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The cost of doing nothing

Just a reminder, as the health care reform battle lurches towards the finish line, that doing nothing is not a viable option.

A week after a Texas agency reported health care reform legislation would cost the state’s Medicaid program an extra $20 billion over the next 10 years, a non-partisan foundation says inaction will exact a greater price.

In a study [issued Tuesday], the Robert Wood Johnson Foundation projects that by 2019, Texas’ ranks of uninsured, public program spending and individual and employee health care expenses will balloon if reform isn’t passed.

“People worry about losing what they have now, but they need to remember that what they have now is likely to change,” said Bowen Garrett, a senior researcher with the Urban Institute’s health policy center, which conducted the study for the foundation. “Many who have employee-sponsored insurance will lose it as health care costs go up, and those fortunate enough to keep their plans will pay higher out-of-pocket costs or earn smaller wages as employers decide whether to cut on wages or benefits.”

The study, which estimates how coverage and cost trends would change from now to 2019 if health care isn’t reformed, found out-of-pocket expenses could increase by more than 35 percent in every state. It found middle-class working families would be hardest hit.

The full report is here. The Contrarian sums it all up.

I pointed out last week the flaw in this argument. Yes, expanding health coverage for millions of Texans will cost the state a lot of money — but it will also save a lot of money for county governments, which are paying much of the $7 billion a year in uncompensated care for Texas’ uninsured. (A lot of the cost for uncompensated care arises from people who lack health insurance showing up at emergency rooms in public hospitals — the single most expensive place to receive treatment.)

So health reform isn’t really new spending. It’s a cost shift: state government spends more, counties spend less.

[…]

If those projections are correct, maintaining our current health care system would cost Texans (especially local governments) a total of roughly $100 billion worth of uncompensated care for the uninsured in the next decade.

For the moment, let’s leave out the moral issue of providing Texans with health insurance and adequate health care.

Looking strictly at the economics: doing nothing would cost us roughly $100 billion.

So even if Perry is correct — that the Baucus plan would cost the state $60 billion by 2019 — doing nothing would be more expensive.

Seems like a pretty simple choice to make. Unless of course you’re one of those politicians who claims to be concerned about costs while doing nothing to address them.

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