In health care, there is no "status quo"

This humble blog spends a lot of time on how much it will cost Democrats if reform fails this Spring, but the media spends far too little time explaining how much failure will cost everyone else.

“Hands off my health care,” goes one strain of populist sentiment.

But what if?

Suppose Congress and President Obama fail to overhaul the system now, or just tinker around the edges, or start over, as the Republicans propose — despite the Democrats’ latest and possibly last big push that began last week at a marathon televised forum in Washington.

Then “my health care” stays the same, right?

Far from it, health policy analysts and economists of nearly every ideological persuasion agree. The unrelenting rise in medical costs is likely to wreak havoc within the system and beyond it, and pretty much everyone will be affected, directly or indirectly.

“People think if we do nothing, we will have what we have now,” said Karen Davis, the president of the Commonwealth Fund, a nonprofit health care research group in New York. “In fact, what we will have is a substantial deterioration in what we have.”

Nearly every mainstream analysis calls for medical costs to continue to climb over the next decade, outpacing the growth in the overall economy and certainly increasing faster than the average paycheck. Those higher costs will translate into higher premiums, which will mean fewer individuals and businesses will be able to afford insurance coverage. More of everyone’s dollar will go to health care, and government programs like Medicare and Medicaid will struggle to find the money to operate.

Well,, that's all very abstract. What's that got to do with me?

“It will break all of our banks if we do nothing,” said Peter V. Lee, who oversees national health policy for the Pacific Business Group on Health, which represents employers that offer coverage to workers. “It is a course that is literally bankrupting the federal government and businesses and individuals across the country.”

Even those families that enjoy generous insurance now are likely to see the cost of those benefits escalate. The typical price of family coverage now runs about $13,000 a year, but premiums are expected to nearly double, to $24,000, by 2020, according to the Commonwealth Fund. That equals nearly a quarter of the median family income today.

While some employers will continue to contribute the lion’s share of those premiums, there will be less money for employees in the form of raises or bonuses.

“It’s also cramping our economic growth,” said Frank McArdle, a consultant with Hewitt Associates, which advises large employers and reported on the need for change for the Business Roundtable, an association of C.E.O.’s at major companies. Spending so much on health care is “really a waste of people’s money,” Mr. McArdle said.

The higher premiums will also persuade more businesses, especially smaller ones, to decide not to offer insurance. More people who buy coverage on their own or are asked to pay a large share of premiums will find the price too high. It doesn’t take too many 39-percent increases, like the recent one proposed in California that has garnered so much attention, to put insurance out of reach.

“We have an affordability problem that is moving up through the middle class now,” said Paul B. Ginsburg, the president of the Center for Studying Health System Change, a nonprofit Washington research group.

And people are going to die as a result, 275,000 over the next 10 years according to some analysts.

There are too many in Congress who are afraid of the word "comprehensive" and want to do this in incremental steps, but that's what happened in 1994, when Clinton was forced to scrap his health care bill and instead work with a new Republican majority to pass smaller fixes.

It barely put a dent in these costs. In fact, here's a chart comparing the actual rise of health care costs as a percent of GDP with the estimated rise had Congress passed overhauls put forth by the Nixon, Carter, and Clinton administrations.

Pass. The. Bill.