The Burden of Health Care Costs for Working Families — Implications for Reform | Health Care Reform 2009

Daniel Polsky, Ph.D., and David Grande, M.D., M.P.A. On June 2, 2009, President Barack Obama’s Council of Economic Advisers released a report examining the economic case for health care reform, in which they underscored the importance of cost containment to the long-term sustainability of any reform.1 Despite widespread recognition of the importance of containing costs, political support for this agenda is limited by the fact that those who shoulder the financial burden of maintaining the current system — primarily, working families — are not fully aware of that burden’s full weight. Having constructed a typical health care budget for working families of various income levels, we found that even with growing income, the rapid growth of health care spending is already eroding standards of living for the middle class. Because Americans in the upper half of the income distribution devote a smaller share of their income to health care, their standards of living have yet to decline, but they, too, will do so in the coming decades if current trends continue. If health care reform based on private health insurance is to be sustainable, it has to be affordable for Americans across the entire income distribution. Achieving this goal will require both substantial cost containment and shifts in the distribution of health care costs within the population. Read More