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Health Care Reform Solved? Check My Math

October 20, 2009

The Federal Government spends roughly $2.98 Trillion dollars per year.  The question is:  What percent reduction in federal spending is required to provide health insurance to how many of our uninsured brothers and sisters?  First, we’ll need to assume the average annual cost of an individual health insurance policy.  This is not easy since there are so many factors to consider.  So we’ll assume.  We’ll assume a monthly premium of $500 per month, or $6,000 per year.

If just a 1% reduction in federal spending can be achieved, that’s a savings of just under $30 Billion … every year.  At an annual health insurance cost of $6,000 per individual, that 1% reduction in spending can cover almost 5 million people.  It follows that a 2% reduction in federal spending would cover 10 million currently uninsured.

In an earlier post I estimated there are 12.3 million people in this country that are ever-uninsured, meaning they may face significant financial risk of having a medical emergency that would have to be paid for out-of-pocket.  To provide insurance to those folks, only a 2.5% reduction in federal spending would be needed.  At the other end of the spectrum, there is the widely reported “46 million uninsured in America.”  Using our assumed individual policy rate, federal spending would have to be reduced by nearly 10%.  Now let’s look at the recently proposed Senate Finance Committee health care legislation.  The Congressional Budget Office stated in their analysis last week that the pending legislation would insure 29 million people.  Coincidentally, 29 million is the average of Hugo’s 12.3 million and the oft-cited 46 million.  Whether I’m on to something or off my rocker, covering 29 million of the uninsured would require less than a 6% reduction in federal spending.

Is it too much to ask the federal government to reduce spending, like every other organization, company, township, and person is forced to do these days?  I think not.  In fact, I believe it is their obligation.  Remember these?  “The federal government will lead by example.”  “Yes we can.”  We should all call upon our representatives and urge them to target a 10% reduction in federal spending.  Once achieved, 25% of that amount (or 2.5% of total federal spending) could be used to insure the likely 12.3 million ever-uninsured.  … And then we can all get back to work.

Contact your senators.  Contact your congressman.

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