Sunday, March 01, 2009

A Down Payment on Health Care Reform

You may have heard that President Obama's budget proposal includes a $630 billion "down payment on health care reform." What does that mean? As far as I can tell, the $630 billion is just a placeholder for potential spending as part of health care reform, the shape of which is unclear right now.

This could be smart. When Congress debates different health care proposals, cost might be less of an issue, since this pot of money will already have been set aside. But other than that, this "down payment" seems meaningless.

Here is what the budget propals says about the "down payment":
The Budget establishes a reserve fund of more than $630 billion over 10 years to finance fundamental reform of our health care system that will bring down costs and expand coverage. The reserve is funded half by new revenue and half by savings proposals that promote efficiency and accountability, align incentives toward quality, and encourage shared responsibility. In addition, the Budget calls for an effort beyond this down payment, to put the Nation on a path to health insurance coverage for all Americans. However, additional funding will be needed. This effort must be open, and must consider all kinds of approaches as part of this process. Some major strides have already been made in the American Recovery and Reinvestment Act of 2009 [AKA the stimulus bill], including $19 billion for health information technology, $1 billion for comparative effectiveness research, and subsidies for the newly unemployed to maintain their health insurance. These initiatives put the Nation on the path toward health reform.
The key phrase is probably "a path to health insurance coverage for all Americans." That is a rather watered-down goal, in my opinion, leaving a lot of wiggle room.


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