CBO Chief Says Health Care Legislation Won't Lower Health Care Spending Rates.... But Why?
CBO chief Doug Elmendorf testified before the Senate Budget Committee today and spoke words that will invariably come back to haunt Democrats. "In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount," Elmendorf told chairman Kent Conrad (D-ND). "On the contrary," he said, "the legislation significantly expands the federal responsibility for health-care costs."
This is true, but it's also more complicated than that. First of all, the CBO has analyzed two bills so far: The Senate HELP Committee's bill and the House's so-called tri-committee bill. But, crucially, the HELP Committee doesn't have jurisdiction over Medicare and Medicaid where many of these savings can--and likely will--be found. And, just as crucially, the CBO hasn't scored those parts of the House bill either.
"The analysis issued today does not take into account other parts of the proposal that would raise taxes or reduce other spending (particularly in Medicare) in an effort to offset the federal costs of the coverage provisions," Elmendorf wrote with regard to the House bill on the CBO's blog two days ago. In fact CBO has only analyzed "the major provisions related to health insurance coverage that are contained in draft legislation." Most of the provisions that would reduce the trajectory of federal health care spending, though, will not be found in the sections of the legislation that pertain to expanding coverage.
But that doesn't mean either the House or the Senate is working on legislation that will maximize the reduction in federal health care spending. As Ezra Klein notes, many of the hypothetical provisions that would work dramatically on that score have been eschewed for political reasons.
Words are words, though. Conservatives are already beginning to use the words of an anonymous Democratic aide against the House's health care reform bill. And they'll likely latch on to this as well.
Josh
Matt
Eric
Brian
This isn't going to help.
July 16, 2009 2:49 PM | Reply | Permalink
This is a MAJOR set back.
Now let's see what the Senate Finance committee comes up with.
July 16, 2009 3:02 PM | Reply | Permalink
bring on SINGLE PAYER then! Have them score a SINGLE PAYER bill.
July 16, 2009 3:32 PM | Reply | Permalink
Well they should definitely score Single Payer, but you have to read past the trickery in the words of the CBO.
Not Reducing FEDERAL expenditures doesn't matter at all ... if the nation as a whole spends less on health care and gets more and better health care for the dollars it spends.
The question is under which plan will more people be covered with better outcomes for less money. And the answer, without a shadow of a doubt, is Single Payer [or at least not-for-profit payers]
July 16, 2009 5:42 PM | Reply | Permalink
Of course this is true, but I think it's going to take a few more years of rising prices and falling outcomes before a majority of Americans are ready to demand single-payer health care.
I'm not sure how I feel about Kucinich's amendment to let individual states set up single-payer systems, but at least we'd see some progressive states do so and show the rest of the country how good it can be. I don't see Obama signing a bill that allows individual states setting up their own single-payers system, though.
July 16, 2009 5:58 PM | Reply | Permalink
Absolutely. Please see our Healthcare post in the Cafe. We are making efforts to send people to the Single Payer Rally in DC on July 30th. There is a plan to connect with every single member of congress that day about single payer.
We know we need single payer but we are going to have to fight for it. As long as we allow Washington to leave it out of the discussion, we lose.
July 16, 2009 6:41 PM | Reply | Permalink
It's not that big of a setback.
Jake Tapper, noted on his twitter account, that he spoke to the WH and they told him that Elmendorf was referring to the HELP bill, which has no access to medicare and medicaid portions of the bill (part of Finance Committee) and that is where the majority of the savings would come from.
July 16, 2009 3:32 PM | Reply | Permalink
Fee for service is probably a large part of what Elmendorf was talking about, but stepping back a bit, I am becoming more than a little concerned with what seem to be off the wall analyses from CBO
That's where I'd expected a major contribution from Orzag
July 16, 2009 4:41 PM | Reply | Permalink
Might want to update this based on his House testimony.
