CBO on the New Kennedy Health Care Reform Bill 14 comments
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On Thursday evening, the Congressional Budget Office (CBO) released a preliminary analysis of the latest version of Title I of the Affordable Health Choices Act, commonly known as the HELP bill or the Kennedy bill (since it’s the product of the Senate Committee on Health, Education, Labor, and Pensions which Senator Kennedy chairs).
Based on a quick review, here are the top six things I think you should know about the cost estimate:
1. The analysis is preliminary. CBO and the Joint Committee on Taxation have not yet had time to analyze every provision in the bill, some provisions remain in flux, and new provisions may be added. Health policy continues to be a moving target.
2. The headline cost of the bill — about $600 billion over ten years — is significantly lower than the $1 trillion net cost of the previous version of the bill. The net costs declined because (i) the subsidies for coverage through health insurance exchanges are now smaller, (ii) employers would have to pay a penalty if they do not offer insurance to their workers, and (iii) it would be much harder for employees to get subsidies in the exchange if their employer offers health insurance.
Note: The new CBO tables cover Title I of the bill, which has a net budget cost of $597 billion. CBO had earlier scored other portions of the bill as costing $14 billion. As a result, you will hear some commentators using the $597 billion figure and others using $611 billion.
3. As usual, it’s important to unpack the headline cost into its constituent parts: the 10-year cost of expanding health insurance coverage in Title I is about $743 billion and a separate provision adds an additional $10 billion. That $753 billion cost is then partially offset by penalties on employers who don’t offer coverage to their workers ($52 billion), penalties on uninsured individuals ($36 billion), higher income and payroll taxes ($10 billion), and the net premiums generated by a program (CLASS) to provide long-term care insurance ($58 billion). The income and payroll tax offset is much smaller than in the previous version of the bill because the current draft would have a much smaller impact on employer-provided health insurance.
4. The bill includes provisions for a public plan, but CBO concludes that these provisions would “not have a substantial effect on the cost or enrollment projections.” CBO reaches that conclusion because “the public plan would pay providers of health care at rates comparable to privately negotiated rates–and thus was not projected to have premiums lower than those charged by private insurance plans in the exchanges.” In short, the reduced cost of the bill is due to the factors outlined in the previous paragraph, not to the public plan.
5. The bill would reduce the number of uninsured by about 37% by 2019; in that year, the estimated number of uninsured would fall from 54 million to 34 million. That reduction is a bit larger than CBO estimated for the previous version of the bill. Senators Kennedy and Dodd have expressed the desire to reduce the number of uninsured much more dramatically, but that would presumably require Medicaid expansions that are not included in this cost estimate. (As CBO notes, the uninsured includes some who are eligible for Medicaid, but haven’t enrolled, as well as some unauthorized immigrants.)
6. By 2019, about 27 million people (10% of the non-elderly population) would get health insurance through exchanges. That figure includes about 20 million who would have been uninsured, 6 million who would have had other types of non-employer health insurance, and 1 million who would have been enrolled in Medicaid or CHIP. CBO estimates that there would be very little reduction in employer-provided health insurance; that’s a big change from the previous version of the bill, which CBO estimated would result in 15 million fewer people getting employer coverage in 2019.
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This article has 14 comments:
i see this bill as another political stunt which will make america even more non-competitive with the rest of the world.
The key to the puzzle seems to be ignored. That is health care costs much more than is necessary. One long term way to dramatically lower cost is to increase the supply of doctors and nurses by making their educaton paid by government and free to students. It would be a modest investment and benefit all.
A usual, there are no clear leaders and if a bill is passed it will be so loaded with pork that we will be better off without it. My hope is that Congress decides to appoint a (neutral?) commission to take the time to hash out both the principals and the details then come back with a specific proposal that, hopefully, is transparent and we can understand.
Obama may be in a hurry to establish a legislative record but he might wind up with one that isn't very flattering.
However, consumption, ex health-care, has been a constant percentage of GDP, hovering around 50%, for decades.
It is only when you add in health care expenditures, do you see the consumption percentage climb to 70%. IF health care were at the same percentage of GDP as the countries we compete with, we could have savings rates of 8-9% and give up NOTHING ELSE.
