Health Care Reform's Escalating Cost Estimates

The numbers keep climbing. The preliminary $1 trillion estimate from the Congressional Budget Office has been eclipsed by later analyses. Although the CBO's projection seemed hefty enough to slow down the rush to reform and regulate, Philip Klein reports that $4 trillion would be a better estimate of the cost of the "Kennedy bill."  Klein cites a report by the respected independent research group Health Systems Innovations.

Klein writes:

Health Systems Innovations Network, a consulting group, went ahead and estimated the full cost of a bill that included the subsidies and Medicaid expansion, and reduced the number of uninsured by 99 percent. With these assumptions, they estimated  the cost at a staggering $4 trillion over 10 years, resulting in the shift of 79 million Americans to government-run health care. The report does not include possible tax increases or spending offsets, but notes that, "this would be a challenging proposal to finance with budget neutrality."

Galen Institute president Grace-Marie Turner looks at what she calls the bombshell week for national health care reform at the State Policy blog. She cites high costs, overstated savings, delays, and rebuffs among the obstacles to swift passage of federal legislation.

Massachusetts, the oft-cited progenitor of the current reform push, announced today that it's reducing its subsidized health care coverage by 12 percent. The cuts are pegged to the state budget crisis and rising demand for coverage during the recession. They also underscore the shakiness of optimistic cost projections underlying the prematurely celebrated and long-troubled Massachusetts reform.

In Olympia Business Watch, AWB president Don Brunell points to another study showing that government plans like Medicare are more costly than private insurance programs.

Along the same lines, we now see strong advocates of government health care, including Washington Gov. Chris Gregoire, opposing expansion of Medicaid. From yesterday's Wall Street Journal:

Several governors, including Democratic Gov. Christine Gregoire of Washington and Republican Gov. Haley Barbour of Mississippi, plan to come to Washington this week to discuss health issues with White House and congressional officials. Medicaid is expected to be a primary topic.

The latest challenge to President Obama's national health-care plan comes from a bi-partisan contingent of governors who oppose an expansion of Medicaid eligibility. White House correspondent Jonathan Weisman reports.

"[W]e're wary of additional financial obligations when we're struggling to cover the obligations we have," said Jonathan Seib, a Gregoire health-policy adviser.

 Prudent.