Now Begins the Hard Part

Posted by Bill Pierce

We now know the answer to a question that has been asked for months – How much will health care reform cost?  The initial answer, according to the Congressional Budget Office (CBO), at least $1 trillion dollars over ten years and that won’t even cover all of those who currently are without insurance. 

According to the CBO under the Senate HELP Committee plan as it currently stands, we will see a net increase in coverage of 19 million of the approximately 46 million who are without health care coverage.  The CBO estimates that 39 million would gain coverage under the HELP plan, but another 20 million would lose or drop coverage resulting in a net gain of 19 million.  And all this comes at a cost of at least $1 trillion.  This number could be more, much more, or less, as the HELP bill still has several holes that prevented the CBO from fully estimating its costs.

What this tells us is that health care reform will be expensive.  But we knew that.

What it really means is that health care reform is complicated.  Make a change in one area to fix a specific problem and it can have an unintended impact in another.  Hence the net gain of 19 million uninsured, even though the provision to cover the uninsured adds 39 million, that same provision also causes another 20 million to lose or drop coverage.  Decisions and details matter in this debate.

For those who truly want and believe we need to reform our system, this initial estimate does not mean the end of reform.  It just provides an opportunity to make changes and adjustments to try and increase the net number, while keeping a close eye on the cost.

However, even in today’s world of $800 billion stimulus packages and industry bailouts in the hundreds of billions of dollars, a trillion dollars is a lot of money and this provides an opportunity for the bill’s critics to reasonably ask why we should pay this much when it doesn’t provide universal coverage.

So now the debate begins in earnest as both sides have a target to aim at in what should prove to be a very lively and aggressive debate.  Each side has their work cut out for them as we clearly need to make changes to our health care system to provide better coverage to more people, yet we do not have an endless supply of money to pay for it.

In the end, the decision on how much to spend and how to spend it lies with President Obama.  He will have to make a decision, and it could come soon, on whether he wants to risk his political capital and potentially future on going it alone with no Republican support, and thus get all the benefit if the plan works out, or all the risk, if it does not.  If he brings Republicans along with him, they each can share in the benefit and/or risk.