HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Thursday, October 8, 2009

Health Care Bill Gets 'Cost Analysis Green Light' by Congressional Budget Office

The non-partisan Congressional Budget Office released its much-anticipated report on the Senate Finance Committee legislation to revise the Health Care System reports the New York Times, The Washington Post, Los Angeles Times, BBC and The Wall Street Journal. The cost analysis demonstrated that the bill will reduce deficits by a total of $81 billion over the next 10 years while providing health insurance to 29 million uninsured Americans.

According to the NYT:

The report clears the way for the Finance Committee chairman, Senator Max Baucus, Democrat of Montana, to push for a panel vote within the next few days, and sets the stage for Democrats to take legislation to the floor for debate by the full Senate this month.

As reported by Robert Pear and David Herszenhorn of the NYT, the Budget Office Report points to the following as the main costs and coverage additions:  

▪ 29 million uninsured will be covered.

▪ 25 million, one-third illegal immigrants, remain uncovered.

▪ Portion of non-elderly with insurance will increase over 10 years to 94% from 83% today.

 ▪ A proposed expansion of Medicaid to include an additional 14 million people will add $345 billion to federal Medicaid spending and $33 billion in State Medicaid spending over the next 10 years.

▪ Subsidies to help low and middle income people buy insurance will add $201 billion in federal costs over 10 years.

And here are the main savings and revenue provisions: 

▪ A proposed tax on high-cost insurance policies would raise $201 billion over 10 years.

▪ Penalties of $750 per year would be paid by people who go without insurance would total $4 billion over 10 years (less than the $20 billion expected under the original proposal).

▪ Employers who did not provide health benefits would pay $23 billion in penalties (down from $27 billion).

▪ A Medicare commission would be created, with power to make cutbacks in the program, unless blocked by subsequent legislative action which would save $22 billion over 10 years.

▪ The bill would establish insurance cooperatives, to compete with private insurers. But the budget office said the co-ops would not establish “a significant market presence in many areas.”

▪ The budget office found that the Finance Committee would reduce payments to private Medicare Advantage plans by $117 billion over 10 years while cutting the growth of Medicare payments to other health providers by $162 billion.


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