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The Cost of Health Care

The Growing Costs of Health Care Reform

In spite of its name, “The Patient Protection and Affordable Care Act (PPACA),” will NOT make health care more affordable. As troubling, consumers could see significant declines in the quality and accessibility of their health care options.

Costs to Consumers

With provisions of the law looming, health insurance rates increased on average about 9% in 2011—with as much as half the increase attributable to PPACA. The average family is paying $2,400 more for health insurance premiums since 2009.

The health care reform law also includes new individual taxes, mandates, and penalties. The surtax on higher incomes is not indexed for inflation, so over time, this penalty will hit middle-income Americans.

Costs to Businesses

America’s businesses—especially small and mid-size companies—will bear the brunt of new costs imposed by the health care reform law. These costs include:

  • Higher premiums;
  • Higher administrative and compliance overhead; and,
  • New taxes and penalty fees.

Of course, businesses will not fully absorb these new costs on their own. Those increases are passed on to consumers.

Costs to the Health Care Sector

The health care reform law imposes new taxes directly on the health care industry. Medical device companies, pharmaceutical manufacturers, and health plans all face new taxes. These increased costs will slow investment in medical research and development.

And again, consumers can expect to see those increased costs passed on to them.

All told, the health care reform law establishes mandates and bureaucracies that raise costs, but there is no clear roadmap to improved care.

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