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babylonsister Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-07-09 12:27 PM
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The cost of not enacting health care reform

The cost of not enacting health care reform
By Linda J. Bilmes and Rosemarie Day

MUCH OF the health care debate is focused on whether the country can afford the $850 billion the Congressional Budget Office estimates it will cost. The debate centers on whether the bundle of new taxes, credits, efficiencies, and Medicare spending cuts will be sufficient to offset the new spending so as to deliver health care reform without, in President Obamas words, adding a dime to the federal deficit.

This debate misses the point. It assumes that doing nothing will cost nothing. It turns out that not expanding health insurance is a pretty costly option, because uninsured people impose big financial and economic costs that are not properly appreciated.

The key question is: what difference does it make if you have health insurance? Several major medical studies have determined that people with health insurance have lower death rates compared to the uninsured, fewer medical ailments, and better all-around health. This means more individuals contribute to the economy for longer. Not having health insurance means these economic benefits are lost.

A number of studies confirm the significance of this impact. For example, a landmark study by the Institute of Medicine estimated that 18,314 Americans between 25 and 64 die each year because of a lack of health insurance. These deaths are largely because of failures to diagnose illness and to limited access to good quality care. However, that study was based on data from 1993. A new study, to be published in the December issue of the American Journal of Public Health, puts the number of deaths among Americans between the ages of 18 and 64 associated with lack of health insurance at 44,789 a year.


All the different health care bills being discussed in Congress would result in a significant increase in the number of Americans with health insurance. In Massachusetts, the combination of mandatory health insurance for individuals (with penalties for noncompliance and subsidies for those who cant afford it), requirements for businesses to contribute to health insurance, and a health insurance exchange that helps people find insurance - core characteristics of all the proposed bills - has more than halved the number of residents without health insurance. Any serious health reform bill should be able to do the same.

Without health care reform, the economic cost imposed by premature deaths and avoidable illnesses will continue to grow, to the detriment of the economy. As it enters the final debate on health care reform, Congress needs to weigh carefully the substantial cost of doing nothing.

Linda Bilmes is a faculty member at the Harvard Kennedy School, where she teaches public finance. Rosemarie Day is deputy director of the Commonwealth Health Insurance Connector Authority of Massachusetts.
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