Urban Institute: Reform failure could push middle class over the financial edge

Failure to pass a significant national reform package could have unpleasant consequences for the nation's healthcare system and its middle class. Ten million additional Americans could become uninsured in just five years, and government healthcare spending for the poor could more than double by 2020, according to a new report prepared by the Urban Institute for the Robert Wood Johnson Foundation (RWJF) in Princeton, N.J.

"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," says Risa Lavizzo-Mourey, 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 healthcare costs."

Urban Institute analysts used a simulation model to assess the best-case, intermediate-case and worst-case scenarios for the national changes in coverage patterns and healthcare costs that will occur from 2010 to 2020 without major reforms. The middle class will be hit the hardest under all three economic scenarios.

This year, approximately 49.4 million people have no health coverage. In the worst-case scenario, the number of uninsured would jump to 59.7 million by 2015 and to 67.6 million by 2020. The uninsured rate for middle-class families earning roughly $40,000 to $75,000 a year would rise to 28 percent in 2020, up from 19 percent in 2010. Overall, the percentage of uninsured people from families with incomes above $40,000 would increase from 44 percent to 53 percent in 2020.

In the worst-case scenario, premiums for both single and family policies would more than double by 2020, rising from $4,800 to $10,300 for single policies and from $12,100 to $25,600 for family policies. Employer spending on premiums would increase by 98 percent, jumping from $430 billion in 2010 to $851 billion in 2020. As a result, small and medium-sized employers would stop offering coverage benefits to employees, say the analysts.

These skyrocketing costs would impose heavy strains on government healthcare programs. Medicaid and Children's Health Insurance Program (CHIP) enrollment would increase from 45.4 million in 2010 to 58.2 million in 2020, an increase of 12.8 million nonelderly Americans. Medicaid and CHIP spending for the nonelderly would grow 108 percent from $278 billion in 2010 to $576 billion in 2020. In addition, uncompensated care costs would more than double, growing from $64 billion in 2010 to $140 billion in 2020.

To learn more:
- read the RWJF report
- check out the fact sheet