Without Reform, Family Health Care Spending To Skyrocket; 34% Increase By 2015, 79% By 2020

Study: Number of uninsured Americans could grow by 10 million in just five years

    • March 15, 2010

Without significant reform to the current health care system, the number of uninsured Americans could grow by 10 million people in just five years, and spending on government health care programs for the poor could more than double by 2020, according to a new report released today by the Robert Wood Johnson Foundation (RWJF).

The report projects that by 2015, there could be as many as 59.7 million people uninsured—and further estimates that the number could swell to 67.6 million by 2020. An estimated 49.4 million individuals were without health coverage in 2010.

Analysts at the Urban Institute used their Health Insurance Policy Simulation Model to assess the changes in coverage patterns and health care costs that will occur nationally from 2010 to 2020 in the event that major reforms are not enacted. The study examined three alternative scenarios:

  1. Worst case—continuing high levels of unemployment; slow growth in incomes; high growth rates for health care costs;
  2. Intermediate case—somewhat faster growth in incomes, but a lower growth rate for health care costs; and
  3. Best case—full employment; faster income growth; even slower growth in health care costs.

Under all three economic scenarios, the analysis shows that the middle-class would suffer most without reform. For employers who continued to offer health insurance benefits, an increasing amount of the costs would likely be passed on to workers. At the same time, individuals and families would face higher out-of-pocket costs for premiums and health care services.

“Families and individuals across this country are already stretched beyond their means. They simply cannot afford to see their insurance costs rise by more than a third in just five short years,” said Risa Lavizzo-Mourey, M.D., M.B.A., RWJF president and CEO. “This report paints a grim picture for the future of our nation if we fail to make health insurance more affordable for all Americans, while also reducing health care costs.”

The Urban Institute model shows that under the worst case scenario, if health care reform is not enacted:

  • Families will face dramatically higher health care costs. Individual and family spending on premiums and out-of-pocket health care costs will increase significantly. Spending will jump 34 percent by 2015 and 79 percent by 2020.
  • The number of uninsured Americans will increase from 49.4 million in 2010 to 59.7 million in 2015, and 67.6 million in 2020. If states were to cut back eligibility for public programs like Medicaid or the Children’s Health Insurance Program—or make the enrollment process more difficult—the number of uninsured will be even higher.
  • Middle-income families will be hardest hit. The uninsured rate for middle-class families earning 200-399 percent of the federal poverty level (FPL)—roughly $40,000 to $75,000 a year—will rise by nine percentage points, from 19 percent to 28 percent. Overall, the share of the uninsured from all families with incomes higher than about $40,000 will rise from 44 percent to 53 percent in 2020.
  • Uninsured rates will also rise among older adults. The uninsured rate for adults ages 45 to 54 will increase from 17 percent in 2010 to 24 percent in 2020. For adults ages 55 to 64, the uninsured rate will increase from 15 percent in 2010 to 22 percent in 2020.
  • Premiums will become increasingly expensive for employers and their workers. Premiums for both single and family policies will more than double by 2020, increasing from $4,800 to $10,300 for single policies, and from $12,100 to $25,600 for family policies.
  • Employers will see large increases in costs. Employer spending on premiums, despite the fact that fewer people will be covered through their employer, would increase from $430 billion in 2010 to $851 billion in 2020—a 98 percent increase.
  • Employers will quit offering coverage benefits to workers in small and medium-sized firms. As premiums nearly double, employees in small firms would see offers of health insurance almost cut in half, dropping from 41 percent of firms offering insurance in 2010 to 23 percent in 2020. Medium-sized firms would also cut offers of health insurance, dropping from 90 percent in 2010 to 75 percent in 2020.

“By examining the best available economic data, we can project what will happen to our health care system if we continue along our current path,” said lead author Bowen Garrett, Ph.D., a senior research associate in the Health Policy Center at the Urban Institute. “The bottom line is that we are likely to see a significant deterioration in who has health insurance coverage in this country, coupled with untenable increases in private and public spending.”

The report is being released during Cover the Uninsured Week, a nonpartisan campaign organized by RWJF to advocate for health coverage for all Americans. Now in its eighth year, Cover the Uninsured Week (March 14-20) has become the largest, nonpartisan mobilization in history seeking solutions for the millions of Americans who are uninsured. To learn more, log on to www.CoverTheUninsured.org.