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Healthcare reform: We can pay for it now, or pay more later

Runaway costs and lack of universal coverage are intertwined problems, so we have to address them simultaneously -- and that'll cost some serious coin. But it's worth it.

August 26, 2009|DAVID LAZARUS

Sen. Joe Lieberman is wrong.

He said the other day that we should reconsider healthcare reform until we can get our economic house in order. "There's no reason we have to do it all now," he said.

That seems like a reasonable stance, particularly in light of a White House estimate Tuesday projecting $9 trillion in budget deficits over the next decade.

But Lieberman's play-it-safe strategy could cost us a heck of a lot more over the long run.

"Without reforms, there's no reason to think that healthcare costs won't continue to rise unabated," said Rick Curtis, president of the Institute for Health Policy Solutions, a Washington think tank. "The costs of these reforms will go up considerably."

This is a sentiment echoed by many in the business community, who worry that steady increases in healthcare costs will eat into profits and undermine competitiveness.

"We should not put it off," said Helen Darling, president of the National Business Group on Health, an organization representing large employers that provide coverage for about 50 million workers, retirees and dependents. "We need healthcare reform now."

Extending health insurance to the 47 million people who now lack coverage will be expensive, there's no denying it. Current estimates place the tab somewhere near $1 trillion over 10 years.

But how much more expensive will it be down the road, as the ranks of the uninsured continue to grow and as the cost of treating such people in emergency rooms continues to soar?

What about the growing burden to families as employers increasingly reduce health benefits to control the hit to their bottom line?

How will people with sharply limited coverage handle a major illness or accident?

And as medical costs keep rising, what will happen when millions of baby boomers turn to Medicare for coverage, placing unprecedented strain on a program that's already projected to be trillions of dollars in the hole in coming decades?

"I have problems with the way this whole reform thing is going," said Alan Auerbach, director of the Robert D. Burch Center for Tax Policy and Public Finance at UC Berkeley. "I'd like to see a more explicit explanation of ways that medical costs are going to be controlled, and I'd like to see a more comprehensive way of paying for it.

"But if we don't do anything at all, we're clearly going to be worse off. The problems just get bigger if you don't do anything."

President Obama has said the cost of healthcare reform can be offset by savings elsewhere -- for example, cuts to Medicare. That may be true.

But Washington has never been particularly good at balancing its checkbook, which is why we're now looking at those massive deficits over the next decade. For that reason, I'm not optimistic that healthcare reform can be accomplished without running up additional costs.

And I say: So what?

We've borrowed hundreds of billions to bail out carmakers and banks, not to mention fight a couple of wars, all of which have been justified as necessary for the country's stability and well-being.

So the same argument doesn't apply to something as fundamentally important to every American as healthcare? It's not worth borrowing some more to fix a system that everyone agrees is broken and that will only drive us deeper into debt if left unattended?

"How can we ever have a sensible healthcare system when we have about 50 million people without coverage?" asked Jim Horney, director of federal fiscal policy at the Center on Budget and Policy Priorities, a Washington think tank. "You can't keep costs down as long as you have that."

Anyone who suggests, as Lieberman went on to do, that you can tackle runaway costs first and then worry about covering the uninsured isn't seeing the whole picture.

It's not that one causes the other. Rather, the two problems are intertwined, and that means we have to address them simultaneously -- and that will cost some serious coin.

It's like the mechanic said in those old commercials for Fram oil filters: "You can pay me now, or pay me later."

A trillion dollars over 10 years? We're getting off cheap.

A timely tale

I note Tuesday's reports about the passing of Rose Friedman, widow of Nobel Prize-winning economist Milton Friedman. She was believed to be 98.

After Milton Friedman died in 2006, I wrote a column about the time he and I sat side by side on a televised panel discussion about the economy. It was one of the more intimidating things I've ever done.

But despite his towering intellect and international fame, Friedman turned out to be surprisingly down to earth. I wrote that he was "friendly in a Jewish grandpa sort of way, like you half-expected him to reach into his coat pocket at any moment and produce a piece of candy."

I also observed that for a guy of his stature, Friedman wore a really crappy watch, one of those cheap Casio jobs with a built-in calculator. I surmised that he was a man who didn't care how things appeared, just that they worked.

The next day, I received an e-mail from the Friedmans' daughter letting me know how much her mom had been touched by my recollections. A few days later, an envelope arrived at my desk.

It contained a very nice note from Rose Friedman -- and Milton Friedman's watch. A class act, those Friedmans.

And the watch, which I had framed along with Rose's note, is still working.

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David Lazarus' column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

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