Blunkett said ID cards would only add a small amount to the cost of projects which are already under way to develop biometric passports - money that would have to be spent anyway to meet international obligations.
His comments at a conference on ID cards at the Institute for Public Policy Research were designed to rebut critics who claimed that the Home Office has failed to establish a clear business case for biometric ID cards, which are due to be phased in from 2007.
"If we are going to incur the cost of setting up a biometric passport, does it not make sense to pay a little extra to have a serious biometric database and have an additional ID card?" he said.
The health service was already working on ways to integrate ID cards into its IT systems to allow doctors to check the eligibility of patients for treatment when they register, Blunkett said.
The Home Office has made significant changes to the biometric ID card programme following a critical report from the home affairs select committee, he said.
The changes included making the purpose of the ID card programme clear in the ID card bill, which is expected to be unveiled in the Queen's speech today (23 November).
"We have agreed to widen the scope of the surveillance commissioner and individuals will be able to check what information is held on them and who has access to data to check their identity," he said.