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Healthcare Costs Could Jump 35% Without Reform Passage

Janice Simmons, for HealthLeaders Media, October 5, 2009

With the Senate Finance Committee's approval of healthcare reform legislation last week, Congress is getting closer to overhauling the American healthcare system. But what could happen if the reform efforts eventually stall and the current system remains in place?

If federal reform efforts are not enacted, the cost of failure would be "substantial"—even when looking at worst case and best case scenarios, according to a new report from the Urban Institute, which was commissioned by the Robert Wood Johnson Foundation (RWJF). The Urban Institute researchers used their Health Insurance Policy Simulation Model to estimate how coverage and cost trends would change between now and 2019 if the health system was not reformed.

"We hear a lot about the political toll of health reform, but the cost of failing to reform our healthcare system will be felt most strongly by our state governments, our communities and . . . our families and neighbors," said RWJF President Risa Lavizzo Mourey, MD, in a statement.

Among the predictions are:

  • In the worst case scenario, the number of uninsured Americans would increase to 57.7 million in 2014 (from the current 47 million) and to 65.7 million in 2019. In the best case, the number of uninsured would grow to 53.1 million in 2014 and 57 million in 2019. (These estimates assume that states would continue to maintain current eligibility levels for public coverage.)
  • Employer spending on premiums would increase from $429.8 billion in 2009 to $885.1 billion in 2019 in the worst case scenario, and $740.6 billion in the best case scenario.
  • Individual and family spending would increase significantly—from $326.4 billion in 2009 to $548.4 billion in 2019 in the worst case scenario and to $476.2 billion in 2019 in the best case.
  • Medicaid and state Children's Health Insurance Program (SCHIP) coverage would increase substantially with enrollment rising from 16.5% of the population in 2009 to 20.3% in 2019 in the worst case scenario (a 13.3% jump in the number covered under public programs). In the best case, enrollment would increase to 18.3% of the population.
  • Medicaid and SCHIP spending for the non elderly would more than double from $251.2 billion in 2009 to $519.7 billion in 2019. In the best case, spending would increase by 60.7% to $403.8 billion.
  • The cost of uncompensated care also would increase as much as 128% in the worst case scenario and by 72% in the best case. Together with the increased spending for Medicaid and SCHIP, this would inevitably mean higher taxes even without reform.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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