It will be just like getting a complex diagnosis from the doctor: As President Obama and other political leaders intensify their battle over healthcare reform, they're going to bombard bewildered Americans with jargon about insurance exchanges, play-or-pay rules, and various formulas for tax credits, penalty fees, and income eligibility.
Anybody who’s ever filled out an insurance claim knows how complicated the healthcare system is. The reforms Obama is pushing will make it more so, at least for awhile. But there’s one fundamental problem that’s easy to understand: cost. The price of healthcare is rising faster than just about anything else in our economy, placing an unsustainable burden on individuals, companies, and even the federal government. That’s the main reason one-sixth of the American population—about 50 million people—don’t have health insurance. And when they seek care, it tends to be the most expensive kind—at the emergency room—which raises costs for everybody else even more.
[See what Obama must do before Stimulus II.]
Congressional Democrats’ first draft of a reform plan illustrates the cost problem: The plan would extend coverage to about 37 million uninsured Americans—but cost more than $1 trillion over 10 years. That scheme has landed with a thud, so newer versions of the plan will probably emerge, with a lower price tag. Still, the major battle over coming months will be over who pays for the healthcare we consume. Here are some stats that flesh out the problem:
Total U.S. healthcare spending: $2.1 trillion
Projected annual increase in spending through 2017: 7 percent
Projected overall inflation rate: 1.2 percent (through 2015)
Healthcare spending as a percentage of all economic activity: 16.3 percent
Projected in 2017: 19.5 percent
[See 6 small steps toward a more normal economy.]
Percentage of Americans covered by employer-provided plans: 61 percent
By government plans: 16 percent
By private plans: 5 percent
Uninsured: 17 percent (about 50 million Americans)
Percentage of large firms offering health coverage: 99 percent
Percentage of small firms: 59 percent (down from 68 percent in 2000)
Industries with the highest health coverage rates: government, manufacturing, transportation, communication, utilities
Industries with the lowest coverage rates: retail, service, health care
Percentage of uninsured who live in a household where nobody works: 19 percent
Who live in a household with only a part-time worker: 12 percent
Who live in a household with one or more full-time workers: 69 percent
[See 11 places with a worse economy than ours.]
Average amount of personal income spent on health care: 6 percent
On housing: 39 percent
On transportation: 20 percent
On food: 14 percent
On clothing: 4 percent
Healthcare spending as a percentage of income, for those earning less than $20,000 per year: 15.5 percent
For those earning between $55,000 and $70,000: 5.1 percent
For those earning more than $70,000: 3 percent
Average increase in employer-based health insurance premiums since 1999: 120 percent
Average increase in wages since then: 29 percent
Proportion of personal bankruptcies related to illness or medical bills: 62.1 percent
Increase since 2001 in the proportion of personal bankruptcies caused by medical problems: 50 percent.
Sources: Randcompare.org; Congressional Budget Office; American Enterprise Institute; Urban Institute; National Coalition on Health Care; Kaiser Family Foundation; American Journal of Medicine
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