Dr. Steve Parente Testifies Before Congress On $4 Trillion It Would Cost Over 10 Years To Cover "Nearly" All Without Health Insurance

Dr. Steve Parente is a health economist from the University of Minnesota and a principal in a health care consultancy, HSI Network LLC. His areas of expertise are health insurance, health information technology and medical technology evaluation. At the University of Minnesota, he is the Director of an MBA specialization in the medical industry and a professor in the finance department with an adjunct appointment at the Johns Hopkins School of Public Health.

He told a Senate Subcommittee during a health hearing that "there are two things people most want to know from these proposals. One, how many uninsured will be covered? Two, what will it cost the nation in one year and in ten years? HSI estimates, like CBO’s recent results, find there is no free lunch to expand health insurance coverage. Our early assessment of the Senate Finance committee proposal shows a 74% reduction in the uninsured with a 10 year cost of $2.7 trillion using public option plan modeled after the Massachusetts Connector. We also modeled an FEHBP version of the public plan and got a cost of over $1.3 trillion, but with a 30% reduction in the uninsured. CBO scored the Kennedy Bill last week at approximately a 30% reduction for 1 trillion over ten years. Using the ARCOLA model, we found nearly everyone would be covered if all elements of the Kennedy bill were enacted at a ten year cost of 4 trillion. That 4 trillion estimate over 10 years assumes a public option plan with Bronze, Silver and Gold levels in the proposed insurance exchange with a subsidy for premium support that is income-adjusted and calibrated for assistance at the Silver level. The Silver level is equivalent of PPO plan with medium levels of generosity, something with 15% coinsurance rate, manageable copays and average level of access to physicians and hospitals. We accounted for the public plan being reimbursed at 10% above Medicare reimbursement, which is also 10% below commercial insurance premiums."

Remember to take into account that often the cost estimates turn out to be substantially lower than the actual costs of the government program. That was exactly the case with Bush's prescription drug benefit for senior citizens. These numbers are staggering. America simply cannot afford this price tag. Bankrupting America should not be on any politician's agenda, but it seems to be the central issue for the Democratic Congress and White House.
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