Costs of health bills, health care under scrutiny

Oct 5 2009

"A bill to overhaul the nation's ailing health care system must avoid additional spending now, and also lower costs down the road, former Federal Reserve Chairman Alan Greenspan said Sunday," CNN reports. "Greenspan told the ABC program 'This Week' that the federal debt was already getting too big, so reforming health care must do more than achieve what politicians call revenue neutrality — bringing in as much money as it costs." Greenspan explained that "revenue neutral is not adequate. … In other words, we have to not only have a revenue neutral reform program, but simultaneously recognize that we have to address the longer term." He added that Medicare is a "huge fiscal hole out there," which requires long-term borrowing to cover benefit costs (10/4).

Meanwhile, although many believe the rising cost of health care in America is due to an overuse of medical care, "Industry experts see a much more complicated picture," The Philadelphia Inquirer reports. "Americans actually see doctors and stay in the hospital less than residents of other industrialized countries, they say. Our costs are high for a constellation of reasons involving relatively uncontrolled prices, insurance that masks real costs from consumers, heavy use of technology, wide variations in care, and excessive administrative costs." But "[m]aking a dent in this problem, as Washington is discovering, is a tough, disruptive job that not only would change the way people get care, but also threaten the livelihood of powerful vested interests." There are disagreements among health experts on how to cut costs, "with some saying a more rational use of resources could curtail spending and others saying the only effective solution is price control" (Burling, 10/4).

The Associated Press: "Many middle-class Americans would still struggle to pay for health insurance despite efforts by President Barack Obama and Democrats to make coverage more affordable." Congressional legislation "would require all Americans to get insurance — through an employer, a government program or by buying it themselves. But new tax credits to help with premiums won't go far enough for everyone. Some middle-class families purchasing their own coverage through new insurance exchanges could find it out of reach."

An online Health Reform Subsidy Calculator from the Kaiser Family Foundation "provides ballpark estimates of what households of varying incomes and ages would pay under the different Democratic health care bills" (KHN is a program of the foundation). "Because health insurance is so expensive, lawmakers recognize that if they're going to pass a law requiring all Americans to get coverage, government has to defray the cost. The size of those subsidies makes an enormous difference." Current legislation gives "provides the most generous subsidies to those at or near the poverty line, about $22,000 for a family of four. That's where the problem is concentrated because about three-fourths of the uninsured are in households making less than twice the poverty level. But as income rises, the subsidies taper off" (Alonso-Zaldivar, 10/4).

Related KHN story: Health Bills Might Not Protect Some Needy Americans (Rau, 9/4)