August 20, 2009, New York, NY— Nationally, family premiums for employer-sponsored health insurance increased 119 percent between 1999 and 2008, and could increase another 94 percent to an average $23,842 per family by 2020 if cost growth continues on its current course, according to a new Commonwealth Fund report.
The report, Paying the Price: How Health Insurance Premiums Are Eating Up Middle Class Incomes, State Health Insurance Premium Trends And The Potential Of National Reforms, finds that national reforms that slow health care cost increases by 1 to 1.5 percent per year would yield substantial savings for families and businesses across the country. By 2020, slowing the annual rate of growth by 1 percent would yield more than $2,500 in reduced premiums for family coverage, and slowing growth by 1.5 percent would yield more than $3,700 in premium savings compared to projected trends.
This is, parenthetically, an argument against letting in low skilled immigrants. Our basic standard of medical care is so incredibly expensive that any immigrant incapable of earning $100k per year is probably going to be a tax burden on the rest of us.
Obviously companies, families, and individuals are going to increasingly be unable to afford these rising costs. What will they do? The overwhelming majority will demand more medical spending by government. If Obamacare is defeated this year that does not mean the battle over a bigger government role is over.
A recent study by Evergreen Re was completed in conjunction with Ingenix/Reden & Anders, Minneapolis. The study found that the frequency of members with paid claims greater than $1 million per 100,000 commercial members rose from 0.07 in the year 2000 to 1.1 in 2005, and will increase to 2.4 (low trend) and possibly 3.6 (high trend) by 2010.
The four largest sources of $1 million plus claims are premature babies/infants, organ transplants, cardiovascular disease, specialty drug therapies and cancer treatment.
For example, the number of organ transplants has doubled in the past 10 years. There are more than 100,000 Americans on the organ transplant list and approximately 25,000 solid organ transplants are performed every year. The average billed charges for a multiple organ transplant now approaches $775,000. In addition, bone marrow transplants, now used to treat some 70 different diseases, increasingly cost more than $500,000.
Who is going to tell people they can't have extremely expensive treatments?
What I'd like to know: What is the rate of treatment with organ transplants per million people per year in the US versus Canada, Britain, France, Germany? Similarly, how hard do other countries try to keep premature babies alive? I suspect a lot of the differences in health care costs between the US and other Western countries has to do with the costs-be-damned extremes we go to.
|Share |||By Randall Parker at 2009 August 23 10:46 AM Economics Health|