America spends an unprecedented amount of money on health care every year. In 2009, the United States spent an estimated $2.5 trillion on health care, consuming 17.3% of the GDP. According the the Centers for Medicare and Medicaid Services (CMS), last year’s health care costs represent the largest one-year increase in the health share of GDP since the measure was first tracked in 1960.
If you break down health costs even further, the direct impact on American families is alarming. In 2000, family health insurance purchased through an employer cost $6,438 and consumed 13% of median family income. In 2008, the same family health insurance cost $12,680, a 97% increase over the 2000 cost, consuming roughly 21% of median family income. If nothing is done to change the way our health care system works, spending levels will continue to rise at an unsustainable rate. In just nine years from now, health care spending will consume more than 19% of GDP.
There is no question that health care reform is needed today to curb rising costs. The health insurance reform bill passed by the Senate in December 2009 will reduce deficits by $132 billion over the next ten years. If we’re serious about reducing the deficit, we can’t do it without signing health care reform into law this year.