Friday, February 26, 2010

Bending The Curve

There was a considerable catfight at the “health care reform summit” yesterday over whether the CBO report said that the reform legislation would raise health insurance premiums compared to what would happen under current law. Consensus was that President Obama came out on top, which wasn’t really as big an accomplishment as it might seem; he was outnumbered, but it seems he had the truth on his side. Truth doesn’t always win, but when it’s Obama wielding it…

You can read the report for yourself; it’s remarkably concise for a government document, and it seems very clear to me that those arguing with Obama yesterday were producing something that normally comes out of the south end of a northbound horse.

Something got lost in that catfight, though, paraphrasing,

“If we do not pass this legislation the cost of health insurance will continue to skyrocket out of control. Before long you will be paying more for insurance than you do for your house. We must pass this reform to bend the curve of health care costs.”

What the CBO report compares is not what premiums will do compared to current premiums, it predicts what premiums will do under reformed law to what they will do under current law, and it clearly says that the “reform” legislation in its present form will not significantly reduce health insurance premiums compared to current law. If premiums are set to “skyrocket out of control” under present law, then they will “skyrocket out of control minus 3%” under the reform. At best.

There’s little question that the legislation will extend insurance to 30 million people who don’t presently have it, and that is a worthy goal. It may very well be worth 2400 pages of legislation and the expenditure of $900 billion. We’re not going to add that to the national debt, but we are going to spend it. I support the goal, and would not argue with passage of this bill pursuant to that goal, but I would prefer that we do it in a more direct and less unwieldy manner.

But let’s be honest about what the “reform” does; it does not reduce health care costs. The CBO report clearly says that it does not reduce health care costs; that at best it slows the growth of health care costs by 3%. It does not prevent the increase of health insurance cost; at best it slows the growth of health insurance cost by 3%.

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