Hidden In Plain Sight

by William Galston | July 15, 2009

Overlooked--or at least underplayed--in the first wave of commentary about the House of Representatives' health care proposal is its real long-term cost, as estimated by the CBO on July 14. Although the total price-tag for the 2010-2019 decade is "only" $1.042 trillion, the major features of the proposal don't kick in until the fourth year. In effect, we get only seven years of the program within the ten-year window, for an average net cost per year of about $150 billion.

On closer inspection, the fiscal impact appears even larger. The CBO projection implies that full implementation would not occur until 2015. The average net cost per year of the five full implementation years (2015-2019) is $172 billion. And finally, costs rise swiftly within that five year period, from $141 billion in 2015 to $202 billion in 2019--roughly 9 percent per year, compounded.

The Massachusetts-style reform template that is shaping proposals in both the House and Senate has the virtue of making the costs of near-universal coverage more transparent than did the Clinton-era approach. In the coming months, Congress, the White House, and the American people will have to decide whether they can live with legislation that focuses so heavily on coverage while giving such short shrift to meaningful cost control.

Source URL: http://www.newrepublic.com//blog/william-galston/hidden-plain-sight