Study Warns of "Significant" Cost Impact of Government-Run Health Plan

May 12, 2009 ( - A new analysis of one proposed route to health-care reform found a new government health insurance plan could significantly jack up costs for those still in private insurance plans.

A news release from the HR Policy Association, which completed the analysis with the Applied Economic Strategies (AES), found that a new government plan that reimburses health care providers at current Medicare rates would create a “significant” increase in health costs, ranging from $43 billion to $124.5 billion per year. The costs depend on how many people enroll in the government program and how many opt to remain in insurance on the private market, the study said.

“We share Congress and the President’s commitment to health care reform and providing coverage to millions of uninsured Americans,” said Johnna G. Torsone, Executive Vice President and Chief Human Resources Officer of Pitney Bowes Inc., and chair of HR Policy Association’s Health Care Policy Committee, in the news release. “The best way to accomplish these goals is to create a value-based system that addresses the inefficiencies, gaps in quality, and workforce shortages that plague our health care system.”

The analysis is available here .