The true cost of healthcare reform

THE DEBATE over healthcare reform seems to be focusing on personal fears and the bottom line.
The Congressional Budget Office is responsible for “scoring” legislation. That is, they analyze the cost of a bill in an overall way, balancing the initial costs with the expected savings in the future.

Some on the Democrat side have argued that the high cost of keeping the status quo should also be factored in. Republicans point to the federal deficit and ask, “How can we saddle our children with more debt?”

With the current House health reform bill coming in with a CBO estimate of $1 trillion, experts anticipate the reform battle to soon reach an even higher fever pitch.

Dan Hunt, a healthcare analyst at RCM, the equity company within Allianz Global Investors, said, “Investors fear a government takeover of healthcare when, in fact, exactly the opposite is happening. Investors should worry about the healthcare takeover of government.”

“Already, Medicare and Medicaid comprise over 20 percent of the pre-interest federal budget, or around 4.5 percent of the gross domestic product,” Hunt said.

David Balto and Stephanie Gross of the Center for American Progress are calling for Congress to eliminate the antitrust exemption that prevents effective federal enforcement against health insurers.

“A tsunami of health insurance mergers has led to high levels of concentration in practically every market to the point where there are only one or two dominant insurers in many states,” they said in a recent paper. “New companies face substantial entry barriers, and so these local monopolies go unchallenged.”

Commonwealth Fund President Karen Davis said determining what is and isn’t “affordable” for different groups is the challenge. “Though these issues will be difficult to resolve, reaching consensus on what constitutes affordability and committing the necessary funds to achieve it are crucial,” she said.

As health reform hangs in the balance and all eyes are glued on Capitol Hill, I think where you personally stand most likely colors your outlook. If you are the CEO of a health plan, you probably have concerns about how the market will change under reform, how it will affect your bottom line. If you are politician, you worry about falling short in the eyes of your constituents.

And if have life threatening cancer and you can’t get health coverage, you probably don’t care what the price tag is.

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