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Health Care Reform Should be Scored Over the Long-Term

Posted By Stephen Keen On July 16, 2009 @ 12:53 pm In Economics | Comments Disabled

President Obama has repeatedly signaled he would not support a health care reform bill unless it includes long-term cost savings. He recently promised to [1]“take on key causes of rising [health care] costs – saving billions while providing better care to the American people.”

But will the current health care reform proposals actually curtail costs? Recent estimates from the non-partisan Congressional Budget Office (CBO) say no. The 10-year price tag for the House version currently stands at $1.3 trillion. [2]

The Obama Administration does not refute the fact that health care reform will come with an expensive near-term cost; rather, it claims that such costs are actually an investment in exchange for long-term savings. Unfortunately, this assertion has a key problem. At present, not one of the health care proposals has been officially scored by the CBO over a period greater than ten years. In fact, nearly all important pieces of legislation signed into law with long-term budget implications are passed without a long-term CBO scoring. This must change, because as we know from the other health care entitlements – Medicare and Medicaid – their total cost will more than double over the next forty years. [3]

For example, when the Medicare Part D drug benefit was passed, the five-year cost that was voted on was $409 billion. The long-term present-value cost exceeds $9 trillion today. [4] If we’re going to have a serious conversation about health care reform and the long-term health of our economy, we have to look outside a ten-year window.

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URL to article: http://blog.heritage.org/2009/07/16/health-care-reform-should-be-scored-over-the-long-term/

URLs in this post:

[1] promised to : http://www.healthcareitnews.com/news/obama-urges-healthcare-reform-paid-boosting-efficiencies

[2] $1.3 trillion. : http://www.foundry.org/2009/07/15/the-true-cost-of-the-house-health-plan-in-pictures/

[3] their total cost will more than double over the next forty years.: http://www.heritage.org/research/features/BudgetChartBook/Entitlement-Spending-Will-More-Than-Double-by-2050.aspx

[4] long-term present-value cost exceeds $9 trillion today.: http://www.heritage.org/research/socialsecurity/wm2458.cfm

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