President Obama has repeatedly signaled he would not support a health care reform bill unless it includes long-term cost savings. He recently promised to “take on key causes of rising [health care] costs – saving billions while providing better care to the American people.”
But will the current health care reform proposals actually curtail costs? Recent estimates from the non-partisan Congressional Budget Office (CBO) say no. The 10-year price tag for the House version currently stands at $1.3 trillion.
The Obama Administration does not refute the fact that health care reform will come with an expensive near-term cost; rather, it claims that such costs are actually an investment in exchange for long-term savings. Unfortunately, this assertion has a key problem. At present, not one of the health care proposals has been officially scored by the CBO over a period greater than ten years. In fact, nearly all important pieces of legislation signed into law with long-term budget implications are passed without a long-term CBO scoring. This must change, because as we know from the other health care entitlements – Medicare and Medicaid – their total cost will more than double over the next forty years.
For example, when the Medicare Part D drug benefit was passed, the five-year cost that was voted on was $409 billion. The long-term present-value cost exceeds $9 trillion today. If we’re going to have a serious conversation about health care reform and the long-term health of our economy, we have to look outside a ten-year window.