Preliminary Analysis of the House Health Bill

On Tuesday, the Congressional Budget Office [CBO] released a preliminary analysis of the House health bill, also known as the Tri-Committee bill. Among the key findings:

1. The bill uses five levers to increase health insurance coverage:

• Expanding Medicaid
• Subsidies for purchasing insurance through new exchanges
• An individual mandate (enforced by a penalty if you lack coverage)
• Play or pay (requiring employers to offer qualifying insurance or pay a tax)
• A public plan (whose rates would be lower than those of many private plans)

2. These provisions would sharply reduce the number of uninsured. In 2019, for example, CBO estimates that the number of uninsured would fall from 54 million to 17 million, a decline of 37 million. Many of those who would remain uninsured are particularly difficult to reach (e.g., individuals who qualify for Medicaid but don’t enroll) or are unauthorized immigrants (who aren’t a focus of the legislation). Put another way, the bill would result in 97% of the non-elderly (excluding unauthorized immigrants) having health insurance by 2015.

3. The bill would increase spending by almost $1.3 trillion over the next 10 years. The penalties and fees would raise a bit less than $240 billion over the same period, so the 10-year net budget cost would be slightly more than $1 trillion. The bulk of the penalties and fees — $208 billion – would be paid by employers (who would then pass on some or all of the costs to workers). The remaining fees — $29 billion — would be paid by uninsured individuals. As Keith Hennessey notes, the prospect of levying such fees on the uninsured raises some difficult political and policy questions.

4. Enrollment in the public plan would be substantial, perhaps 11 to 12 million people by 2019. The plan, operated by the Secretary of Health and Human Services, would pay providers at levels very similar to those in Medicare. As a result, CBO expects that the public plan would offer lower premiums than many private plans.

5. The analysis is preliminary in two key ways:

• It does not include any of the potential offsets — e.g., tax increases and Medicare spending reductions — that lawmakers would need to pay for the bill.
• The CBO estimate is based on “specifications” that the committees asked CBO to evaluate. CBO has not yet had time to analyze the actual language of the proposed bill. It’s always possible that the language would have different impacts than the less-detailed specifications.

Comments

[Neil459:]

Look at the veterans health care system. Anyone want to be part of that? Look at the post office. Look at how the SEC and Fed handled the financial institutions. Look at any government agency outside of the military and no one in their sane mind would want to be part of it.

I'll think about supporting national health care when I know that all of the government is going to be on the same plan as the public, including Congressman and Presidents!

If its going to be so great, whey not just adopt the Congressional Health plan for national participation?

Jul 15 08:22 AM

[Neil459:]

The current administration does not want to make things equal they want to institutionalize privilege. Their minions have no idea.

Jul 15 08:24 AM

[CautiousInv...:]

It's another intrusion of the government into our lives, mandating that we protect ourselves with health insurance unless determined otherwise by Treasury. Those without coverage and not exempted by Treasury would have to pay a new tax.

Employers would be required to provide health care coverage to its employess and, if not, those firms with payrolls greater than $250,000 would start paying a fee or penalty which would equal 8% for those firms with payrolls equal to or above $400,000.

"People could buy coverage on their own from the new government plan, and those with modest incomes could get federal aid. Workers who have access to insurance through their employers could sign up for the government plan if premiums for the employer coverage would take up more than 11 percent of family income."

It's just another intrusion and tax that will further limit our options as individuals and reduce incentives for businesses to retain current employment levels much less expand.

Jul 15 09:52 AM

[Living4Divi...:]

Terrific article - as is your usual, Donald. Let me see if I can get the funding straight:

$1 trillion - Funded entirely by 1% surcharge on the wealthy
$208 billion – penalties and fees would be paid by employers (who would then pass on some or all of the costs to workers).
$29 billion - penalties and fees paid by the uninsured
----------------------...
$1.3 trillion TOTAL

$1 trillion - Funded entirely by 1% surcharge on the wealthy - Is this correct?