Virtually every developed country except the US has a base health care plan that is single payer. Those countries have half the health care costs we do, they have as good as or better mortality and morbidity, AND the health care plans consistently rate very high in polling.
It IS true that they ration care, especially end of life care where the costs are high relative to the benefits. Because of the politics, they almost always rely on panels of expert doctors to make these choices based on the science.
But, guess what, HMOs and PPOs in the US ration health care, too. THEY have panels of doctors and accountants who get bonuses by keeping claim expenses down.
Further, the private plans do not show up well in the polls I've seen.
As someone who was involved in some of the first HMOs in 1975, I have become totally disillusioned with the private system.
It is controlled by the providers, it not only leaves out millions who cannot get it because of cost or pre-existing conditions, but it is now denying a lot of procedures to those who thought they were covered.
AND if we don't fix it soon, it will bankrupt us.
The eurozone has a higher savings rate than the US, but the eurozone also has lower income and higher taxes.
I injured my knee playing rugby in France and was told I would have to stay on crutches for at least eleven weeks before I could have the surgery necessary to reattach my ligaments. Being someone with connections I made a call and had the surgery the next week. My French orthopedic surgeon had done his fellowship at the Stedman Hawkins clinic in Vail, Colorado. Had I not been connected I would have been like the majority of patients waiting and waiting. In the USA I would have never had to wait eleven weeks for a surgery connected or not.
ever-enhanced by a hollywood-like news media that forever sees ourselves (US) as the center of the universe.The rest of the world disdains us for this ego-centricity.
After all, we are but 5% of the world's population, but control 35% of the world's wealth. This may not last for long.
Our over-consumption of food and the resultant health-related problems could prove our down-fall.
We could never produce a health-care system because we have fostered a sick-care system. Our hospitals, our drug companies, and unfortunately our doctors, are rewarded for treating the sick and those becoming ever sicker.
No one, especially the patient, has any responsibility, in the condition, treatment or outcome. Remember, if things go wrong, there's always another doctor, another drug, another 'treatment'.
No personal offense, just think of Michael Jackson and all of his "enablers."
our hospitals, drug companies
If Kennedy & Dodd would stop hiding behind the tax brakes they use, America would be able to support a large number of people on the welfare rolls.
There definately WILL be more nurses than doctors in government medicine. The nurses will gate-keep...they will decide whether or not you really need to see a doctor. If they are wrong, too bad! You can't sue the government for misdiagnosis. Doctors will quit medicine...no incentive...and you will have to hope and pray that the nurse who is treating you and those you love makes a good guess as to what is best for you and yours. It's going to be bad! God help us.
Why is it we must put the onous of paying for or of providing health care insurance on business and/or the consumer?
Why is there no mention of requiring health care insurance corporations to form not-for-profit subsidiaries to provide health care insruance plans at lower cost to those not well-healed and low cost to those who qualify?
Why is there no talk about the consequences of making reforms in health care costs, but no reforms in health care professionals' education costs? I.E., Is there a possibility that health care professionals, primarily physicians and nurses, will leave the field, en mass, if their potential incomes are slashed due to cost containment reforms, yet their practice overhead costs continue to rise?
Did anyone stop to think about the possibility that medical and nursing schools will see a dramatic drop-out and drop in enrollment as a consequence of these cost containment reforms subjugating these professionals to much lower incomes...They exit school with an average of $100,000 in loans at an average of 9% interest rate, resulting in the very real possibility that with lower incomes and these loans in their debt, considering the tight credit market, they may never qualify for a home purchase or even an auto purchase?
"Reforms" are necessary in the industry that was the initial CAUSE of health care costs rising: The Health Care Insurance Industry. It is this industry that should face reforms (AIG, et. all.?).
And if cost containment reforms are to be the modus operandi, then begin at the beginning with health profesionals' edcucational costs!
Best, DrDavidRobinson4Health...
We have already witnessed the job loss at our web site, www.gorillamedicalsale... , a job board for medical device sales representatives to seek new employment within the industry. Medical suppliers are simply leaving vacant sales jobs unfilled as the prepare for life under a socialized model.