PricewaterhouseCoopers LLP (PwC) projects that President-elect Barack Obama's proposed reform of the U.S. health system would cost the federal government $75 billion in 2009 dollars, the equivalent of $2,500 per newly insured person. The plan as it stands now
would extend health insurance coverage to 95 percent of all Americans, including two-thirds of those currently without insurance.
According to the report, approximately $25 billion, or one-third of the cost of the Obama proposal, could come from existing funding for the uninsured, much of which now goes to hospitals for uncompensated care.
Some of the key findings identified in the report include:
- The reforms proposed by Obama are aimed primarily at increasing access to quality and affordable health care. Assuming full implementation of his plan in 2009, the budgetary costs would grow from about $75 billion in the first year to an annual total of $130 billion by 2018. The cumulative cost over 10 years would be more than $1 trillion.
- Approximately $48 billion, two-thirds of the $75 billion, would be spent on covering the uninsured, according to Price-waterhouseCoopers' analysis. However, not all of those who would receive subsidized coverage under the new plan would have been previously uninsured. PwC estimates that 4.5 million people who have health insurance today are likely to trade their current plans for the new government-subsidized plan proposed by Obama. According to PwC's estimates, increased subsidies for the previously insured would represent approximately $27 billion of the $75 billion cost of the Obama plan.
- Of the 30 million Americans who would be newly insured, nearly 40 percent would obtain coverage through their employer, a reversal in the current decline of employer-based coverage. Most of the gains in coverage are likely to come from small employers.
- PwC estimates that 13.1 million previously uninsured individuals would obtain insurance coverage with the help of government subsidies, either in the non-group market or through Medicaid.
