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Coping With the Cost of Health Care - How Do We Pay for What We Need?

As with all of the NIF issues guides, three or more approaches are offered for discussion, each of which represents a different point of view.

Problem statement: The questions we must address are: How can we get the health care we require, in the face of rising costs? How can we pay for what we need?

Approach 1:  Reduce the Threat of Financial Ruin. The costs of illness make people feel vulnerable, with no control over their future. They worry they may be wiped out by medical expenses.

Approach 2: Restrain Out-of-Control Costs. When faced with the prices of drugs, insurance, and medical services, people say they are being ripped off. Prices are out of control.

Approach 3. Provide Coverage as a Right. High costs mean that some Americans have to choose between eating and taking their medicine. In the wealthiest nation on Earth, everyone ought to have health care.

Resources for the Forum:

Forum Agenda (Microsoft Word document)

Issue Book - Coping with the Cost of Health Care: How Do We Pay for What We Need?  (Please read at least the "In Brief" and "Comparison of Approaches" prior to the forum.)

The Obama Administration's Official Health Care Reform site.

Non-partisan sources of information:

The Committee for a Responsible Federal Budget (CRFB) has a series of reports that are balanced in approach (Highly Recommended):

  1. The Need to Reform Health Care Does Not Displace the Need to Reform Other Areas of the Budget

  2. Health Care Reform is a Continuous Process and Will Require Continued Vigilance from Policymakers

Go to the The Committee for a Responsible Federal Budget website for papers on principles 4 and 5 which may be published after this page has been updated.

CRFB Urges Focus on Controlling Health Care Costs, July 29, 2009. If the Reform bill does not control health care costs, one of the major reasons for having a bill will not be accomplished. This report distinguishes "cost neutral" vs. "deficit neutral", and take the position that simply having a deficit neutral bill by raising taxes is NOT sufficient.

Health Care and the Federal Budget This is a July 21, 2009 release from the Committee for a Responsible Federal Budget that is very informative (and sobering!).

WARNING: Beware of Budget Gimmicks in Health Care Reform, July 20, 2009. Another excellent source of info from the CRFB, to try to keep the pols honest in Washington.

Options to Pay for Health Care Reform, July 8, 2009. Another from the CRFB.

The Long Term Budget Outlook, June 29, 2009 This CRFB release focuses on the Congressional Budget Office's Long-Term Budget Outlook, and places the cost for Health Care Reform in a larger "big picture" context.

Special Report: Fixing Health Care. Tapping the rich to pay for . . . everything?  This Money.CNN.Com July 15 report questions whether the proposed source of funds to pay for the additional costs of providing health care to more people is a viable option, particularly when it is the favorite source to pay for several other budget deficit problems.

Health reform bills won't reduce costs: Congressional Budget Office director tells Senate panel that 2 health reform bills would increase government spending and not do enough to contain costs. This Money.CNN.com July 16 report quotes Congressional Budget Office Director Douglas Elmendorf as saying,

"The creation of a new subsidy for health insurance ... would by itself raise federal spending on health care. ... [T]o offset that there have to be substantial reductions (on the tax or spending sides of the ledger]," Elmendorf told the Senate Budget Committee. "The changes we've looked at so far don't represent the fundamental change on the order of magnitude that would be necessary."

Congressional Budget Office Several studies that are on point.

The federal budget is on an unsustainable path, primarily because of the rising cost of health care.

Projected Federal Spending Under One Fiscal Scenario
(Percentage of gross domestic product)

This figure, an area chart, shows federal spending from 1962 through 2082 for one scenario for Medicare and Medicaid, Social Security, and all other programs (excluding debt service). Most prominently, net federal spending on Medicare and Medicaid rises from 4% of gross domestic product in 2007 to almost 20% in 2082.

"According to CBO’s and JCT’s assessment, enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period. That estimate reflects a projected 10-year cost of the bill’s insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those10 years." H.R. 3200, America's Affordable Health Choices Act of 2009, July 17, 2009. Cost estimate for the bill as introduced on July 14, 2009.

"Three Key Attributes for Financially Sound and Effective Health Reform" Altarum Institute's Distinguished Scholars and Research Directors have released research addressing the three critical attributes Altarum believes must be addressed in health reform to achieve financial stability and better health outcomes for all Americans. They report that three attributes -- health care innovation, health and wellness, and health equity -- are fundamental to truly systemic reform and fiscal sustainability of the health care system. Their three reports offer some of the basic principles for policymakers to consider as well as suggested directions for further research.

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