May 26, 2009 3:16PM # How Much Will Universal Coverage Cost? By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE President Barack Obama has declared that his goal in [health care reform](https://www.cato.org/pub_display.php?pub_id=10218) is “[expanding coverage to all Americans](http://www.barackobama.com/pdf/Obama08_HealthcareFAQ.pdf).” So what’s the price tag on [universal coverage](https://www.cato.org/?s=anti+universal+coverage+club)? [Some reformers](https://www.cato.org/?s=church+of+universal+coverage) are [throwing around](http://www.tnr.com/politics/story.html?id=b8f7b0c6-8f56-4e24-9168-f89b5852544e&p=1) numbers like $1 trillion or $1.5 trillion. But according to the Urban Institute, the cost would be closer to $2 trillion. Jack Hadley and his colleagues [estimate](http://content.healthaffairs.org/cgi/content/abstract/27/5/w399), “If all uninsured people were fully covered \[in 2008\], their medical spending would increase by $122.6 billion.” If we assume that the cost of covering the uninsured will grow at the same rate the federal government [assumes](http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2008.pdf) for all health spending growth (6.2 percent), then from 2010 through 2019, the cost of covering the uninsured would be $1.8 trillion. That’s at a minimum. According to Hadley et al., their estimate “is neither the cost of a specific plan nor necessarily the same as the government’s costs, which could be higher, depending on plans’ financing structures and the extent of crowd-out.” Crowd-out is like collateral damange. When you’re dropping money from the sky, some will inevitably strike innocent bystanders (i.e., the insured). To ensure you hit the *uninsured* with $122.6 billion, you need to drop a lot more than that amount. Thus the full cost of covering the uninsured would be closer to — and possibly well over — $2 trillion. ##### Related Tags [Health Care](https://www.cato.org/health-care) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).