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How much longer will we pay so much for healthcare?

October 2, 2010

According to the Milliman Medical Index, the average health insurance premium for employees choosing a PPO family plan was $15,069 in 2010. The employers contributed $10,744 and the employees $4,325. Add in the out-of-pocket expenses for employees, $3,005, and that brings the total annual family healthcare bill to $18,074.

This total represents a nearly 8% increase over 2009 and continues a pattern of annual increases since 2001 of about 8% per year, which was much higher than the general inflation rate of 2-3% per year. This discrepancy between the healthcare and general inflation rates has continued unabated for 50 years.

How much longer will America pay so much for healthcare? Many observers have concluded the recent reform legislation will make little impact on the overall cost of healthcare. In fact, it only promises to weakly “bend the cost curve” at some ill-defined point years from now.

Neither political party has any proposals that will make a serious impact in the cost of healthcare. The result is the damaging effect of expensive healthcare on jobs and government budgets show no sign of going away. It doesn’t have to be this way.

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