Study: If health reform fails out-of-pocket spending for Washington families will soar

If Congress fails to overhaul the U.S. healthcare system, residents of Washington state could see their annual out-of-pocket healthcare spending rise 75.5 percent over the next decade, according to a worst-case scenario in a new report.

And even in the report’s best-case scenario, individual and family spending for healthcare in Washington state will rise more than 50 percent by 2019.

Color indicates the percent increase in individual and family spending on health care from now to 2019.

The report was conducted by researchers at the Urban Institute, a nonpartisan economic policy and social policy research group based in Washington, D.C.

The report, which was commissioned by the Robert Wood Johnson Foundation, used a simulation model to predict how healthcare coverage and costs would change over the next ten years if Congress did not enact major healthcare reform that controlled the rise in the cost of healthcare.

If nothing is done the rising cost of healthcare will hit middle-class families hardest, said Dr. Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, releasing the report.

“Now is the time to act, because delaying reform makes the problem worse,” Dr. Lavizzo-Mourey said.

The consequences of inaction would be felt by all: “Democrats, Republicans and Independents alike,” Dr. Lavizzo-Mourey said. “The only ‘universal’ thing to come from inaction would be the pain.”

The model considered three scenarios:

• Worst case: which assumes slow growth in personal incomes and high growth rates for healthcare costs.
• Intermediate case: which assumes faster growth in incomes but a lower growth rate for healthcare costs
• Best case: full employment, faster income growth and even lower growth in health costs.

In the worst-case scenario, 29 states would see the number of people without insurance increase by 30 percent with the number of uninsured climbing to 65.7 million nationwide.

Businesses in 27 states would see their premiums more than double in the worst-case scenario, and even in the best-case scenario businesses in 46 states would see their premiums rise more than 60 percent.

And the amount of uncompensated care given to those unable to pay would more than double in 45 states in the worst-case scenario and even in the best-case scenario would increase more than 50 percent in 48 states.

In Washington state, the percentage of non-elderly people—that is, people not eligible for Medicare—covered by insurance they get through their jobs would drop from 59.2 percent today to 53.2 percent by 2019 in the worst-case scenario but to only 57.9 percent in the best-case scenario.

In the worst-case scenario, the percentage of the non-elderly population in the state without insurance would rise from 14.1 percent today to 17.1 percent in 2019. In the best-case scenario the percentage of uninsured still rises but only to 15.0 percent.

The state’s spending on Medicaid and the Children’s Health Insurance Program (CHIP) would rise 123.6 percent in the worst-case scenario, but even in the best-case scenario spending on these programs rises 51.6 percent.

The report concludes “that without significant reform that makes health insurance more accessible and affordable and reduces the rate of health care costs growth over time, the number of uninsured will increase and health care spending will increase dramatically…. While enacting health reform will be difficult and expensive, the cost of failure is substantial and will be felt in every state.”

To learn more:

• Read the full report available on the Robert Wood Johnson Foundation Web site.

Tags: Health Insurance, Health-care Reform, Robert Wood Johnson Foundation, Urban Institute

Category: Health Insurance, Healthcare Reform