Cheap Health Care Not So Cheap After All

Peter Suderman | July 2, 2009

Did the Senate Health, Labor, Education, and Pensions (HELP) Committee figure out a way to provide most Americans with health insurance coverage for a lot less money than anyone thought possible? That's what a quick read of some news items seems to suggest. But it's not exactly true.

The AP is reporting that the HELP committee has brought the CBO score of their revised health-care bill down to $600 billion, and that the new bill will cover 97% of America's legal population. The first version of the bill was scored at $1 trillion, and was projected to only cover about 16 million people.

But as The New Republic's Jon Cohn notes, the new numbers are somewhat misleading. The expanded coverage numbers aren't possible unless you also factor in an expansion of Medicaid that isn't included in the $600 billion price tag — an expansion that will probably raise the total cost to between $1 and $1.3 trillion. So it's incorrect to say that the bill would cover most Americans for only $600 billion.

Cohn says the outlays will be deficit neutral, but as the Spectator's Phil Klein points out, there's considerable disagreement over how to raise the revenue to pay for all of this. And of course, there's always the Senate Finance Committee, which is in the midst of revising its health-care reform bill, to think about too.

The obvious upshot of all this is that it'll put a solid wind in the sails of a reform movement that's been roughing fairly stormy waters for the last two weeks. But some of the reform movement's newfound energy will no doubt come from excitement about numbers that don't tell the whole story.

Elsewhere at Reason, John Stossel argues that there's no such thing as free health care.