The Cost of Health Care Reform

Rivers of ink have flowed and thousands of cubic miles of hot air have been expelled around the issue of health care reform. Although a law addressing it has been passed, the debate is far from over. What’s scandalous about the debate to date is that only half of the full issue is being discussed.

The Congressional Budget Office projects that the new law will cover 32 million uninsured people at a net cost to taxpayers by 2019 of $938 billion. Let’s pause now to exclaim, “Holy cow! Health care reform will cost us almost a Trillion dollars!”

That’s the message being sent by all that ink and hot air. The other half that isn’t being discussed is the cost of not providing health care insurance to the uninsured. Because, after all, uninsured people get sick, they get health care (usually at later stages in their illnesses than insured people), the health care costs money (usually a lot more than what it costs to treat their illnesses at an earlier, preventable stage), and they may not be able to pay for all of it (often because their full-blown illnesses limit their incomes, their physical capacities and their life spans). 

Who pays for the cost of health care the uninsured can’t pay for now? We do, through higher hospital and medical provider costs, higher health insurance premiums, lower salary increases and bonuses (because our employers are paying those higher premiums), and higher taxes for government subsidies for care for the uninsured. And, if we read and listen only to major news outlets, we have no idea how much we already spend.

The most recent figures I’ve found, from the Kaiser Family Foundation, document the costs of health care for the uninsured for 2008 at about $57 billion. According to a report by Standard & Poor’s, the average, per capita costs of providing health care rose 7.32% in 2009 to $61 billion. The S&P report went on to document an average rise in health care costs of 7% per year from 2000 to 2010. If that 7% inflation figure continues in the absence of health care reform through 2019 (and you know it will, short of either legislative reform or divine intervention), the aggregate cost we will all pay for uncompensated care for the uninsured under our current system will be $962 Billion. Excuse me while I exclaim, “Holy cow!  If we do nothing, health care status quo will cost us almost a Trillion dollars!”

But that’s not all it will cost. Stay tuned for a future blog with the rest of the story.