Tuesday, August 11, 2009

The High Cost of Doing Nothing

"ObamaCare", the opposition name for the health care reform effort now proceeding through 4 or 5 bills in Congress is rather short on true reform since its number one goal seems to be to preserve the astronomical profits of the industry. But ... is it worse than doing nothing?

The Congressional Budget Office recently scored one of the Democratic proposals, and concluded that it would cost $1 trillion over 10 years, or even $1.5 trillion in the worse case.

My God - how can we afford that! That's like 1/7th of what we spent in a little over a year bailing out Wall Street!

Well, not exactly. The CBO scored an early version without a public option or employer mandate, it now says that plan would "only" cost $600 billion over 10 years and that doesn't include all the savings that would be achieved from such things as new cost controls and far fewer of the very high costs from uninsured people avoiding early care and waiting for expensive publicly funded emergency care. $600 billion - over 10 years - is about a third of what we'll spend on Iraq and Afghanistan.

Still - an extra $60 billion a year is a lot of money. Can we afford it?

Better question: can we afford doing nothing?

America has the most expensive health care system in the world - and for that we provide the best health care industry profits in the world, but not anywhere near the best health care outcomes for our population - we are solidly in the second tier of emerging nations in overall quality of health care, no where near the rest of the industrialized world - we are bested by such industrial powerhouses as Costa Rica, Dominica, Chile, Cyprus and Columbia.

For that we are paying nearly twice as much as any other nation - 17.6% of our GDP - over $2.5 trillion this year. Costs are increasing at a rate of over 6% every year, in 10 years time we'll by spending over $4.6 trillion per year, about 21% of GDP.

The Centers for Medicare and Medicaid Services actuarial center (in the Dept of HHS) calculates that 47.4% of the total expenditures on health care in the United States will come directly from government sources this year - and by 2019 that will increase to 51.7%.

With National Health Expenditures increasing from $2.51 trillion this year to $4.67 trillion in 2019, and the public paying 47.4% today increasing to 51.7% in 10 years, the extra cost to taxpayers of doing nothing will be $5.66 trillion dollars.

And on top of that the average taxpayer can expect to be paying twice as much for their private health insurance.

Kinda makes $600 billion look like chump change.

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