Even with health care reform, it may take awhile to see savings : sarah tribble
By: Health Insurance
Submitted: 2009-08-21 17:47:55 | Word Count: 593
Will health reform lower my insurance costs?
No. Even the best-case analysis of the House of Representatives' proposed bill, H.R. 3200, predicts that over the next decade premiums will continue to escalate to levels that are difficult for the middle class to pay.
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The average American household has watched the amount it spends on health care rise faster than the amount they earn annually for years, according to the nonpartisan Commonwealth Fund.
Spending on health care in the United States has been growing faster than the economy for many years, says the Congressional Budget Office.
The average annual premium for a family policy in 2008 was $12,680, with those costs being split by the employer and employee, according to the nonpartisan Kaiser Family Foundation. While health insurance premiums are largely covered by employers, as costs rise, companies are shifting more of the burden to employees.
A Commonwealth Fund study released today predicts that with health reform, insurance premiums for the average American family -- again with those costs being split among the employee and employer -- would be $20,083 annually in 2010. Without reform, the study says premiums would rise $3,759 to $23,842 annually.
The study showed that Ohioans fare better than the national average. Ohio ranks 40th among the states for lowest premium health insurance costs.
Thus, the average family in Ohio could see premiums increase to $18,657 annually under proposed reforms, which is a $3,492 savings compared to the price if the health care system isn't overhauled, according to the study.
"It brings it home," said Karen Davis, president of the Commonwealth Fund. "There's been a focus on costs to the federal budget or costs to the Medicare program but not really on how we solve this problem for working families."
So when President Barack Obama and others say they plan to lower health care costs, what they are really saying is that their proposals will make the costs lower than it would be without reform.
The poor and lower-middle class will likely save money. If passed, the House bill would immediately expand the number of low-income families eligible for the federal Medicaid program, which provides coverage for the poor. The bill also provides some subsidies to make insurance more affordable for many who lack coverage.
For the rest of the population, it's less clear how the House bill will directly lower insurance premiums.
The White House released a report in June describing how the health system overhaul will cut costs by eliminating inefficiencies, such as spending too much for low-quality care, not giving patients the right kind of care, high overhead costs and medical errors that can lead to worse outcomes.
Joseph Antos, health policy expert at the nonpartisan American Enterprise Institute, said all of those are great ideas but it may take a while to see any savings from them.
"Not for at least the next 10 years," he said.
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