Opinion: No Big Rock Candy Mountain for Health Care Reform

(Sept. 10) -- Remember all that talk about how health care reform would lower national health care costs, make health insurance more affordable and cut out-of-pocket spending, while expanding coverage to millions of uninsured?

Turns out that that promise actually was too good to be true.

A report out this week from federal health care number-crunchers at the federal Center for Medicare and Medicaid Services (CMS) shows that under health care reform, national health care spending will be higher than if there had been no reform, out-of-pocket costs for many will go up and 24.4 million will still be uninsured by 2019.

Source: Centers for Medicare and Medicaid Services.

Health care costs will rise faster with reform than without. (Projected health spending, minus Medicare.)

Cost savings? A key goal of health reform was to "bend the cost curve" for health care -- which everyone agrees is currently on an unsustainable growth path. But the CMS report finds that national health spending will climb faster under reform. As a result, in 2019 health care will account for 19.6 percent of the national economy, up from 19.3 percent without reform (health care currently accounts for 17.5 percent of gross domestic product).

And even that assumes the deep cuts in Medicare actually take place, which an earlier CMS report said was "unrealistic."

Absent those phony Medicare savings, national health spending will be $175 billion higher in 2019 with reform than without it. (See chart above.)

Spending per person will also be higher under reform, the report says. For those with private health insurance, for example, per-capita spending will be almost 8 percent higher in 2019 under health care reform. That's not likely to translate into lower premiums.

Lower out-of-pocket costs? The report also finds that out-of-pocket costs will climb faster in 2018 and 2019 with reform than without, "as employers are expected to scale back the generosity of the coverage they offer to minimize their exposure to the excise tax [on] high-cost insurance plans."

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Universal coverage? And while it's true that reform will cut the number of uninsured by 32 million in 2019, it will still leave more than 24 million without coverage. And most of the newly insured (62 percent) will be getting coverage through Medicaid -- the government insurance program for the poor -- not through one of the highly touted new private options.

None of this is to say that the reform plan isn't a good idea, or that it isn't worth spending more money to cover more people.

But from the looks of it, reform won't come anywhere near delivering a health care paradise.