John
July 16, 2009 6:49 PM | Reply | Permalink
CBO dinged them before when the health care reform cost was 1.6 trillion dollars.
Now the bills have to be IMPROVED so that they bend the curve. If they do then they will have the Nurses, the AMA, Pharma, the Hospitals, and then CBO and it will be a go!
July 16, 2009 7:22 PM | Reply | Permalink
Right wing hack, Ron Christie, is more concerned with the cost of health care reform, and less concerned with people dying.
Here is the clip.
http://progressnotcongress.org/?p=2194
July 16, 2009 8:23 PM | Reply | Permalink
Even if it's a net wash (as pointed out by others, we don't know enough yet to make that determination), it's still superior to the status quo.
Non story. Doing nothing is far worse.
July 16, 2009 9:38 PM | Reply | Permalink
Want to control cost? Let the public option control pricing. Problem solved.
July 16, 2009 11:30 PM | Reply | Permalink
OK, as I understand it we'll get an extra 35 million people insured with only small decreases in spending. And the CBO hasn't even examined the sections of the plan that contain the spending reductions or tax increases that will greatly affect the equation.
Maybe I'm not understanding something, but that sounds like a win to me.
July 16, 2009 11:31 PM | Reply | Permalink
The CBO probably is correct. A concrete example is a lead story in today's St. Paul Pioneer Press. http://www.twincities.com/localnews/ci_12847918?nclick_check=1
The local trauma specialty hospital opened a new ER. The first patient was a Medicare patient admitted for back pain. This quote says it all:
"She's been having back pain — since Monday anyway," said her husband, Galen Cain, 83, of Forest Lake.
Although Regions operates one of three major trauma centers in the Twin Cities, it is the Cains of the world with nagging injuries and illnesses who comprise most of the visits to the St. Paul hospital."
The cost of visiting the ER rather than a primary care provider is one of numerous factors contributing to escalating medical costs.
July 16, 2009 11:59 PM | Reply | Permalink
The only way to increase coverage and decrease the trajectory of the national spending on health care, of which the federal portion is a very big part, is to put the for profit health care insurance industry, with the gold plated place settings and private corporate jets related on Moyers recent piece with the former CIGNA executive, out of business forever.
That step is not part of any current legislation, although the current bills may ease us in that direction.
July 17, 2009 12:51 AM | Reply | Permalink
Of course, the House bill means more federal spending.
That is why the bill raises taxes on the rich to pay for the spending.
The bill is supposed to slow the rate of increase in private-insurance-premiums through the competition of a public option.
It isn't supposed to cause the federal government to spend less on health care than it does not.
July 17, 2009 1:51 AM | Reply | Permalink
Actually Peter Orszag wrote a letter to the House saying that their bill did not go far enough in terms of reigning in costs of health care.
July 17, 2009 6:36 AM | Reply | Permalink
Perhaps we could ask the CBO to score the war in Afghanistan. Oh, but I forgot, the war in Afghanistan is a national priority, while the health of US citizens is not.
July 17, 2009 4:44 AM | Reply | Permalink
he probably took a pay off to scuttle the bill. It's clear by his testimony he has an agenda.
C
July 17, 2009 8:35 AM | Reply | Permalink
It's too bad John Edwards (remember him?) couldn't keep his dick in his pants - he was 100% correct that we will never get real reform (of anything) in Washington until we destroy the power of the business lobbies to buy off Senators and Congressmen.
It's really disgusting - Edwards had an affair and his career was ruined. Countless Republicans have had affairs and nothing whatsoever happens to them. The only Democrat who somehow escaped the prurient puritanism of the SCLM was Clinton.
July 17, 2009 10:28 AM | Reply | Permalink
For those of you who are late to read this post, it should be noted that a NEW CBO report was issued Friday Night! It didn't hit the mainstream news (no surprise there), but it should encourage the DEMS!
http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf
July 19, 2009 2:32 PM | Reply | Permalink