Make no mistake – we have a health care cost crisis in America. The skyrocketing costs of health care – including insurance premiums, co-payments and prescription drugs – are hitting families, businesses, and the government. Too many Americans live in fear of the astronomical costs they will incur if they or their families experience an unexpected health care emergency. Senate Democrats are committed to enacting health reform that addresses the health care cost crisis,ensures quality, affordable for all Americans.


Health Care Cost Crisis for Individuals

Over time, rising health care costs have consumed a larger portion of Americans’ wages, meaning that Americans aren’t reaping the benefits of their hard work, raises, and productivity gains; in many instances, they simply turn that money over to their insurance company. 

Premiums doubled.Over the past 9 years, premiums for employer-sponsored health insurance have more than doubled, a growth rate six times faster than cumulative wage increases.[1]

Less take-home pay. In 2007, 33 percent of Americans spent 10 percent of their annual income on health expenses, a marked increase from 2001, when just 21 percent of adults were forced to dedicate such a high proportion of their income to health care bills.[2]One study estimates that by 2016 the average cost of family employer-sponsored health insurance will reach $24,000, an 84 percent increase over 2008 premium levels. To meet this high cost, at least half of American families will have to spend more than 45 percent of their annual income to purchase health insurance.[3]

Bankruptcy and foreclosure.Medical costs contribute to bankruptcies and foreclosures. Half of all Americans filing for bankruptcy in 2001 – 2 million people – pointed to medical costs as a reason for their filing.[4][5][6]

Hidden tax.When the uninsured cannot pay for the health care they desperately need, health care providers shift those costs to those who can pay, resulting in a “hidden tax.” A recent study estimates that in 2009, premiums for family coverage are eight percent higher – a national average of $1,100 - due to this cost shift.[7]

Costlier prescription drugs. When it comes to prescription drugs, Americans are getting less for their money. While prescription drug use fell in 2008, total spending increased by 3.3 percent. Furthermore, the average price of brand-name pharmaceuticals increased more than eight percent, the largest increase in five years.[8]

Delayed or skipped care.A recent Kaiser Family Foundation tracking poll found that, within the past year, high health care costs have led six in ten Americans to delay or skip medical care.[9]


Health Care Cost Crisis for Businesses, Especially Small Businesses 

Most small business owners want to offer health insurance to their employees and believe it is the right thing to do. Many feel their business would be more productive if they had health coverage for themselves and their employees. But escalating health care costs stand in the way of America’s entrepreneurs and doing the right thing. 

Barrier to offering coverage.One survey found that three-quarters of small businesses that did not offer benefits cited high costs as the reason, with high administrative costs for servicing a very small group of insured individuals greatly contributing to those high costs.[10][11]

Fewer firms offer coverage.Between 2000 and 2007, the percentage of small businesses offering health insurance coverage to their employees dropped from 68 percent to 59 percent.[12]

Drain on payrolls. Small businesses that are able to offer health insurance to their employees find that it is a substantial drain on their payroll, with 40 percent of these businesses spending more than 10 percent of their payroll on health care costs.[13]

Hinders business growth.The cost of health care is holding businesses back, as 40 percent of small business owners have stated that high health care costs have a negative effect on other parts of their business, such as high employee turnover or preventing business growth.[14]


Health Care Cost Crisis for Government

In 2007, the United States spent a total of $2.2 trillion on health care, just over 16 percent of gross domestic product (GDP), and the Congressional Budget Office (CBO) estimates that federal spending on Medicare and Medicaid was approximately four percent of GDP.[15]If Congress does not act, total health care spending will consume 25 percent of total GDP in 2025, just 16 years from now, while federal spending on Medicare and Medicaid will balloon to seven percent of GDP during that time period.[16]


Quality, Affordable Health Care for All Americans

Senate Democrats recognize that Americans can no longer afford health care in America, and that we must address the health care cost crisis. Democrats will continue to make the case for health reform, advance the debate on options for reform, and remain focused on the health care needs of American families and businesses.


[1]Kaiser Family Foundation and Health Research and Educational Trust, “Employer Health Benefits 2008,” (2008), available at

[2]S. R. Collins, J. L. Kriss, M. M. Doty, and S. D. Rustgi for The Commonwealth Fund, “Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families: Findings from the Commonwealth Fund Biennial Health Insurance Surveys, 2001–2007,” (August 2008),available at

[3]S. Axeen and E. Carpenter for the New America Foundation,“The Cost of Doing Nothing: Why the Cost of Failing to Fix Our Health System is Greater than the Cost of Reform,”(November 2008),available at

[4]D. U. Himmelstein, E. Warren, D. Thorne, and S. Woolhandler, “MarketWatch: Illness and Injury as Contributors to Bankruptcy,” Health Affairs, (February 2, 2005).

[5]C.T. Robertson, R. Egelhof, and M. Hoke,“Get Sick, Get Out: The Medical Causes of Home Foreclosures,” Health Matrix, 18 (2008): 65-105, available at

[6]E. Warren,“Sick and Broke,” Washington Post, February 9, 2005.

[7]B. Furnas and P. Harbage for the Center for American Progress,“The Cost Shift from the Uninsured,” (March 2009), available at:

[8]M. Seaman, “US prescription drug use fell in 2008, study says,” Washington Post, May 13, 2009, available at:

[9]Kaiser Family Foundation, “Kaiser Health Tracking Poll - - April 2009,” (April 2009), available at

[10]HolveE, Brodie M, Levitt L, “Small business executives and health insurance: Findings from a national survey of very small firms,” Managed Care Interface, 2003;16(9):19-24.

[11]Congressional Budget Office, “CBO’s Health Insurance Simulation Model: A Technical Description,” (October 2007),available at

[12]Kaiser Family Foundation,“Employer Health Benefits 2008 Annual Survey,” (2008), available at:

[13]The Main Street Alliance, “Taking the Pulse of Main Street: Small Business, Health Insurance and Priorities for Reform,” (January 2009), available at:

[14]The Main Street Alliance, “Taking the Pulse of Main Street: Small Business, Health Insurance and Priorities for Reform,” (January 2009), available at:

[15]P.R. Orzag, “Growth in Health Care Costs: Statement before the Committee on the Budget,” (January 31, 2008), available at