Prepared for: The Peter G. Peterson Foundation

By John Sheils and Randy Haught
The Lewin Group
December 7, 2009

Impact on National Health Spending

Both bills would result in an increase in administrative costs. These include the cost of administering private insurance to newly covered people, the cost of administering coverage under Medicaid and the cost of processing eligibility for premium subsidies under the bill.

Both bills would result in a substantial growth in national health expenditures. Total health spending over the 2010 through 2029 period would increase by $781 billion under the Senate bill and $955 billion under the House bill.

http://www.pgpf.org/resources/lewin-senate-house-comparison.pdf

Comment:

By Don McCanne, MD

What is health care reform going to cost us? To help answer this question, numerous reports have been generated by the Congressional Budget Office (CBO), the Office of Management and Budget (OMB), the Office of the Actuary of the Centers for Medicare and Medicaid Services (CMS), the Council of Economic Advisers (CEA), private foundations, and numerous consulting firms representing the private insurance industry.

Although politicians are using sections of these reports selectively to advance their own agendas, if you read all of the reports you cannot escape the conclusion that the measures designed to slow the growth in health care costs do not begin to offset the anticipated increases in spending. Further, they show that an unacceptable number of individuals will remain amongst the ranks of the uninsured.

This new, highly credible report (credible in spite of ownership by UnitedHealth) by John Sheils and Randy Haught draws the same conclusions. National health expenditures will increase over the amounts projected were there no reform, and about 20 million people will still be uninsured.

One comparatively small number in this report is that administrative costs will increase by about $87 billion in the next decade under either the Senate or the House bill. But this number has much greater significance than the amount would suggest. Not only is this an additional cost, it also adds on to the $4,000 billion in administrative waste that we could recover in the next decade if we merely changed to a single payer system of financing health care. That would free up enough funds to cover our nation’s unmet health care needs.

Comparing the Cost and Coverage Impacts of the House and Senate Leadership Health Reform Bills: Long Term Costs for Governments, Employers, Families and Providers

Prepared for: The Peter G. Peterson Foundation

By John Sheils and Randy Haught
The Lewin Group
December 7, 2009
Impact on National Health Spending
Both bills would result in an increase in administrative costs. These include the cost of administering private insurance to newly covered people, the cost of administering coverage under Medicaid and the cost of processing eligibility for premium subsidies under the bill.
Both bills would result in a substantial growth in national health expenditures. Total health spending over the 2010 through 2029 period would increase by $781 billion under the Senate bill and $955 billion under the House bill.
http://www.pgpf.org/resources/lewin-senate-house-comparison.pdf

What is health care reform going to cost us? To help answer this question, numerous reports have been generated by the Congressional Budget Office (CBO), the Office of Management and Budget (OMB), the Office of the Actuary of the Centers for Medicare and Medicaid Services (CMS), the Council of Economic Advisers (CEA), private foundations, and numerous consulting firms representing the private insurance industry.
Although politicians are using sections of these reports selectively to advance their own agendas, if you read all of the reports you cannot escape the conclusion that the measures designed to slow the growth in health care costs do not begin to offset the anticipated increases in spending. Further, they show that an unacceptable number of individuals will remain amongst the ranks of the uninsured.
This new, highly credible report (credible in spite of ownership by UnitedHealth) by John Sheils and Randy Haught draws the same conclusions. National health expenditures will increase over the amounts projected were there no reform, and about 20 million people will still be uninsured.
One comparatively small number in this report is that administrative costs will increase by about $87 billion in the next decade under either the Senate or the House bill. But this number has much greater significance than the amount would suggest. Not only is this an additional cost, it also adds on to the $4,000 billion in administrative waste that we could recover in the next decade if we merely changed to a single payer system of financing health care. That would free up enough funds to cover our nation’s unmet health care needs.