CBO says health Care bill to expand coverage to 94 percent at 10-year cost of $829 billion

CBO says health care bill costs $829B over decade

WASHINGTON — Health care legislation drafted by a key Senate committee would expand coverage to 94 percent of all eligible Americans at a 10-year cost of $829 billion, congressional budget experts said Wednesday, a preliminary estimate likely to power the measure past a major hurdle within days.

The Congressional Budget Office added that the measure would reduce federal deficits by $81 billion over a decade and probably lead to “continued reductions in federal budget deficits” in the years beyond.

The report paves the way for the Senate Finance Committee to vote as early as Friday on the legislation, which is largely in line with President Barack Obama’s call for the most sweeping overhaul of the nation’s health care system in a half-century.

Sen. Max Baucus, D-Mont., the committee chairman and principal architect of the measure, hailed the budget report.

“This legislation, I believe, is a smart investment on our federal balance sheet. It’s an even smarter investment for American families, businesses and our economy,” he said on the Senate floor.

The committee Baucus chairs is the fifth and last of the congressional panels to debate health care. The Senate Finance version has a decided middle-of-the-road flavor, shunning any provision for the government to sell insurance in competition with private industry. Nor does it require businesses to offer coverage to their workers, although large firms that do not would be required to offset the cost of any government subsidies going to those employees.

The measure would require that millions of Americans purchase private insurance for the first time, and would set up a new marketplace where policies would be available.

Federal subsidies would be available to millions of lower-income individuals and families to help defray the cost of coverage that would otherwise be out of their reach. The alternative to government-sold health care, a proposal for nonprofit co-ops that would compete with private companies, was judged largely ineffective by budget officials. Such arrangements “seem unlikely to establish a significant medical presence in many areas of the country,” they wrote.

The legislation also would ban current insurance industry practices that deny coverage on the basis of pre-existing medical conditions, and restrict companies’ ability to charge vastly higher premiums on the basis of age, gender or other factors.

The measure would be paid for through a variety of tax increases and spending cuts, including savings of hundreds of billions of dollars from Medicare, the federal health care program for seniors.

Democratic leaders in both houses are hoping to hold votes on health care on the floor of the House and Senate within a few weeks.

Anticipating approval by the Finance Committee this week, Majority Leader Harry Reid is already overseeing efforts to merge that bill with an alternative approved by the Senate Committee on Health, Education, Labor and Pensions.

Reid is subject to intense cross-pressures, not only from the members of the two committees, but also from the Obama administration and rank-and-file senators seeking to mold the legislation to their liking.

Reid also must take into account the likely need to amass 60 votes behind any legislation., the majority needed to overcome any Republican filibuster.

Baucus has expressed confidence he has the votes for his measure inside the Finance Committee, and the major lingering question there is whether Sen. Olympia Snowe, R-Maine, will break ranks with fellow Republicans and vote for it. She has been steadily noncommittal in public statements, but is under pressure from her own party to oppose the legislation.

Wednesday’s report to Baucus from CBO’s director, Dr. Douglas Elmendorf, stressed that the estimates were preliminary.

It said that by 2019, “the number of nonelderly people who are uninsured would be reduced by about 29 million,” either through private insurance or by enrolling in federal programs. That would leave an additional 25 million uninsured, about one-third of them illegal immigrants who are not eligible for coverage under the bill.

“Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent,” Elmendorf said. Elderly Americans are eligible for coverage under the federal Medicare program.

The report was released as House Democrats met privately to consider ways to hold the cost of their version of the legislation to the $900 billion 10-year limit that Obama has set.

Officials said one of the options under review would add as many as 7 million lower-income individuals to Medicaid, the federal-state health care program for the poor. It would be cheaper for the government to cover costs under that program than to pay subsidies designed to make private insurance affordable for the same group. Aides put the savings at about $25 billion over 10 years.

Unlike the measure in the Senate Finance Committee, the emerging House bill is expected to require the government to offer insurance in competition with private companies, a step designed to hold down the cost of premiums that has been highly controversial.

No final decision has been made on the setting of payments to doctors and other providers under that House plan — whether they should be set by negotiations between private companies and insurers, fixed by the government or a combination of the two.

Separately, House Republicans held a news conference Wednesday to criticize proposals for trimming Medicare, the federal health care program for seniors, by more than $500 billion over a decade. Rep. Roy Blunt, R-Mo., said the effect would be to “put Medicare in jeopardy to put money into a new program” of health care.

Blunt and Reps. Nathan Deal, R-Ga., and Adam Putnam, R-Fla., said Medicare could be trimmed to eliminate waste and fraud, but they did not say how much could safely be saved. Rep. Marsha Blackburn, R-Tenn., said she opposed any cuts in projected spending under the program.