CBO Scores Health Care: $1.3 Trillion Saved Over 20 Years
By Justin Gardner | Related entries in Democrats, Health Care
Yes, the CBO says that the new bill will cover 95% of Americans and will save A TON of money. So this is a BIG win for Dems today in their fight to reform health care and win undecided Dem votes.
So how do they do it?
The program would be paid for by slicing nearly $500 billion from Medicare and other federal health programs, particularly a privately operated insurance plan known as Medicare Advantage. Democrats also propose taxing, for the first time, the health benefits of some people who receive coverage through employers. That proposal focuses on the most generous policies, which economists say are helping to drive health-care costs skyward.The bill — to be unveiled Thursday and likely voted on Sunday in the House — also would increase Medicare payroll taxes for wealthy families, in part by applying the tax for the first time to investment income.
The cost of expanding coverage would exceed $200 billion a year by 2019, the CBO said. But new revenue in the package, combined with savings from program cuts, would outpace the cost of coverage, reducing the federal deficit by $138 billion over the next 10 years. The savings would continue to accumulate in the decade thereafter, the CBO said, eventually slicing around $1.2 trillion from the nation’s budget gap.
My prediction…on Sunday this will pass the House. And then it will pass the Senate via reconciliation soon after. Also, given the details of the bill, it’ll be hard to argue that this is a) a government take over of health care, b) adds to our deficit or c) represents something that will interrupt or upset our health care delivery in any way.
Basically, if Republicans think they can use this bill as a bludgeon in October…I’m thinking that won’t be the case once the final story is written on this. Especially when it comes to deficit reduction. Dems can say, “Okay, my Republican opponent is saying X about the health care bill. Let’s look at the facts,” and then list the dozen or so reforms and deficit cutting measures that this included. The only way Republicans will be able to make any traction is if they can convince Americans that the CBO’s projections are full of it, or that Dems shouldn’t have passed this without a supermajority…and I don’t see a lot of independents buying that line.
I also see this win energizing Dems across the country and coming out to defend their representatives. Because while the bill isn’t perfect, it’s certainly something to be proud of. Yes, the process was messy and there’s still work to be done, but to say that you stopped the preexisting condition clause AND cut the deficit at the same time? If that’s not a political winner with the moderate majority, I don’t know what would be.
Read the CBO’s entire report here (pdf).
This entry was posted on Thursday, March 18th, 2010 and is filed under Democrats, Health Care. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
March 18th, 2010 at 4:27 pm
It’s hard to argue that….why? Because the facts don’t align with the GP rhetoric? When has that ever stopped the GOP before. Invade Irad because they had something to do with 9-11? WMD? Opposing pork? Smaller government? Death panels? Socialized medicine and get your hands of my medicare? We need to fix the banks, but then Sen Shelby is telling everyone who will listen that the GOP will scuttle any plan that reigns in banking and Rep Boehner is hanging out with bankers giving them a pep talk on killing reform.
Please.
The GOP is absolutely shameless. Truth means nothing to it.
Even Richard Nixon is rolling over in his grave….
March 18th, 2010 at 7:13 pm
The program would be paid for by slicing nearly $500 billion from Medicare and other federal health programs, particularly a privately operated insurance plan known as Medicare Advantage.
Yeah, if these slices really happen. I don’t believe that the lower mandated reimbursements to medicare providers will really happen.
Hopefully someone will keep track of whether these savings actually materialize.
I also think it’s dishonest to begin collecting extra revenue now for components that don’t kick in until 2013, and then include all that extra revenue when doing the accounting. What matters is whether the new plan really will be a cost saver on an annual pay-go basis. The gov’t is using the kind of accounting that any ranting whacko progressive would crucify an evil corporation for using.
March 18th, 2010 at 8:28 pm
The cuts to medicare will never happen. Medicare currently has the lowest reimbursement rates in all of medicine. A 20% cuts will cause almost all health care providers to stop caring for Medicare patients.
thus, all of the savings are phony as was the promise not to provide care to illegal aliens.
In the end, the program will be a failure and will be used as an excuse to nationalize health care.
