The Health Care Reform Already Costs More Than We Thought It Would

More

There's been a spate of bad news recently about the health care bill. 

Henry Waxman canceled his War on Accounting, not because there was a sudden breakout of common sense on Capitol Hill, but because his committee's investigation revealed that companies had begun exploring whether they should drop their health insurance plans entirely--a move that would cost over $100 billion thanks to the huge new subsidies the government would have to dole out.

Meanwhile, the CBO just came out and said that the health care reform was slated to cost $115 billion more than they said it would.  Why?  Because they didn't have time to calculate the effects on discretionary spending such as new administrative capacity, demonstration projects, and continuation of successful short-term initiatives.  As my fiance notes, Olympia Snowe's demands to slow down the process suddenly seem a lot more reasonable.

The progressive response on this, as I understand it, is threefold: 

  1. We don't have to fund this stuff
  2. Maybe we'll cut something else to fund this stuff
  3. C'mon, who cares?

Predictably, I find none of these convincing.  Some of the stuff we do have to fund, because the agencies are going to have to have staff to deal with the new requirements; and the stuff we don't have to fund is the demonstration projects that I was assured were going to bend the cost curve.  So if we save this money in the first ten years, we lose the possibility of lower cost growth after the first decade.

What's really worrisome, however, is that I'm unaware of any happy surprises where it turns out this thing is going to cost less than expected.  It's early days, yet, of course--but it's a little too early to take rapidly mounting cost projections in stride.  We haven't done anything yet, and we're somehow already at least $100 billion in the hole.

Jump to comments
Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

Get Today's Top Stories in Your Inbox (preview)

A Fascinating Short Film About the Multiverse

If life is a series of infinite possibilities, what does it mean to be alive?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In