The Congressional Budget Office (CBO) released a cost estimate of $1 trillion over 10 years for the Democrats’ Senate bill, scheduled to be marked up in the Health, Education, Labor and Pensions (HELP) Committee on July 18. This draft did not include provisions to increase Medicaid eligibility to 150% of poverty, or subsidies to persons earning up to 500% of poverty. It would leave 30 million uninsured (American Spectator, AmSpecBlog 6/16/09).
Adding in these provisions, which would lower the uninsured to less than 1% of the population, would raise costs to $4 trillion, according to calculations by Health Systems Innovations Network (HSI). About 79 million Americans would shift from private to government insurance. There is no mention of removing the tax exclusion for health insurance (worth some $300 billion per year) or of changes to Medicare or Medicaid, except for the need to reduce fraud.
The CBO’s estimate of crowd-out (loss of private coverage) was 23 million. The CBO noted that if enacted the bill would break a key Obama promise that those with private insurance would not be harmed.
Leading Democrats such as Christopher Dodd (D-CT) complained that CBO did not take into account receipts or savings from increased tax revenues as people moved from employment-based to other coverage, payments of penalties by uninsured persons, and reductions in outlays for Medicaid and SCHIP—including reduced payments to physicians. Also the CBO refused to take Congress at its word on savings assumptions, as from prevention.
Dodd told reporters that “reform” would affect 100% of the population. He could not, however, answer questions about the cost. “Contentious issues like a public plan” had been intentionally omitted from the draft submitted to CBO (CNS News 6/17/09).
The New England Journal of Medicine continues to weigh in with frequent articles.
“Some of the most prominent shortcomings of the U.S. health insurance market are rooted in the fact that the system is a voluntary one,” write Linda J. Blumberg and John Holohan in the issue slated for publication on July 2. They favor an individual mandate as the most politically feasible route to universal coverage.
In an update on congressional action dated June 18, John Iglehart notes the accelerated timetable for passing a bill through the House of Representatives by July 31. Neither Republicans nor the 50 Democrats in the House Blue Dog Coalition have participated in the secretive process.
A major issue is whether to eliminate the tax exclusion for employer-sponsored insurance—“the government’s third-largest health insurance expenditure (after Medicare and Medicaid).”
Iglehart also writes that the committees have yet to grapple seriously with the issue of what to do about the 21% reduction in physician Medicare fees scheduled for next January.
After the table-setting, the congressional posturing, and the Long Tease (the current stage) comes the scrum, writes New York Times columnist David Brooks. “You want the scrum to be quick before some of the interest groups realize they’ve been decapitated.”