Going into 2016, the data points to a 9-11% increase in healthcare costs. Let’s not get bogged down into who will bear this cost, let’s just agree it will not be good for Employers, consumers, and State Budgets.
The GDP of the U.S. is approximately $17 trillion. Healthcare is 17% or approx $3 Trillion. This increase transfers $200 billion additional dollars out of consumers (as a tax, or employers as a cost, or States as an expenditure).
This is on top of an expected flat to 2% revenue growth expected next year. Consumers will stop spending on other things or take the tax and drop out, employers must grow $10 dollars of revenue for every dollar of the increase they will absorb, to simply keep EPS the same. At 8% of GDP for Employer portion of Health costs, that is $100 billion in new revenue. That is nearly a 6% growth in Revenue just to run in place.
