Health Reform Won’t Reduce Health Insurance Costs

On the front page of the New York Times and the Wall Street Journal were two articles that really hit at the heart of health reform’s promise of covering everyone and reducing/controlling health insurance costs.

In the New York Times there was also a full page ad run by the American Medical Association urging Congress to pass emergency legislation to prevent their reimbursement rates from dropping. This happens every year as Congress does not have the will to actually implement cost saving measures it adopted years ago to control runaway Medicare expenses. I’m sure that Congress will come back from their Memorial Day break and pass this legislation; like they do every year.

So what makes anyone think that when the time comes to start cutting provider fees under health reform that Congress won’t pass emergency legislation every year to prevent those cuts from happening. I am pretty sure that it won’t, and the attacks on the Dartmouth Study are the initial campaigns by health care providers to make sure its not their fat cut from the meat to pay for health reform.

Karl Rove in his Op-Ed piece in the WSJ makes some pretty compelling arguments about other hidden costs, points out that the Congressional Budget Office has added another $120 Billion to the price tag of health reform and that Medicare’s chief actuary sees many places where the unintended consequences of health reform will cost us a lot more money. While slanted, its worth a read.

When promoting the cost savings of health reform, the administration used the Dartmouth Atlas of Health Care to show that there is up to $700B a year in potential savings by eliminating “waste” in the health care system. Today’s article in the New York Times makes a very compelling case that the potential savings are significantly less than advertised as “measures of the quality of care are not part of the formula”.

The study mainly shows the varying costs of care in Medicare by region. Everything about savings was an extremely loose extrapolation of the data as it was argued that care in Iowa and Minnesota is better and cheaper than care in New Jersey or Miami. In fact, this article points out that there is little evidence to support this notion.

Bottom line, the recently enacted Health Care Reform plan will cost our country significantly more than advertised and it is simply not possible to provide universal coverage without raising revenue (aka taxes) – on pretty much everyone.

If the legislation goes into effect, it will make our existing budget problems worse and it will lead to higher taxes eventually, and again, not just on people making more than $250,000.

Personally, I am not opposed to the concept that everyone should get health care, but in a democracy we need to have an honest conversation about how much that will cost and then decide if the majority of the people are willing to pay for universal coverage.