I talked a bit yesterday about how the country's worsening financial picture will make social investment -- and in particular, health reform -- trickier. The working assumption on heath care was that you'd basically spend a lot of money to cover the uninsured and implement some new structures, and that would help you do cost control later. Increasingly, however, it doesn't look like the money will be there. This is a problem for plans like Obama's, which needs somewhere in the neighborhood of $80 billion in new federal dollars. That's going to be hard to find. Coincidentally, a new Lewin analysis of the costs of Ron Wyden's Healthy Americans Act came out this morning. And the news is rather good. The Congressional Budget Office, of course, has already declared the legislation revenue positive. "Our preliminary analysis indicates that the proposal would be roughly budget-neutral in 2014," said the CBO. "That is, our analysis suggests that your proposal would be essentially self-financing in the first year that it was fully implemented. That net result reflects large gross changes in federal revenues and outlays that would roughly offset each other...For the years after 2014, we anticipate that the fiscal impact would improve gradually, so that the proposal would tend to become more than self-financing and thereby would reduce future budget deficits or increase future surpluses."That's the macro picture. The Lewin analysis looks at the micro picture: How will the legislation affect the finances of most families? "The HAA on average reduces family out-of-pocket spending for health care among currently insured Americans with incomes below $150,000. In fact, families with incomes below $150,000 per year would on average see a net reduction in spending." And nor would those savings come because the plans would be stingier. "The plan reduces out-of-pocket spending for health services by guaranteeing that all families have access to coverage that is at least as comprehensive as the plans offered to federal workers and members of Congress. In fact, we estimate that the standard coverage option offered to members of Congress would represent an improvement in coverage for about 60 percent of workers who now have employer coverage." And hey, there's even a graph:
As you can see, the financing is heavily progressive. This is the basic tradeoff of health reform, by the way. You can save money by restructuring the system. There's nothing efficient about routing health dollars through self-insured employers and the individual market and a patchwork of government programs and employers contracting out to private insurers and the government contracting out to private insurers. Integrating the system can go a long way in controlling costs. But it also means change. Unlike in the Obama plan, Wyden can't say, "if you're happy with your health care, you can keep it." Under his proposal, there's real change. And for all that politicians like to talk about change, they don't like to vote for it.
As you can see, the financing is heavily progressive. This is the basic tradeoff of health reform, by the way. You can save money by restructuring the system. There's nothing efficient about routing health dollars through self-insured employers and the individual market and a patchwork of government programs and employers contracting out to private insurers and the government contracting out to private insurers. Integrating the system can go a long way in controlling costs. But it also means change. Unlike in the Obama plan, Wyden can't say, "if you're happy with your health care, you can keep it." Under his proposal, there's real change. And for all that politicians like to talk about change, they don't like to vote for it. 
