Reports Reach Different Conclusions on Reform Bill’s Effect on Spending
On Monday, the White House released a report from the Council of Economic Advisers that found that the Senate overhaul bill (HR 3590) eventually would slow the growth of health care spending by one percentage point annually, the New York Times' "Prescriptions" reports (Gay Stolberg, "Prescriptions," New York Times, 12/14).
According to the Washington Times, reports from both the Congressional Budget Office and CMS have concluded that the bills being considered in both chambers of Congress would increase the nation's health costs (Haberkorn, Washington Times, 12/14).
However, Christina Romer, chair of CEA, said that while spending would increase in the short term as about 30 million more U.S. residents receive insurance coverage, spending by both the government and the private sector ultimately would be slowed under the Senate bill.
The report found that by 2019, total federal spending on Medicare and Medicaid would be lower after passage of the Senate bill than it would be without the legislation and that the annual growth of federal spending on the programs would be "at least 0.7 percentage points lower than it otherwise would have been."
According to the report, the reductions would contribute to lower premiums for Medicare beneficiaries.
In addition, the report estimated that an excise tax on high-cost insurance plans would reduce the growth rate of annual health costs in the private sector by 0.5 percentage points from 2012 to 2018.
According to the report, other provisions that aim to reduce waste and inefficiency would slow spending growth by an additional 0.5 percentage points.
The report comes as Republicans have stepped up allegations that Democratic health reform proposals would increase health costs ("Prescriptions," New York Times, 12/14).
Despite the findings, House Minority Leader John Boehner (R-Ohio) said that Democratic reform proposals in Congress would raise health care spending. He said, "Instead of putting out more phony reports, the White House should acknowledge what independent experts have found: The Democrats' health care bill will increase costs" (Silva, "The Swamp," Chicago Tribune, 12/14).
Second Report Reaches Different Conclusion
A separate report, conducted by the Lewin Group for the Peter G. Peterson Foundation, found that the Senate legislation would reduce the deficit by $21 billion in the first 10 years but then would increase it by $81 billion in the following 10 years, CQ HealthBeat reports.
The CEA report only looked at the first 10 years under the legislation.
In addition, the Lewin Group report found that national health spending would increase under both the Senate and House (HR 3962) reform bills through the next 20 years.According to the report, most of the increase would be caused by wider use of services by newly insured residents (Norman, CQ HealthBeat, 12/14). 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.