The cost of not enacting health care reform

By Linda J. Bilmes and Rosemarie Day | November 7, 2009

MUCH OF the health care debate is focused on whether the country can afford the $850 billion the Congressional Budget Office estimates it will cost. The debate centers on whether the bundle of new taxes, credits, efficiencies, and Medicare spending cuts will be sufficient to offset the new spending so as to deliver health care reform without, in President Obama’s words, “adding a dime to the federal deficit.’’

This debate misses the point. It assumes that doing nothing will cost nothing. It turns out that not expanding health insurance is a pretty costly option, because uninsured people impose big financial and economic costs that are not properly appreciated.

The key question is: what difference does it make if you have health insurance? Several major medical studies have determined that people with health insurance have lower death rates compared to the uninsured, fewer medical ailments, and better all-around health. This means more individuals contribute to the economy for longer. Not having health insurance means these economic benefits are lost.