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Cost of doing nothing

Posted by: Julia Eisman on Nov 17, 2008

Sometimes, doing nothing can cost you. Such is the conclusion of the New America Foundation's new report, The Cost of Doing Nothing, which addresses the economic threat of rising health care costs:

Our economy loses hundreds of billions of dollars every year because of the diminished health and shorter lifespan of the uninsured. Rising health care costs undermine the ability of U.S. firms to compete internationally, threaten the stability of American jobs, and place increasing strain on local, state, and federal budgets. As health care costs continue to rise faster than wages, health insurance becomes more and more unaffordable for more and more American families every day.

Yet, the recent financial services meltdown has led some people to suggest that we cannot afford health reform and that fixing our broken health care system will have to wait once again. But waiting comes with a price. The crisis worsens every day that we do not act.

What's more:

The economic cost of failing to fix our broken health care system is greater than the upfront expense of comprehensive health reform.

By projecting out future health care costs based on historical trends, the authors make the point that households will spend a greater share of their income to purchase health insurance, while also facing rising deductibles, and wages that can't keep pace. If family coverage through employers continues to rise at a rate of 7.9%, the projected cost will rise to $24,291 by 2016 - nearly double what it is today.  (Check out their website for state-by-state analysis in the form of colorful charts and graphs.)

The cost of doing nothing also hits our nation's ability to compete in a global economy. As more individuals become underinsured and uninsured, their productivity level declines and their contribution to our economy also decreases. In 2007, the economy lost as much as $200 billion due to shorter lifespans and poor health of the uninsured.

This analysis comes out at a critical time when the opportunity for health care reform is more promising than it has been in the last 15 years. Key members of Congress are poised to take action, and some new members even cite the promise of reform as key to getting elected.