The impact of sky high health insurance premium, more than $11,000 for a family and $4,500 for an individual, is now even felt by those companies who once had promised to offer life time healthcare coverage for their employees and dependents. Many of these employers are now either canceling healthcare benefits of retirees or shifting a significant portion of healthcare costs to the employees and retirees. In contrast to their larger counterparts, small businesses (less than 100 employees) have not been able to absorb the increasing costs of healthcare. The number of small employers offering health benefits has declined from 69% in 2000 to 58% in 2004. The decline in employers that offer healthcare benefits has caused many working Americans to join the ranks of the uninsured.

Currently, an uninsured individual delays receiving healthcare services because of the burden imposed by high healthcare costs. Subsequently, in many cases, health problems deteriorate leading to the eventual outcome of having to receive medical care in an emergency department. This is where the high cost of healthcare cycle begins. A non-emergency case gets in queue, clogs the hospital capacity, consumes critical resources, and creates delays to the real-emergency cases. Attending to a non-emergency case in an emergency department creates inefficiencies that result in higher costs for all, irregardless of the fact that the uninsured individual will be billed at the listed prices and will be unlikely to pay all or part of the hospital charges. It is this differential unpaid amount that is spread across the insured and other customers. The result of this detrimental cycle is that it creates higher insurance premiums and fees. The increase in premiums becomes unaffordable by small employers especially, causing them to discontinue offering healthcare benefits to employees. The end result - increases in the uninsured working population.

Of course there are other factors such as innovative medical test and treatment technologies, new medicines, shortage of healthcare professionals, malpractice insurance, lack of information technology deployment, and others that contribute to the higher costs of healthcare. If the 45 million uninsured were to avoid 10 million emergency room visits, for instance, at an average cost of $4,000 per visit, it could shave off $40 billion in healthcare costs.