Posts Tagged - ‘deficit’

Post border

How Much Does Healthcare Reform Cost?

Wednesday, May 12th, 2010

Image: Jake Wasadin under CC 3.0

Bad news for health insurance reform: the newest cost figures predict that it will cost the government an extra $115 billion in health care costs over the next decade.

The Congressional Budget Office says that if Congress approves all of the spending asked for in the bill, the total cost of the legislation will surpass $1 trillion.

Where are these expenses coming from?

  • $34 billion in funding for community health centers
  • $39 billion for the Indian Health Service, which provides care to Native Americans
  • $10-20 billion in federal administrative costs

Although it clearly makes the affordable health insurance law less affordable, these costs weren’t included in the initial estimates because they are not mandatory; instead, they are authorizations for discretionary spending. Since Democrats lack a filibuster-proof majority, they may not pass.

Post border
Post border

How Could Health Insurance Reform Reduce the Deficit?

Thursday, April 1st, 2010

(Image: stopnlook under CC 3.0)

It seems like somewhat of a paradox: a piece of legislation costing nearly $1 trillion reducing the national deficit? Yet that’s what proponents of health insurance reform believe will happen.

Of course, the American government’s debt won’t be wiped out immediately. Rather, it is supposed to be a process with four steps:

  1. Controlling costs through insurance exchanges intended to make the market more competitive.
  2. Creating an Independent Medicare Advisory Board, which will suggest methods to save money on the expensive program. The members, appointed and confirmed, will not be as beholden to politics. If Congress rejects their proposals, they will have to come up with alternative measures that will result in as much savings.
  3. Taxing the most expensive employer-based health insurance plans. Many believe that such high-cost health plans encourage the overuse of care. Employers and consumers will be more likely to choose more frugal plans, which will remain tax-exempt.
  4. Promoting the bundling of health care services over a period of time, instead of paying doctors on a per-procedure basis. It will start with Medicare, and will expand to private insurers if proven successful.
Post border
Post border

Could Healthcare Reform Improve Deficit Projections?

Wednesday, February 3rd, 2010

According to some experts, pessimistic estimates of what Obama’s newly proposed budget will do to the national deficit may be slightly exaggerated, and health insurance reform may play a role in that.

How is that possible? Initial projections of former President Bill Clinton’s first budget indicated that there would be an unsustainable budget deficit by the year 2000. Instead, the country ended up running a surplus. The healthcare issue comes into play because health care spending–including purchases of individual health insurance–is over one-sixth of the GDP.

Economics professor James K. Galbraith explains that predictions of the deficit in 2020 assume that U.S. healthcare costs will continue soaring at the same rate for the next decade. If comprehensive healthcare reform passes and succeeds in its goal of expanding access to while reducing the cost of care through regulation and increased competition, that portion of debt spending could stabilize or even decrease.

(Image: yomanimus under CC 2.0)

Post border