Cost Questions Could Lead to Further Debate on Health Care Reform

The new health reform law was enacted just over one month ago, but questions over its costs and cost-control mechanisms remain, the AP/San Francisco Chronicle reports.

Some lawmakers and health policy experts contend that while the new law promises to extend insurance benefits to millions of uninsured U.S. residents, it does less to keep costs down.

Experts predict that some health insurance companies might try to implement larger premium increases before the reform law's new industry regulations take effect in the next few years. By 2014, states will be required to expand Medicaid eligibility, and insurers will be prohibited from denying coverage to people with pre-existing conditions.

As more people gain health coverage, demand for health services from the newly insured could increase total spending and place upward pressure on premiums, experts say. In addition, federal experts recently reported that expected long-term savings anticipated through Medicare cuts might be unsustainable.

Although the new reform law creates a new independent Medicare payment commission to develop new savings strategies, it does not initiate a cost control strategy or designate an official to monitor the cost control efforts, the AP/Chronicle reports.

Health Reform 2.0

Observers say the cost-control issue could surface in the form of a second debate on health reform.

Sen. Mark Warner (D-Va.) said, "Now that the baseline question of coverage has been answered, it would be irresponsible if we didn't come back and try to do more on costs," adding that opponents of the law would have to decide "whether they should waste all their energy on repeal or make an effort to do something on cost containment."

Jonathan Gruber, an economist at the Massachusetts Institute of Technology, said, "This bill takes a sort of spaghetti approach to cost control," adding, "You throw a bunch of stuff against the wall and see what will stick. Health care, round two, is when we will make a serious effort at cutting costs down, based on what this law has shown us" (Alonso-Zaldivar, AP/San Francisco Chronicle, 4/25).