The Debate over Health Care Reform Costs

December 2, 2009

In a media breakfast this morning, White House Office of Management and Budget Director Peter Orszag emphasized the fiscal responsibility of Senate health care reform legislation under debate. “The bottom line is the bill that is currently on the Senate floor contains more cost containment … than any bill that has ever been considered on the Senate floor. Period,” Orszag said.

David Coates, political science professor at Wake Forest University and a frequent speaker on health care reform agrees that there is no reason to panic about costs.  “Particularly in the context of this week’s CBO report that, far from escalating medical costs over the long period, the Senate bill could significantly reduce costs for many of those who now buy their own health coverage, and do so without adding to the costs of employer-provided coverage. The CBO actually thinks that, if the legislation passes as drafted, 60 percent of those buying their own insurance would qualify for federal assistance covering probably two-thirds of the costs.”

Coates adds that Republican politicians and think tanks continue to float other numbers. Cohan, Hubbard and Kessler, for instance, yesterday morning claimed that higher demand for health coverage will likely increase premiums for the typical family plan by about 10 percent (The Economists Voice, November); and Senators Grassley and McConnell quickly seized on the CBO prediction that unsubsidized premiums in the individual insurance market will rise by between 10 and 13 percent. “What they didn’t seize on with the same speed and enthusiasm is the likely improved content of those insurance policies and the heavy subsidization of their purchase by hard-pressed American families,” Coates says.

You can follow David Coates on Twitter at


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