CBO numbers buoy Democrats eyeing Sunday health reform vote

Democrats unveiled a health overhaul reconciliation bill the Congressional Budget Office says will cost $940 billion but also cut the deficit by $138 billion over the next 10 years.

The New York Times: The release of the CBO estimates started a 72-hour countdown for a Sunday vote. House Democratic leaders promised members the time to read the bill. "The legislation's chances seemed to be improved by the budget office report … with additional tax revenue and Medicare savings. … Under the bill, the budget office said, the federal government would spend $940 billion over the next 10 years to provide coverage to 32 million people who would otherwise be uninsured. The price tag, though higher than $875 billion cost of the Senate bill, is lower than the limit of $950 billion suggested by Mr. Obama" (Pear and Herszenhorn, 3/18).

The Washington Post: "House Democratic leaders hope to approve the Senate bill along with a separate 153-page package of revisions to that bill that House members are demanding. … All Americans would be required for the first time to obtain insurance or face an annual penalty of $695 [in 2016]; [some] employers could face penalties of $2,000 per worker for not offering affordable coverage." Insurers would also be barred from denying coverage to people with pre-existing conditions and would be required to allow adult children to stay on their parents' plans until age 26 (Montgomery and Kane, 3/19).

The Wall Street Journal: "The CBO numbers reflect the combined cost of two pieces of legislation. First is the version of the health overhaul passed through the Senate on Christmas Eve. Second is a package of changes released Thursday. The cost includes $466 billion to give tax credits to help lower earners buy insurance, $434 billion to expand the Medicaid federal-state insurance program for the poor and $40 billion in tax credits to help small businesses offer coverage." The bill — in the second decade after the bill's enactment — would save even more money, the CBO said, though it "declined to give a dollar figure..."

Under the bill, a family of four with an annual income of up to $88,000 would be eligible for subsidies to buy insurance. "And Democrats increased funding for seniors on Medicare whose prescription drugs fall in a coverage gap known as the doughnut hole..." To pay for the changes, Democrats are proposing increasing taxes on drug makers and insurance companies and expanding Medicare taxes for some wealthy Americans (Adamy, 3/19).

Kaiser Health News details nine specific changes included in the Democrats' new health reform bill, including shifts in Medicare Advantage payouts, boost in Medicaid payments for physicians and a proposal to create a new Medicare spending board (Appleby and Carey, 3/18).

In a second story, The Washington Post cautions: "Budget experts generally have high praise for the work of CBO analysts, the non-ideological technocrats who crunch the numbers to estimate the fiscal impact of legislation. But their work is often more art than science, and although the forecasts that accompany legislation are always filled with uncertainty, this one contains more than most." Changes to the health care system "would touch almost all corners of the health-care system, and the changes interrelate in hard-to-predict ways." Some experts also have been critical of the CBO for not including in the score ways the system would save money by being made more efficient over time, like by the use of "comparative effectiveness" research (Irwin, 3/19).

The New York Times, in a separate story: "Congressional Democrats have spent more than a year working with the nonpartisan budget office on the health care legislation, and as they fine-tuned many of the bill's various provisions in recent weeks, they consulted repeatedly with its number-crunchers and the bipartisan staff of the Joint Committee on Taxation." For instance, when union leaders negotiated a lower excise tax on high-cost insurance plans than was in the Senate bill, Democrats increased the Medicare payroll tax on unearned income, according to The Times. "There were other tweaks. The final bill imposes an additional $16 billion in cuts to private Medicare Advantage plans, which now cost the government more on average than traditional Medicare, for a total of $132 billion in reductions" (Herszenhorn, 3/18).

Time: "In unveiling the CBO score, House Democrats also confirmed the changes they would make (which Obama had supported) to the underlying Senate bill, notably stripping out some sweetheart deals like a special Medicaid funding deal for Nebraska and a provision that would have given special treatment to Medicare Advantage recipients in Florida and a handful of other states" (Pickert, 3/19).

The Boston Globe: The bill gives a boost to states that need help paying Medicaid bills. For Massachusetts, that means $2 billion over the next 10 years. "The provision, which would compensate all states for covering more Medicaid patients, would send even more additional money to the Bay State than a Senate-approved 'special deal'' that Obama insisted be removed. The Senate deal would have granted Massachusetts $500 million over three years, with no guarantee of extra assistance after that" (Milligan, 3/19).

KHN's Morning Edition provides more specific details of these provisions in a separate story.