America's Looming Health Care Disaster

"Insurance carriers, even the not-for-profit Blue Cross plans, are going to suffer mightily as layoffs accrue," Nash noted.

And this hit from lost revenue gets passed on to employers, who, in turn, pass it on to existing policyholders.

"Many employers have faced double-digit increases in the costs of their share of health benefits this year, and that is going to continue," Wolfson said. "In response, many employers elect to shift or eliminate cost burdens associated with health benefits to employees."

Nash calls this additional cost burden on the average family "catastrophic."

"The average family of four with private health insurance in the U.S. already spends $10,000 a year [for health insurance coverage]," he said. "That's in addition to what their employers provide. ... It's staggering."

For such a family, an increase in premiums or a decrease in employer support could mean thousands of dollars more per year -- even if none of the wage earners in the family suffer a layoff.

For the health industry, the outlook may be even bleaker, at least in the short term. Nash said the signs of the U.S. medical system's imminent catastrophe are already being seen. Along with postponement and cancellation of elective surgeries and an increase in bad medical debt, more people are experiencing decreased access to medical services. Likewise, more people are unable to afford their medication.

Unpaid health care bills are the single leading cause of personal bankruptcy in the United States. A surge in this statistic, combined with unemployment and bad medical debt, could be enough to capsize some major players in the health care industry, Nash said -- an industry that contributes 17 percent of the country's GDP.

"Nobody ever thought of this toxic byproduct of health insurance being tied to the work place," Nash said. "This is a really dreadful knockout punch that you are not hearing anybody in positions of authority talk about.

"Very soon you can predict that the American Hospital Association will be at the White House looking for the same kind of handouts that we're giving the auto industry."

'There Is Not a Silver Lining'

Most health policy experts said that, while the future of the American health care system remains uncertain, what is clear is that a change is needed.

"As someone who grew up in Germany and lived for some years in Canada and got used to portable, life-cycle health insurance, I have always been amazed that Americans preferred the ephemeral health insurance that comes with the job at a particular firm and is lost with losing that job." Reinhardt said. "Now, the foolishness of that preference is becoming clear to many middle-class Americans who spent their life denigrating 'government' health insurance.

"Frankly, I find it hard to muster much sympathy for people who are waking up only now."

"There is not a silver lining," Nash said. "What's coming home to roost here is the historical accident of having private health care insurance tied to the place of employment. There is no way out if it is tied to the source of where you work."

Some options still exist for those who need health care coverage, but still need to make ends meet after a layoff.

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