Health Care Premiums Run Amok

The Cost of Doing Nothing About the Health Care Crisis

Download this memo (pdf)

View table showing a comprehensive 10-year review of health care premiums

Health care costs are expected to grow 71 percent over the next decade, which will in turn drive premium increases for health insurance. Unless we take serious steps now to reform our health care system—in particular to reduce the rate of growth in health care costs—health insurance coverage will slip out of reach for even more individuals than the 52 million Americans who today are uninsured.

This analysis shows that without health reform, average family premiums will grow to more than $22,000 by 2019, up from $13,100 today. In some states with higher-than-average premiums, family premiums will exceed $25,000 in 10 years. Of course, a family’s total health care costs will be even higher once co-payments and other out-of-pocket expenses are calculated into the total.

These projections, as alarming as they are, need not come true. We know how to “bend the curve” of growing health care costs, reducing the future costs that will be borne by American families, businesses, and government budgets. In fact, we can save more than $2 trillion over the next 10 years by promoting cost-saving innovations and reducing waste and inefficiencies. We can significantly reduce health care spending over the long term through a combination of increased research into which treatments work and which do not, improved payment systems that reward efficient and effective care, and the infrastructure we need to enable these elements to work together.

Methodology

The actuaries at the Centers for Medicare and Medicaid Services forecast that per capita medical costs are expected to increase 71 percent over the next decade. With average family premiums currently a bit over $13,000, the expected cost of a family policy would be over $22,000 in 2019. These projections apply expected growth to average premiums in each state, and demonstrate how these projected premiums vary across the country, assuming that current differences across states remain in place.

View table showing a comprehensive 10-year review of health care premiums

Download this memo (pdf)