Tuesday, April 1, 2014

Costs of Covering The Uninsured

All  are but parts of the stupendous whole.

Alexander Pope  (1699-1744), Epistle

If one believes the primary purpose of ObamaCare has been to cover the uninsured, the cost of insuring the uninsured has been stupendous.  According to the Congressional Business Office and others, the true cost of ObamaCare through 2022-2025  will approach $2.5 trillion, far above its original estimate of $984 billion. Unfortunately, the Obama administration itself says ObamaCare will still leave 30 million uninsured.  

Uninsured Assumptions

If  one assumes 50 million were uninsured at ObamaCare’s onset 4 years ago, on March 23, 2010, and the law would still  leave 30 million uninsured (a consensus assumption),  that would mean the law will rescue 20 million from the uninsured ranks over the next 10 years.  By logical extension, the cost of  covering the uninsured, at the stupendous  price of turning the entire health system upside down,  would be $2.5 trillion/20 million, or  $125,000  for each uninsured person insured.

Covering Uninsured – The First Four Years

If $125,000 sounds high, consider ObamaCare’s performance so far.   It is estimated that the law in its first 4 years has insured 8.6 million of the uninsured -  4.5 million in Medicaid,   3.0 million young people up to 26 covered under their parents’ plans, and  1.1 million so far enrolled in the ObamaCare's state and federal health exchanges.   

At what cost? If one assumes the $2.5 trillion cost over the next 10 years is correct, that would amount to $2.5 billion a year,  or $10 billion over the first  4 years,  or  $10 billion/8.6 million newly insured, or $116,279 per each uninsured insured.

Too High a Price to Pay?

Is this too high a price to pay?  Charles Krauthammer, MD, a critic of  ObamaCare, thinks it is when one considers the price entails overhauling the entire U.S. health system, turning it upside down, and slowing growth for the economy as a whole.

Krauthammer's reasoning goes like this.
"On these exchanges, you've got to ask yourself the price we have paid, the estimate is 1 to 1.5 million of these people were uninsured before. The whole idea was insuring the uninsured. So that's going to leave about 40 million uninsured. And for that, we have to cancel 6 million policies? And for that millions of people have lost their doctors and their hospitals and for that people in northern New Hampshire have to drive past the two best hospitals in the state all the way to the south because the two hospitals in the north aren't covered? "

Health spending now runs $2.7 trillion per year,  or roughly 1/6 of America’s $16.5 trillion economy, which is now running a national debt of $17.5 trillion.  These numbers dwarf  the $ 120,000 X 30 million left-over uninsured  that would be required to erase America’s 50 million uninsured.  

Oh well, to paraphrase the late Senator Everett Dirksen (1896-1969),  a trillion here, a trillion there, and pretty soon we’re talking about real money.

Healthcare.gov and PR Promotion of Health Exchanges

Speaking of real money, current estimates are healthcare.gov  cost the federal government $1 billion and the states $500 million  to build,  and will cost $700  billion for the federal and state governments  to repair plus another $1 billion for the PR campaign and recruiting navigators to sign up enrolleesThis  comes to a grand total of $3.2 billion  to cover 8.6 million newly insured,  or $3,721 for each person now covered who was formerly uninsured. To paraphrase Milton Friedman(1912-2006), there is no such thing as a free launch.

Tweet:   The total cost of covering the uninsured is running over $116,000  for each newly insured person with over $3700  going to cover website and PR costs to promote health exchange enrollments.

1 comment:

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