Questions Linger Over Strategies To Cover Costs of Health Reform
Although President Obama said Wednesday night that his health reform plan would cost $900 billion over 10 years, he was not clear how he plans to offset that expense without adding to the federal budget deficit, the Wall Street Journal reports.
During the speech, Obama mentioned seeking savings by reducing payments to Medicare Advantage plans and by imposing new fees on certain health plans.
Kenneth Baer, a spokesperson for the White House Office of Management and Budget, said, "We don't know the entire mix [of savings mechanisms]. What we do know is that when we tally it all up, it's going to net out at zero. It will not add a dime to our deficit."
Baer added that Obama is considering some other cost-savings proposals introduced earlier this year (Adamy, Wall Street Journal, 9/11).
Obama has previously suggested $900 billion in savings, which would come from lower Medicare payments to hospitals, drug companies and insurers, as well as limiting the tax deductions the wealthiest Americans can take.
The president has insisted that any way of offsetting the cost of the reform plan must be able to be scored by the Congressional Budget Office. One proposal Obama has mentioned -- improving greater productivity in the health industry -- cannot be scored.
Trigger Could Help Plan Be Budget Neutral
During the speech, Obama also said that if the costs of health reform do add to the deficit, lawmakers and the president must seek ways to reduce spending. According to some health economists, one trigger could be limiting Medicare provider payments.
With the trigger mechanism written into the legislation, CBO likely would determine the bill to be budget neutral, according to the New York Times.
In addition, some experts say that the trigger would not need to take effect because currently proposed savings mechanisms would be enough.
In the past, similar trigger proposals "have not proved effective as a way to reduce federal spending," and Congress and presidents have overridden or ignored them, the Times reports (Calmes, New York Times, 9/11).
Obama's Cost Talking PointsU.S. News & World Report's "Washington Whispers" has the details of the talking points given to House and Senate Democrats (Bedard, "Washington Whispers," U.S. News & World Report, 9/10). 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.