Health Economics and Microeconomics Health Reform

ECON 202: Principles of Microeconomics
Health Care Reform

Health Care Reform
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Health Care System. Inefficiencies in the Health Care System. Some proposals discussed.

ECON 202: Princ. of Microeconomics

Health Reform

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Health Care Spending as a Share of GDP

ECON 202: Princ. of Microeconomics

Health Reform

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1. Health Care System
Effect of high health cost on households Around 59% of individuals younger than 65 years of age receive employer-sponsored health insurance.

ECON 202: Princ. of Microeconomics

Health Reform

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1. Health Care System
As health care costs have grown, so have employersponsored health insurance premiums. Between 1996 and 2006, the average annual premium for family coverage obtained through an employer grew from $6,462 to $11,941 (in 2008 dollars), an 85 percent increase in real terms. In the long run, workers pay for the rising cost of health insurance through lower wages.

ECON 202: Princ. of Microeconomics

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1. Health Care System
Projected Annual Total Compensation and Compensation Net of Health Insurance Premiums.

ECON 202: Princ. of Microeconomics

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1. Health Care System
Employers can also shift to less generous plans.
In particular, employers are shifting toward plans with higher annual deductibles, Workers and their dependents are paying more out-of-pocket when they receive care.

Small employers appear to be shifting to less generous plans even more dramatically than large employers.

ECON 202: Princ. of Microeconomics

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1. Health Care System
Average Employer-Sponsored Health Insurance Family Deductibles by Firm Size.

ECON 202: Princ. of Microeconomics

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Effect of High Health Costs in Government Almost half of health care is paid for by Federal, state, and local governments through Medicare, Medicaid, Children's Health