Rising Health Care Costs Drag Down Economic Growth Nearly everyone is feeling the pain of health care costs that are high, and rising. According to a new report from The Commonwealth Fund, between 2003 and 2010, the cost employers paid for family coverage rose 50% to an average of $13,871 a year -- and employees' share of that tab increased 63%. In the process, health care has gobbled up an enormous amount of capital that employers could have used for salary or wage increases, benefits, or hiring new workers.

It's a problem has become pervasive across the nation in a way that it wasn't before. Back in 2003, 13 states had average premiums that were under 14% of their average incomes. Today, that number has dropped to zero. In 2003, only one state had an average annual premium above 20% of average household income.Today, there are 23, home to 62% of the nation's population. And with higher deductibles, those premiums pay for less in terms of financial protection than they did at the start of the decade.

"No matter where you live in the United States, health insurance is expensive," says Cathy Schoen, senior vice president at The Commonwealth Fund, a private foundation that seeks to improve poor people's access to quality health care.

There's not much to stop the speeding train either. In fact, if insurance premiums for employer-sponsored health plans in each state keep growing at the rate they have during the last seven years, by 2020, the average premium could increase to $23,793, a 72% increase, according to The Commonwealth Fund.

Widespread Impact

Hardest hit were New York, Rhode Island, Connecticut, Florida, New Hampshire and the District of Columbia, where the average family premiums were about 25% above the lowest cost states such as Idaho, Arkansas, Hawaii, Montana and Alabama. Employer-based health insurance costs have risen three times faster than wages since the start of the decade.

There are, however, ways to save on health care, both employer-offered and individual plans. And, while the Affordable Care Act is no panacea for the health care system, it is a move in the right direction, says Schoen, who is optimistic about the law's new oversight of private insurance, which has as a goal lowering administrative overhead and returning the excess to customers in rebates, which takes effect next year. Furthermore, states will review premium increases of 10% or more, and other payment reforms could slow the rate of growth by 1% a year or more if reforms spread and private insurers start to deliver better value -- including lower overhead, she says.

The bottom line: Small changes could bring big rewards. Says Schoen, "The savings would be substantial -- $2,000 to $3,000 a year per family that could be redirected to wages or jobs."

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While I was looking for a cheap health insurance my friend told me that there are sites, where people can compare prices from many providers.These sites are the only one way to save money on your insurance, because once you register many companies will make you different offers.The site he suggested me was:


I tried them and I saved more than 30%.Try it.Just register and get free quotes!

January 12 2012 at 3:52 AM Report abuse rate up rate down Reply
Dr. Frank Care

The three things needed to save healthcare in the US:
- transparen­cy of informatio­n (price, services, quality, risks)
- freedom to choose (should be a fundamenta­l right anyway!)
- responsibl­e and ethical behavior of industry players - self control

Dr. Frank Care

December 18 2011 at 9:46 AM Report abuse rate up rate down Reply

The problem is not Obamacare. It is private insurance companies forcing everything to be outpatient procedures. Hospitals have the same costs every year, and they are not non-profit as they like to appear. It cost the same 80 million a year to run hospital X, so they have to shift the costs back to the taxpayers.

20 years ago private insurance paid for most of the costs of hospitals, now it is federal government.
Private insurance companies do not provide any economic benefit to the public, they simply lowball payment and how service is provided, so the taxpayers are footing the cost for them to profit.

November 30 2011 at 9:02 PM Report abuse rate up rate down Reply

You know why $ went up, because the Ins cos dont know what it is going to cost them when reform is finalized, so their stock piling money now for what might happen after reform. I know one way to reduce health care $, make the smokers and overweight pay a lot more $ in premiums as well as drug users, illegals and alcoholics ect. I practice extreme health consciousness, why should I have to pay for all these unheathly people. All i do is pay pay pay and never get to use my ins. Its not fair!!!!

November 29 2011 at 7:53 PM Report abuse -1 rate up rate down Reply

What a waste of "newsprint" - what's the author's point? We all know that Obamacare has taken care of the health care situation, so what's the beef? Let's put the blame for a "sluggish economy" where it belongs - those silly conservatives that think that it's somehow important to stop spending money that isn't there. You go Barrack - fire up the printing presses & send every non-working American (and illegal) a million Obama bucks. It's the Democratic answer to a failing exonomy.

November 29 2011 at 7:10 PM Report abuse rate up rate down Reply

A big part of the problem is that most people with insurance seem to have everything covered and therefore don't care what gets billed by their doctors to the insurance companies. I raised my deductible up to $10,000 which brought my premiums down from $700/month to $200 for an annual savings of $6,000. Therefore, I figure I have ~$6,000/year in my bank to pay out of pocket for my medical expenses, and as someone who visits doctors rarely, I'm way under that, paying maybe $400/year. In the 5 years since I've increased my deductible, I've probably saved ~$25,000.
But because of my high deductible, I shop around when I can before going to a doctor, and everytime I'm amazed and very frustrated at how difficult it can be to get a price estimate from my regular clinic ... the standard lines you call have no clue what it will cost and they transfer you to their billing departments that will get back to you within 24 hours and usually with something incredibly vague like "anywhere from $80-$500", so I go, when possible to Target's drop in clinic where I know what I'm going to end up paying. I'm convinced that this is a huge part of the problem: that most people don't even care what it costs when they go in bc their insurance just pays whatever, and they justifiably feel their insurance owes it to them anyway bc the pay such high premiums. If more people would reduce their deductibles and shop around, when possible, clinics would be forced to start pricing their services more competitively, and outrageous costs for doctors visits, etc. would not get passed so easily to the insurance companies who then pass those costs back to policy holders.
We also need tort reform in the medical industry and as rj2860 mentioned, better ways to manage end of life decisions & associated costs.

November 29 2011 at 6:09 PM Report abuse rate up rate down Reply

rising health care , strained ifastructure, to high of a demand for limited resources , overburdened legal system with to many in jail. schools that dont teach because they have to much burden with student overcrowding , and a high unemployment rate. can anyone see how to turn this around. deport the illegals

November 29 2011 at 6:09 PM Report abuse +1 rate up rate down Reply

god bless the u.s. n ows people geta job and stop collecting wellfare n checks 2months camping out, seems like your loooking hard to work, as for health care its a joke n should b reduced 60percent or just flat out free if you pay taxes and have a job and give back to society god bless the u.s.

November 29 2011 at 6:04 PM Report abuse rate up rate down Reply

god bless the u.s. n ows people geta job and stop collecting wellfare n checks 2months camping out, seems like your loooking hard to work, as for health care its a joke n should b reduced 60percent or just flat out free if you pay taxes and have a job and give back to society god bless the u.s.

November 29 2011 at 6:04 PM Report abuse +1 rate up rate down Reply

Insurance is a business which produces no real utility, in the economic sense. Unlike a farmer, or carpenter, or bartender, or doctor, etc., who provides a commodity or service to meet a human want, the output of an insurance company is an insurance policy. The purpose of the policy is to afford protection "if" something bad happens. For this they charge a premium. The goal of the insurance company is to sell as many policies as possible and to pay out the least amount of money in claims. To diminish the risk of exposure to claims, the insurer will offer deductibles so the policy holder can pay more if something bad happens (that, in addition to the premium). Then the company management can afford their country club dues.
It's an actuarial (numbers) game, which is why insurance companies want healthy people to buy policies and they would like to cancel people with illness.

November 29 2011 at 6:00 PM Report abuse rate up rate down Reply