Without Reform, Health Costs Will Double

Economic Recovery Bill and Broader Health Reform Urgently Needed

Baltimore, MD — Without action from Congress, premiums and deductibles for residents of Maryland with employer provided insurance will nearly double by 2016, according to a new report released today by the Maryland Public Interest Research Group.

“Unchecked, health care premiums will double by 2016,” said Johanna Neumann, Maryland PIRG state director. “The health care reforms in President Obama’s economic recovery plan are indispensable first steps to addressing this crisis.”

Maryland PIRG attributes these high costs to wasteful health spending and the insurance and pharmaceutical industries that profit from it.  The report concludes that one out of three dollars spent on health care fuels profits for special interests without delivering better health care for patients.

The report spotlights two important categories of wasteful health spending in Maryland:

• $4.97 billion each year was spent on inappropriate, ineffective and uncoordinated care which can actually cause harm to patients.
• An estimated $838 million in red tape is created by bloated insurance company bureaucracy.

Neumann lauded the recovery plan’s $24.1 billion investment in the health care infrastructure. Neumann said, “This legislation will fund  health information technology, evidence-based prevention, and comparative effectiveness research will enable the reforms we discuss in the report.”

The Maryland PIRG report calls for additional longer-term reforms that crack down on drug company marketing, rein in insurance industry red tape, and reform provider payment to encourage more effective medical care.

“This year, a new President and a new Congress have an opportunity to pass broad health reform that tames the waste, inefficiency, and skewed incentives that drive up our health care costs,” said Neumann. “Maryland’s families can’t afford to miss this opportunity.”

“We commend PIRG for this well-documented and sobering report,” said Vincent DeMarco, President, Maryland Citizens’ Health Initiative. “This report strongly supports the need for enactment of the Health Care For All Plan that we announced last November which would implement many of the sound suggestions made by PIRG at the state level.”