Rising Health Care Costs Drag Down Economic Growth
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.
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.
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."