The Congressional Budget Office, however, seems to think that the public option is no big deal. In fact, in a letter sent to the House, the CBO estimates that the public option portion of the bill will only attract about 6 million enrollees. They estimate that most Americans will stay with their private plans. They also estimate that the bill will reduce the deficit by 104 billion dollars over 10 years.
The CBO goes on to say that the public option would likely charge higher premiums than private insurers. This is due to their estimate that the people who would seek the public option would be higher risk patients and the fact that the public option would “engage in less management of utilization." So, the contention that the public option would drive private insurance out of business is not accurate.
Here is the CBO's breakdown of both the House bill and the Senate Bill.
| CBO Score Of House Bill | CBO Score Of Baucus Bill | |
| Costs | Reduce deficits: $104B/10yrs Cost: $894B/10yrs Spends on subsidies: $605B/10yrs On Medicaid/CHIP: $425B/10yrs On Small Employer Credit: $25B/10yrs | Reduce deficits: $81B/10yrs Cost: $829B/10yrs Spends on subsidies: $461B/10yrs On Medicaid/CHIP: $345B/10yrs On Small Employer Credit: $23B/10yrs |
| Insured | Uninsured reduced by: 36M Uninsured in 2019: 18M In Exchanges: 30M | Public Plan: 6M In Medicaid: 15M | Uninsured reduced by: 29M Uninsured in 2019: 25M In Exchanges: 23M In Medicaid: 14M |
| Revenue | Mandate penalty: $33B/10yrs Pay-Play penalty: $135B/10yrs New taxes: $572B/10yrs | Mandate penalty: $4B/10yrs Free rider penalty: $23B/10yrs New taxes: $196B/10yrs |
| Medicare and Medicaid | Total savings: 426B/10yrs Medicare Advantage: $170B/10yrs | Total savings: 404B/10yrs Medicare Advantage: $117B/10yrs |
Now, the CBO has been touted by those who are against this bill as being sound financially. One would think this would be good news for them. In addition, if only six million people are going to use the program, that isn't exactly a "Soviet style takeover."
6 comments:
So, 6 mil enrollees out of the what is it, 47 mil without health insurance? So is everyone without health insurance in a family of 8? Or is there just a little discrepancy in someone's numbers?
The CBO also assumes that no businesses ditch their plans, right?
http://dailycapitalist.com/2009/11/01/a-cold-war-cartoon/
It's simply amazing that any attempt at health care reform has gotten this far. Whether this signals that the problem has really gotten to be serious, i.e. impacts the middle-class, or a weakening in the corporate health care lobby, I don't know.
What I am certain of is, now matter how the final legislation is crafted and signed into law (or not) it will be the poor who suffer, again. Those of us who really need the help will be left behind again. Like today, their best option will be to try to make it to the Emergency Room and pray that the county will pick up the tab.
Hey Dan, you asked for a serious discussion a couple of threads back, where you just kidding?
The true cost is not the net spending on only the coverage related provisions ($897 billion) but rather the total gross spending for the coverage provisions ($1.05 trillion) as well as any additional spending in the bill (approximately $217 billion). The bill is front loaded with taxes, and back-loaded with. Since most of the spending in the bill does not fully go into effect until 2014, the 10-year cost estimates based on the preliminary CBO score, which you see in the chart you posted, only account for six years of new spending under the plan. Once it is implemented (over a full 10-year window from years 2014 to 2023), the House health bill carries a price tag of $2.4 trillion. Lets get past the misleading accounting games. Each bill is routinely "scored" for its 10-year costs from 2010-19 but this includes several years when the spending wouldn’t yet have kicked in. According to the CBO, fully 99.9 percent of the Pelosi bill’s costs would hit from 2013 onward. 98.3 percent of Reid’s spending would come after 2014.
If you start the tally when the bills’ spending would actually start (in 2013 for the House bill and 2014 for the Senate bill), then the bills’ real 10-year costs become clear. If this bill was truly cost-beneficial to the country, its advocates would not be spending this much effort to cover up its costs.
Pelosi would raise taxes by $1.1 trillion over that period, while Reid would hike them by $1 trillion. The House bill would siphon about $800 billion from Medicare to spend it elsewhere, while the Senate bill would suck out about $900 billion.
According to the CBO, the first ten years of the Pelosi plan would add $650 billion to the deficit, while the Reid plan in the Senate would hike it by $740 billion. And that assumes that one can count the money coming from Medicare cuts as true deficit reduction, which is arguable, since the Medicare system is already deeply in the red.
While the CBO has put the cost of expanding coverage in the legislation at roughly $1 trillion, Democrats added billions more on higher spending for public health, a reinsurance program to hold down retiree health costs, payments for preventive services and more. Many of the additions are designed to improve benefits or ease access to coverage in government programs. The bill creates 111 new federal bureacracies such as a Health Insurance Exchange; the Center for Medicare and Medicaid Innovation; the Public Health Investment Fund; the Public Health Workforce Corps; an Assistant Secretary for Health Information; the Food and Drug Administration Office of Women’s Health; grant programs for alternative medical liability laws, infant mortality programs and other issues; and about 100 other government-sponsored creations. The plans supporters are calling them "demonstration projects". The problem, though, is that even demonstration projects have bureaucracies — and they have an annoying habit of becoming permanent. Do 111 "demonstration projects" belong in a bill that purports to reform an industry in order to save money?
Last in lines proposed solution #3 – tort reform. Cap the difficult to define "pain and suffering" provision in lawsuits at $250k.
Only a devout liberal like yourself could possibly believe that spending TRILLIONS of taxpayer dollars = saving money.
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