Anyone who claims to know how much the health care law will cost is missing one big piece of information: the exact cost of the benefits.
They can’t know it, because the benefits package is still being worked out, and its final shape will determine whether the Congressional Budget Office estimate was in the ballpark or not even close. Starting in 2014, all health plans offered through the state health insurance exchanges will have to offer the “essential health benefits package” — a set of minimum services all individuals and small businesses are supposed to have in their coverage. That package will have a direct impact on the cost of the law, because people will get subsidies to help them buy coverage if they can’t afford it on their own.
Make the benefits package too stingy, and consumer advocates will say the law failed in its goal of protecting people from big gaps in coverage. Make it too generous, though, and the premiums for those plans will go up — and the federal government will have to spend that much more on the subsidies.
If that happens, the CBO projections that the law will pay for itself — and actually reduce the deficit by $143 billion over 10 years — might underestimate the actual costs. That’s critical, because Democrats are making so much of the CBO’s estimate that the law will reduce the deficit while Republicans suggest it will actually drown the nation in red ink.
Or the higher premiums could just scare people away from buying coverage and make them decide the fines under the individual mandate would be cheaper. In that scenario, there wouldn’t be as many subsidies to pay — but not as many newly insured people, either.
The law doesn’t try to spell out the exact package. Instead, it lists several categories of benefits and leaves it to the Department of Health and Human Services
to figure out exactly what to cover within those categories and what kind of limits the coverage should have. So the exact cost of the package won’t be known until HHS makes those decisions.
But even though the committee [put together by the institute of medicine] is keeping a tight lid on its deliberations — with strict orders to members not to make even general comments about the trade-offs they face — the institute’s report won’t actually recommend what should be in the package. All it will do is suggest what HHS officials should think about when they design the package