NCPA - National Center for Policy Analysis


August 3, 2009

Universal health care will not save you money, because we're already picking up the tab for the uninsured when they obtain care they don't pay for, says Philip Klein, a columnist with the American Spectator.

By stressing that covering the uninsured will reduce the reliance on free care, President Obama assuages concerns about the cost of achieving universal coverage.  Raising alarm over emergency room costs also fuels the push for mandates requiring that individuals either obtain insurance or pay a fine, says Klein.

However, the government can reduce the costs of uncompensated health care by expanding coverage, but those "savings" are more than offset by the expense of insuring more people, continues Klein:

  • The total cost of uncompensated care at hospitals, physicians' offices and community providers was $56 billion in 2008; while that isn't chump change, it represents only about 2 percent of the nation's overall health care expenditures.
  • By contrast, the cost of the type of health care plan being envisioned by President Obama and Democrats in Congress has been estimated to be in the range of $1.2 trillion to $1.5 trillion over 10 years.
  • So even assuming these uncompensated costs could be completely eliminated through universal health care, it wouldn't come close to covering the cost of increasing coverage.

But, experience at the state level suggests that expanding coverage would cut only a fraction of such costs, says Klein:

  • In 2006, Massachusetts enacted a landmark health care reform, the Commonwealth Care subsidy program, which increased coverage by expanding Medicaid eligibility.
  • Yet, the program is projected to cost $820 million in 2009.

Whatever arguments may be made in favor of universal health care, the idea that it is fiscally prudent does not stand up to close scrutiny, says Klein.

Source: Philip Klein, "The Matter With Myths," American Spectator, July/August 2009.

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