What If There Is No Healthcare Reform?

If healthcare reform fails, costs will rise to 19.3 percent of the GDP by 2019.  The rationale for healthcare reform is simple – cover most of the population and rein in rising costs.  But what happens if healthcare reform isn’t enacted?  The answer is not good.

“Failure to enact health reform will result in increasing numbers of people without health insurance because fewer employers will offer it and many employees will not be able to pay the cost of plans that are available,” says Stephen Zuckerman, a health economist at the Urban Institute think tank in Washington, D.C.  “For people not offered employer coverage, many will not be able to get coverage due to pre-existing conditions that insurers won’t cover or because premiums won’t be affordable.  Even people with coverage will find costs becoming a greater financial burden.”

The numbers are startling.  Americans paid $2.5 trillion for healthcare in 2009, equal to 17.3 percent of the nation’s GDP.  As the economy starts to grow again, so will healthcare costs.  The federal Centers for Medicare and Medicaid Services (CMS) estimates that without reform, healthcare will rise to 19.3 percent of the GDP by 2019.  According to Urban Institute statistics, if healthcare reform is not enacted, the number of Americans without insurance will climb to 57 million or 20.1 percent of the population – and that is the best-case scenario.

The 16.5 percent of Americans now covered by Medicaid and the Children’s Health Insurance Program will rise to 18.3 percent.  Medicare and Medicaid spending will cost approximately $725 billion in 2010, 50 percent more than Congress appropriates for all other domestic agencies.  By 2014, the cost is projected to be $950 billion.

Inaction will only increase the budget deficit.  Peter Orszag, the White House budget director, warns that “The fiscal course that we’re on, out in 2020 and 2030 and 2040, is unsustainable and needs to be addressed.  If we don’t address rising healthcare costs, there’s nothing else that we’re going to be able to do that will alter that basic fact.”

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