NCPA - National Center for Policy Analysis

WHAT HAPPENS IF NOTHING HAPPENS TO HEALTH CARE?

February 5, 2010

Conversation among Washington wonks, corporate chieftains and health care executives isn't any longer about how "health reform" will work in practice.  It's about what happens if nothing happens, says David Wessel, economics editor for the Wall Street Journal. 

Barring a political miracle, we're going to learn the cost of doing nothing -- nothing significant to restrain health care cost increases, nothing to prod the health care system to produce more benefit for each dollar it takes, nothing to expand health insurance coverage, says Wessel. 

All of us -- employers, workers and taxpayers -- will spend ever more on health care.  The numbers are so large they're hard to grasp, says Wessel: 

  • The U.S. health care tab in 2009 was $2.5 trillion, equal to 17.3 percent of the nation's gross domestic product, the sum of all its output, much bigger than 2008's 16.2 percent because the recession depressed gross domestic product (GDP).
  • The economy will grow again, of course, but health care costs will rise even faster; in a new forecast, the federal Centers for Medicare and Medicaid Services predict that without some big change, health care will amount to 19.3 percent of GDP by 2019. 

Last spring, the Urban Institute ran the do-nothing outcome through its computers and offered three scenarios: 

  • In the best case, the number of uninsured rises to 57 million, or 20.1 percent of the population, from 49.1 million, or 18.4 percent, in 2009, most of them middle-income adults.
  • More employers drop coverage as it grows more costly.
  • The fraction of Americans on the government's Medicaid and Children's Health Insurance Program, now at 16.5 percent, would rise sharply to between 16.5 percent and 18.3 percent -- and that's without the much-derided "public option." 

This year, Medicare and Medicaid will cost nearly $725 billion, about 50 percent more than Congress appropriates for all domestic agencies from the National Park Service to K-12 school aid.  In 2014, the cost is projected at $950 billion.  If nothing changes, employers who still offer health insurance will pay more for it, and will pay lower wages as a result, says Wessel. 

Source: David Wessel, "What Happens If Nothing Happens to Health Care?" Wall Street Journal, February 4, 2010. 

For text:

http://online.wsj.com/article/SB10001424052748703575004575043123039400004.html  

For Urban Institute study:

http://www.urban.org/publications/411887.html 

 

Browse more articles on Health Issues