Healthcare: The CBO Report Cometh

The CBO score of the finance committee final bill seems to be coming out later this afternoon.  Jonathan Cohn says:

The Congressional Budget Office is expected to deliver its final estimates on the Senate Finance Committee's bill sometime in the afternoon. And while most of the chatter so far has been about the measure's cost, pay close attention to the other side of the equation: How many people it covers.

The House and Senate HELP bills reached about 95 percent of Americans (that is, 95 percent of legal residents) and a lesser percentage of total residents. The bill Max Baucus originally put forward didn't reach quite as many people. But after all of the changes made in committee, that number could go even lower.

This is something of an understatement.  The Wall Street Journal notes:

The Congressional Budget Office estimated that an earlier version of the Senate Finance bill would ensure health insurance for 91% of Americans -- leaving about 25 million people without coverage. The CBO's estimates for the latest version of the bill are due out this week; it is expected to cover fewer people. About 85% of Americans currently have health insurance.

But one of the major developments over the past week has been the weakening of penalties for failing to buy health insurance. So as Cohn says, most people expect the number of insured people to drop under whatever the committee passes.

To see why, think of it this way:  people buy health insurance for three reasons. 

1.  Cost insulation--getting the insurance company to cover your pills and preventive care

2.  Accident insurance

3.  Insurance against a serious disease

Problem #1 is not achievable on a national scale; it's just the tax code that gives people the illusion that they can somehow save money by adding third and fourth parties to the transaction.  Problem #2 can for many people be largely abated by purchasing vastly more generous auto insurance--raising your purchase to the maximum insurable limit costs a lot less than health insurance, at least where I shop.   So problem #3 looms largest.

if guaranteed issue and community rating exist, everyone in the country effectively has health insurance for a sudden serious disease.  If they get cancer or something, they can just sign up at any time.  They're also covered for a big portion of the costs of any traumatic injury, because a lot of the cost for follow up and rehab comes with enough lag for people to get themselves insured. Thus, the mandate.

But $750 isn't really a very high cost.  Why would you pay hundreds a month for health insurance, when you could pay $62.50 a month to take a slim chance of some very traumatic accident happening to you without the involvement of an insured driver?

So it's probably going to be significantly lower than that 91%.  Like, under 90% of Americans covered.

To put it another way, we're contemplating spending about a trillion dollars in order to cover a few percent of the population--quite possibly leaving more than 2/3 of those currently uninsured without insurance.  Oh, and also, the provider groups that supported the bill say they'll defect if the coverage rate is this low, because it will cost them a lot of money.

I predict some very interesting debate over the next few days.

On an only tangentially related note, Cohn wins the internet for today with his post's headline.  Mostly because increasingly, that describes my entire life.