Why would anyone want to plan on having a career in health care when facing massive cuts. Everyone should start planning on a job with the government because that is the only place where the middle class will be able to have a good paying job.
March 18th, 2010 at 10:49 pm
Wow, it is incredible that so many people can promise so many things and try to tell us that it is all paid for. Do you really think that we are a bunch of fools? To get these massive government programs passed politicians always underestimate the costs. It has been shown time and time again that government can not deliver what it tries to promise and yet we still get the same old promises. Shame on president Obama and shame on you for writing this baloney in this article! If passed, this reform will lead to national bankruptcy. How much health care will we have then?
March 19th, 2010 at 2:17 am
@gerryf
I know I am being repetitive, but it is, has been, and will continue to be only Democrats that are responsible for either obstructing this bill or passing this bill. The GOP has nothing to do with its success or failure, except as spectators making comments from the peanut gallery. There is, in fact, bipartisan support for stopping this bill, but I don’t think it will be sufficient to overcome the One Party Democratic rule currently controlling both legislative and executive branches.
March 19th, 2010 at 5:53 am
This time next year all those Democrats who lost their jobs will be the head of NASA, The head of an EVIL CORPORATION that the progressives hate, Ambassadors, Federal Judges so really, why not vote for health care? They will actually receive a raise when they lose their jobs.
Oh but wait……it gets better…..
This is WHATS BEST FOR AMERICA………….sorta like GOING TO WAR IN IRAQ was best for America.
Oh but really…..this is best for America……it will save us money…..Really…..it will.
REALLY…the war will PAY FOR ITSELF….REALLY…….would we lie to you?
Would we?
March 19th, 2010 at 9:07 am
There is no way they’re going to cut funds from Medicare advantage, doctors will simply refuse it or the costs will go up for payers since the administrators will have to spend more time navigating the rules. Besides, the people who have the coverage are the ones who are going to pay the difference that government does not pay. A tax on “cadillac” plans is also ridiculous. So people that want to pay for more coverage won’t be able to or will be taxed. This will cause greater out of pocket expense for people that had good coverage previously. They may not have to change, but their costs will be prohibitive – and this will hurt the people who need insurance the most, the hardest.
Finally, we’re somehow going to pay for insurance for 30 million people and somehow that’s going to bring the deficit down? How does that work? Seriously this defies common sense.
March 19th, 2010 at 9:12 am
That number is nowhere in the CBO report. I am not kidding – it’s not. They make a project of a percentage of GDP and Nancy project out to what the GDP will be in 2020 and comes up with this number. My God, is everybody stupid or something. Reading is fundamental. This bill is going to cost us a boatload. I’m from Canada and my wife from GB. The NHS is called the “60 year failure” over in GB. The populations are 30 million and 60 million respectively. We are about to try this on 300 million people. Look at California – practically if not literally bankrupt. Do you really want this here?
Exit question: when is the last time a CBO report was anywhere near the real cost on major entitlement programs? Answer: never, not even on Medicare Part D UNDER BUSH. Be careful what you wish for people.
March 19th, 2010 at 9:16 am
Come on people. This is not about REDUCING the deficit, reducing spending, etc… You can twist the numbers however to tell the story to make your viewpoint look good. Just a look at the numbers and a little simple math tell you that what is really happening here is a dramatic increase in taxes, government power and intrusion into our lives.
First 10 years of the plan:
-$1 Trillion – > Cost of the plan
+$0.5 Trillion – > Savings from medicare and other cuts
————————————————————————-
=$0.13 Trillion -> Reduction of the deficit???
The math simply doesn’t add up…..unless you RAISE TAXES BY $630,000,000,000 DOLLARS!!
If this is really about redicing the deficit, why not just make the $500B in cuts, raies $630B in taxes, and then cut the deficit by over $1T????
Don’t just take these sleezy politicions numbers as the gospel and believe what they say. Think about it a little. Be open minded and use common sense. Do not be governed by your emotions….i.e. you think HC needs fixing and any old plan will work and anything that supports that is great.
