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The Cost of Universal Coverage: Can We Afford It?

I don’t subscribe to many newsletters, but the Galen Institute’s Health Policy Matters is always a provocative read. Here’s an excerpt from this week’s newsletter:

Incoming White House Chief of Staff Rahm Emanuel said this week that universal coverage will be an early, top priority of the Obama administration.

But where is the money going to come from to pay for these massive reform agendas, which were developed before the meltdown of Wall Street, the $700 billion rescue package, and a projected $1 trillion deficit?

The Obama plan is estimated to cost an additional $100 to $160 billion in the first year alone, yet the president-elect made fiscal responsibility a big part of his campaign platform. If the White House is going to extend the plan to mean universal coverage, the bill will be even more expensive.

Mr. Obama also will be facing the huge flood of red ink in Medicare, with the program starting to run out of money in 2017, about the time a second Obama term would end.

It’s impossible to make predictions in the current topsy-turvy political and economic climate, but these power political power centers, fiscal realities, and the urgency of other issues, including Detroit’s looming bankruptcy and an unstable geo-political climate, make these dreams of sweeping health reform a major challenge.

Mr. Obama will likely use the pending expiration on March 31 of the State Children’s Health Insurance Program (which will be renamed) as a vehicle to expand health coverage to all children and possibly even enact his mandate for children’s coverage. That probably means funneling more money to the states through Medicaid since they must pay part of the costs.

After SCHIP, Congress will take the lead on major health reform legislation from there.

We need to remember that 82% of the American people are happy with their own health care and only a minority is willing to pay higher taxes to get to universal coverage. Also, the employer mandate is a new tax, and it is going to be especially difficult to impose during the economic crisis. And can we really tell people who have lost their jobs that now, in addition to everything else, they are going to be forced to buy health insurance?


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One Response to “The Cost of Universal Coverage: Can We Afford It?”

  1. Katie Brewer says:

    This seems to be a clear indication that taking things one step at a time will be important. I hate to say it, but I think this was always the question — great ideas, but how in the world to pay for it.

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