Finance Panel’s Reform Plan Expected to Cost $1.6 Trillion, CBO Says
The Senate Finance Committee's health reform bill would cost the government more than $1.6 trillion over 10 years while reducing the number of uninsured by 40 million, according to a preliminary Congressional Budget Office estimate released to Senate staffers, the Wall Street Journal reports.
CBO estimated that about 15 million people would remain uninsured after a decade if the legislation is enacted (Meckler/Hitt, Wall Street Journal, 6/17). According to CBO, the committee's legislation covers about $560 billion of the estimated cost (Espo, AP/Detroit Free Press, 6/16).
Senate Finance Committee Chair Max Baucus (D-Mont.) said that the CBO estimate was not accurate because it is based on a two-week-old draft of the legislation that has since changed (Edney, CongressDaily, 6/16).
A Democratic Finance Committee aide said that the final legislation would cost less than $1 trillion over 10 years and be fully offset (Herszenhorn/Pear, New York Times, 6/17).
After a private meeting with Finance Committee members on Tuesday, Senate Budget Committee Chair Kent Conrad (D-N.D.) said, "It is clear there have got to be changes made to make the whole package affordable" (Budoff Brown, Politico, 6/16). Conrad said that a "major driver" of the bill's cost is the inclusion of a health care insurance exchange marketplace, which would help individuals purchase coverage and provide subsidies for some people.
CQ Today reports that depending on how it is designed, the exchange could spur people to drop their employer-sponsored coverage and purchase insurance with subsidies instead, which would drive up costs to the government (Armstrong, CQ Today, 6/16).
Conrad said that one way to prevent people from dropping employer-sponsored coverage would be to lower the subsidies offered to people in the exchange (Edney, CongressDaily, 6/17).
The Finance Committee bill currently would provide subsidies to people with incomes up to 400% of the federal poverty level, but the final cutoff could be closer to 300% of the poverty level, according to the AP/Boston Globe (Werner, AP/Boston Globe, 6/17).
CongressDaily reports that lawmakers also could limit access to the exchange to people who do not have employer-sponsored coverage (CongressDaily, 6/17).
Baucus said that he is "very close" to reaching an agreement with some health care industry groups over billions of dollars in cuts in projected Medicare and Medicaid fees (AP/Detroit Free Press, 6/16).
In addition, sources say that the Finance Committee is considering enhancing the Medicare prescription drug benefit and could include a tax break for drugmakers that offer no-cost medications to low-income residents.
In exchange, the pharmaceutical industry would go along with plans to allow generic versions of biologic medicines onto the market and other programs that would reduce their federal Medicare and Medicaid reimbursements (Wall Street Journal, 6/17).
Baucus had planned to release an early version of the legislation on Wednesday, but now the plan is expected to be released by the end of the week.Baucus said that the bill remains on track to be marked up on June 23 (Reichard, CQ HealthBeat, 6/16). 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.