March 19th, 2010 at 1:09 pm
figures lie and liars figure. Stay well my friends…
March 19th, 2010 at 2:08 pm
Wow. You’d think from this blog that 1) The CBO’s numbers actually have meaning, 2) That the CBO really projected a huge savings in the 2nd 10 years, which they didn’t. They say anywhere from ZERO to a certain % of GDP MAY happen IF nothing changes, AND everything happens as estimated, 3) That there isn’t any dishonesty in the #’s like taxing all of the first 10 yrs, while paying out only 6, 4) That healthy young people won’t simply pay $695 /yr until/unless they get sick, then they’ll get insurance thereby destroying the supposed savings from adding more people to the pool, 5) that the individual mandate is somehow constitutional (it’s not). You’d think all these things, but you’d be terribly wrong.
You had better believe the Dems will take it on the chin for this lousy bill as well as the bribes, backroom deals, and rule-bending they’re doing to pass it. Plus, the average person is smarter than a liberal, so they understand that the #’s are a joke based on tricks, gimmicks, and rosy estimates that will NEVER happen. Oh, and is anyone gullilble enough to believe that Congress will have the guts to follow through on cutting Medicare by $500 billion? Bye-bye savings……
March 19th, 2010 at 4:27 pm
Pretty obviously Justin did not actually read the opening letter in the CBO memo, or failed to note what it actually said. As he doesn’t seem to understand the government’s quaint notions of accounting or be able to read a disclaimer, this is unsurprising. The Magic Wand has been waved, therefore he must cheer.
CBO earlier noted that being bound by the rules of their office in estimates had forced them to double-count much of the Medicare ’savings,” a warning that still applies. The current so-called Medicare “savings” total about $525 billion over ten years, of which roughly $400B is double-counted. Since we can be pretty sure that those cuts will never be enacted (largely because Pelosi and Reid themselves have said they will not) you can tack on $925B right off the bat, doubling the cost right out of the gate.
Or we can assume those cuts will be made, in which case roughly half of the providers currently taking Medicare will cease doing so. That’ll cheer seniors up, won’t it?
Also not mentioned is the cost of the unfunded mandates on state governments and the private sector, which are likely to be AT LEAST as much as the cost of the bill itself. For Tennessee alone the first-year cost of that is $750 million. That’s before they get to SCHIP. Caterpillar Corp figures that they alone will lose $100M/yr to the mandates.
START OVER. DO IT RIGHT.
March 19th, 2010 at 4:29 pm
Exit question: when is the last time a CBO report was anywhere near the real cost on major entitlement programs? Answer: never, not even on Medicare Part D UNDER BUSH. Be careful what you wish for people.
Though to be sure, Part D came in under the budget estimates. But CBO was nowhere close, and it’s the ONLY entitlement that EVER came in under estimate instead of wildly over.
March 21st, 2010 at 6:21 am
MW,
I know I am being repetitive, but where, exactly, did I say the GOP was responsible for obsructing the bill? Where? No where. I did not accuse them of obstructing. I accused them of LYING. I accuse them of inciting people to action for the wrong reasons.
I don’t care a whit about obstructing. I agree with you; the Dems being a big tent cannot get their members to agree on it. OK?
My objection to the GOP is they LIE about everything. And I am not talking about the many good points brought up in this thread regarding the pointlessness of the CBO report.
I am talking about the hateful, evil rhetoric that comes spilling from the right about everything that incites the tea party nuts (not all tea partiers are nuts) to do things like SPIT on members of congress, call them N*GGERS, kill doctors who perform abortions, fly planes into federal buildings.
My problem is that the right is not interested in an honest debate; an honest debate that might have made this a better bill. They are interested in defeating the bill because it will get their party back in power so they can hypocritically spend money like drunk sailers, laugh at the notion of bipartisanship, and gorge themselves off of lobbyists dollars and ignore the ethical lapses of their own members
March 22nd, 2010 at 11:40 pm
Republicans have been wrong all year.
Heck, probably all decade – I can’t remember when they were right about anything.
But this group of gopers sticks with the lie to the very end.
Its hard to believe people back that group.