Kennedy, Dodd Roll Out New Cost Estimates on Reworked Reform Plan

The Senate Health, Education, Labor and Pensions Committee's revised health reform proposal would cost slightly more than $600 billion over 10 years and when combined with Senate Finance Committee proposals, would cover 97% of U.S. residents, according to committee Chair Edward Kennedy (D-Mass.) and Sen. Christopher Dodd (D-Conn.), the AP/Chicago Tribune reports.

Previously, the Congressional Budget Office had scored the committee's health care proposal at about $1 trillion over 10 years and estimated that the plan would result in millions remaining uninsured.

Kennedy and Dodd, who is overseeing the bill's markup in Kennedy's absence, sent a letter to committee members on Wednesday that said CBO estimated the cost of the new proposal at $611.4 billion over 10 years. The senators wrote that the new estimate reflects two changes made by the committee: a public plan option and a play-or-pay employer provision (AP/Chicago Tribune, 7/2).

Under the employer provisions, businesses would be required to offer employees health coverage or pay a $750 annual fee for each full-time worker and a $375 annual fee for each part-time worker not covered. Companies with fewer than 25 employees would be exempt from the fee.

The fee would generate an estimated $52 billion over 10 years, which would be used to offset the cost of other health reform provisions.

Lawmakers hope the employer fines will prevent employers from dropping coverage, a concern noted by CBO in its score of the previous version of the bill.

According to the AP/San Francisco Chronicle, the Senate HELP Committee could complete its markup of the measure as early as next week.

Because of the inclusion of the public option, the measure "virtually assures a party-line vote," according to the AP/Chronicle (Espo, AP/San Francisco Chronicle, 7/2).

Putting It in Context

Bloggers raised questions about the cost and coverage estimates cited in news reports.

• Ezra Klein, Washington Post: Klein points out that the HELP Committee's bill does not include the cost of a proposed Medicaid expansion because the Senate Finance Committee has exclusive jurisdiction over Medicaid.  According to Klein, the cost of the Medicaid expansion in conjunction with savings from overhauling Medicare and Medicaid likely will result in a reform package that will cost $1 trillion to $1.3 trillion and cover 42 million people (Klein, Washington Post, 7/2).
• Jonathan Cohn, "The Treatment," The New Republic: Cohn also makes the point about changes to Medicaid and Medicare, concluding that spending $1 trillion to $1.3 trillion to cover to 97% of documented U.S. residents should not "inflate the deficit by a dime" (Cohn, "The Treatment," The New Republic, 7/2).