Jul 16 10:24 AM

[anarchist:]

Well, I guess the 50 million or so people that have no health care benefits other than some ER might think "they want to be a part of it".
So Neil459, whats your proposal for health care-do nothing or some plan that makes the industry richer?


On Jul 15 08:22 AM Neil459 wrote:

> Look at the veterans health care system. Anyone want to be part
> of that? Look at the post office. Look at how the SEC and Fed handled
> the financial institutions. Look at any government agency outside
> of the military and no one in their sane mind would want to be part
> of it.
>
> I'll think about supporting national health care when I know that
> all of the government is going to be on the same plan as the public,
> including Congressman and Presidents!
>
> If its going to be so great, whey not just adopt the Congressional
> Health plan for national participation?

Jul 16 11:44 AM

[ScroogeMcduck:]

Great, just what we need. More resons to give people to sit on there as s and contribute nothing to this country While the tax payers choke on the bill.

Jul 16 11:51 AM

[robert.b.fe...:]

Let health care establishments and providers give required treatments/medications to the uninsured and then deduct the entire amount from thier tax burden. Cap the huge settelements for malpractice suits and institute looser pays (TORT REFORM). and you have a workable plan with minimul cost. Many employers will find paying the tax cheaper than paying insurance on employees thus forcing more people onto the government plan . Pulling money from medicare just means it will be deeper in the hole that is not saving any money. Expanding the medicare model to cover everyone is an obveous loosing proposition. I would make the administration run AAMTRAK and the post office at a profit for three years before I would let them tinker with health care.

Jul 16 12:00 PM

[ERCaptain:]

Want to see the current example of governement run health care? It is the VA system. A visit takes a day; quality is often questionable; the infrastructure is terribly outdated..
for veterans, it is often used, but would they if they didn't have to?

How about other social programs?
Medicare? Disaster
Medicaid? Broken
Social Security? Disaster

And now we want to turn over our Health to these morons in Washington....

Have we all lost our minds ?

Jul 16 01:14 PM

[WS1835:]

A personal anecdote for reference....

The premium for the health insurance package at my employer is ~18% of my salary for husband/wife coverage and ~26% of my salary for family coverage. An 8% fee for use of the public system automatically guarantees that our office will eventually move to the public system.

BTW, a public system based on a Medi-care model will automatically bankrupt the medical system since Medi-care reimbursement rates do not come even close to covering the actual cost of care. Everyone will have coverage, but there won't be anywhere to use it.

Jul 16 01:49 PM

[CromwellCTDude:]

Maybe we can turn the post offices that are closing into walk in clinics.

Could be a construction boon for local contractors.

Limiting factor could be finding enough doctors to go around.

Jul 16 03:15 PM

[ERCaptain:]

On Jul 16 01:49 PM WS1835 wrote:
"BTW, a public system based on a Medi-care model will automatically bankrupt the medical system since Medi-care reimbursement rates do not come even close to covering the actual cost of care. Everyone will have coverage, but there won't be anywhere to use it."
And CromwellCTDude wrote:
"Limiting factor could be finding enough doctors to go around."

You are both right. The reasons for long waits and lack of quality care is that the system will be damaged and fewer doctors will even want to be part of the system.

I currently have a child considering a medical profession. If I can have any influence, I will encourage her to use her talents and resources in a field where she will still be rewarded for her efforts and education... like becoming an analyst for Goldman Sachs, professional bureaucrat (like Geithner), or union lawyer...

Jul 16 04:51 PM

[The Caring ...:]

So what if a visit takes a day? Do you think the administration cares?

On Jul 16 01:14 PM ERCaptain wrote:

> Want to see the current example of governement run health care? It
> is the VA system. A visit takes a day; quality is often questionable;
> the infrastructure is terribly outdated..
> for veterans, it is often used, but would they if they didn't have
> to?
>
> How about other social programs?
> Medicare? Disaster
> Medicaid? Broken
> Social Security? Disaster
>
> And now we want to turn over our Health to these morons in Washington....
>
>
> Have we all lost our minds ?

Jul 19 09:21 AM