and $20,300 under current law.

And most of the 0-3% reduction will be simply because the new excise tax on health insurance would result in millions of Americans getting worse insurance plans.

CBO and JCT estimate that, under current law, about 19 percent of employment-based policies would have premiums that exceeded the threshold in 2016. (Because health insurance premiums under current law are projected to increase more rapidly than the threshold, the percentage of policies with premiums under current law that would exceed the threshold would increase over time.) For policies whose premiums remained above the ...