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New CBO Projections Fuel Resistance to House Health Care Reform Plan

The House health reform bill (HR 3200) would produce a deficit of $239 billion over 10 years, according to a new estimate from the Congressional Budget Office, CQ Today reports (Allen/Clarke, CQ Today, 7/18).

CBO also estimated that the bill would "yield a significant increase in" health care coverage (Hitt, Wall Street Journal, 7/18).

The estimate -- released late last week -- puts the gross cost of the bill at $1.04 trillion between 2010 and 2019.

Spending provisions in Medicare and Medicaid would reduce spending by $219 billion over that period, while a surtax on individuals and families with high incomes would increase federal revenues by about $583 billion, totaling $802 billion of the cost of the $1.04 trillion package, leaving the plan $239 billion short.

CBO said the biggest savings would come from a proposal to make permanent reductions to the annual updates to Medicare's payment rates for nearly all services in the fee-for-service program besides physicians' services.

That would reduce spending by $196 billion over 10 years, the CBO estimated (Reichard, CQ HealthBeat, 7/18). However, CBO said that many of the provisions would have no net impact on the deficit.


A statement released by the three House Democratic chairs whose committees drafted the proposal said the score shows the bill as deficit neutral, considering the $245 billion "fix" to Medicare payments to physicians.

According to the statement -- by Reps. George Miller (D-Calif.) of the Education and Labor Committee, Henry Waxman (D-Calif.) of the Energy and Commerce Committee and Charles Rangel (D-N.Y.) of the Ways and Means Committee -- the Medicare payment fix should not be part of the calculations because it "will be absorbed under the upcoming statutory 'pay go' legislation (HR 2920) that is pending in the House" (CQ Today, 7/18).

In a letter sent last week, White House Office of Management and Budget Director Peter Orszag recommended to House Speaker Nancy Pelosi (D-Calif.) that she consider adding to the bill language that creates a new council to hold Medicare spending to levels projected under current law or to lower them.

Orszag wrote that the council "would have the authority to make recommendations to the president on annual Medicare payment rates as well as other reforms."

Pelosi later said she was receptive to the idea (Reichard, CQ HealthBeat, 7/17).

House Leaders Sell Progress

Last week, Pelosi said the House is "in very excellent shape" in the process of approving reform legislation (Newmyer, Roll Call, 7/20). She added that the House is on schedule to have a bill approved by the August recess (Young [1], The Hill, 7/17).

Pelosi said the House will pass reform legislation "with the full participation of our caucus and full consideration of suggestions they may have" (Norman [1], CQ HealthBeat, 7/17).

House Majority Leader Steny Hoyer (D-Md.) said, "There continues to be great momentum to pass health care reform" (Young [1], The Hill, 7/17). He added, "These pivotal months will finally be our chance to deliver, and we will" (Reuters, 7/17).

Remaining Discontent

Republicans -- as well as some moderate Democrats -- still are resistant to the legislation, and the CBO estimate might give the GOP more opportunities to cast Democrats as being fiscally reckless, according to CQ HealthBeat (CQ HealthBeat, 7/18).

The Hill reports that centrist Democrats continue to work against the leaders of their party, with some aligning with Republicans on certain committee votes.

Three Democrats on the House Ways and Means Committee and the Education and Labor Committee voted against the legislation when the committees held their votes last week (Young [1], The Hill, 7/17). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.