More Debate Over National Health Care Costs

Who is right about what health care costs will be in the U.S. over the next decade? No one. The figure is too hard to come by, as is any number based on complex data forecast over many years. The number of guesses about what the Obama health care law will cost varies from the White House’s budget to a different estimate by the Congressional Budget Office. Against these is a new set of estimates from analyst Charles Blahous, who is the GOP trustee for Medicare and Social Security.

The Washington Post reports that Blahous, a senior research fellow at George Mason University’s Mercatus Center, forecasts that the health care law, approved by Congress last year:

does generate both savings and revenue. But much of that money will flow into the Medicare hospitalization trust fund — and, under law, the money must be used to pay years of additional benefits to those who are already insured. That means those savings would not be available to pay for expanding coverage for the uninsured.

Blahous makes the observation that if Medicare faces deep financial problems because of Obamacare, it would be handled by Congress soon. He must not have heard about kicking the can down the road.

The Obama administration’s evaluation of its plan was that it would save several billion dollars near the end of this decade, although the costs of the trillion dollar program would increase deficits early in the period. The CBO reported last month that the new programs would cut costs by $48 billion through 2021. But, for that to happen, the plan would not cover nearly as many people as the president had planned. Several big think tanks also have tinkered with expenses and revenue based on estimates of how fast the costs of care and medications will rise, and how many Americans will have access to the new health care safety net.

The health care law, which could still be struck down by the Supreme Court, creates a million moving variables, which include how sick Americans will be and when, what new pharmaceutical treatments will be introduced over the next several years and what they will cost, and how many new doctors will come into the system. Taxpayers can hope the burden from the programs will not be well above estimates, but hope is all they can do.

Douglas A. McIntyre