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CBO: House Health Care Bill Will Cost $1 Trillion, Cover 97 Percent Of Americans

The Congressional Budget Office has conducted an analysis of the House's health care reform draft, and the results are largely as its authors hoped and expected they would be.

The tables included in the report summarize our preliminary assessment of the coverage provisions' budgetary effects and their likely impact on rates and sources of insurance coverage for the nonelderly population. According to that assessment, enacting those provisions by themselves would result in a net increase in federal budget deficits of $1,042 billion over the 2010-2019 period. By 2019, CBO and the JCT staff estimate, the number of nonelderly people who are uninsured would be reduced by about 37 million, leaving about 17 million nonelderly residents uninsured (nearly half of whom would be unauthorized immigrants).

House health care reform leaders were projecting a cost of one trillion dollars, and they hit that almost right on the nose. They propose to cover that cost through a combination of efficiencies wrung from Medicare and Medicaid and a surtax on wealthy Americans.

As for coverage, CBO found that the bill, if enacted would cover 97 percent of all Americans. This puts on a par--cost- and coverage-wise--with the Senate Health, Education, Labor, and Pensions Committee's reform draft, which was unveiled earlier this month.

Late update: You can read the entire report here.


32 Comments

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2 down. One to go. Senate Finance committee must step it up.

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Who are the other 3% who aren't unauthorized immigrants? Why are they excluded?

So if someone with the next flu virus is here illegally, better they be uninsured so they avoid getting help. That way the epidemic has a better change to spread. Sure, that's logical.

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Probably people who either don't know about the subsidies available for poor people, or make too much money to receive subsidies but don't buy health insurance on their own. The former is a category to be concerned about, the latter isn't. And it is hard to get poor people to actually sign up for public health programs like this, in part because they are busy, move around a lot, etc. Which is why a true single payer is better. But this is still a huge, very satisfying bill.

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Give it time. We aren't getting everything at once.

Also note that once this is going and working, hospitals and doctors will have less people not able to pay for their care, and so will have more money to pay for the few that come in but are uninsured. If my thinking is correct, then even pro-bono work will be better than now.

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And do I understand sec. 301/401 correctly that the 3% who are not covered by the plan are in fact taxed (to the tune of of 2.5% of their annual taxable income-- basically the government charges you the amount you failed to pay on a health care plan) for the privilege of not getting health care?

So there's 3% of the populace that are failed by this plan, and after we've failed to provide them health care we're fining them for it? What the hell?

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That's what happen when you drive without a license and/or insurance.

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You're going to have to unpack this some. I don't know what this tax you're talking about is, and I've been paying fairly close attention. I understood there to be no new taxes on anyone making under $280k/yr. If they managed to sneak in a 2.5% surcharge on every American without a whisper from the media, it's maybe the biggest news-cycle coup I've ever seen.

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http://tpmdc.talkingpointsmemo.com/2009/07/the-house-health-care-bill.php#comment-3527237

Part of the bill is that anyone who lives without health insurance is charged the cost of an insurance premium anyway (but doesn't get any health insurance in return). In other words the proverbial "health insurance mandate".

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It is based upon a mandate, a mandate both for individuals (except for those ruled a case of hardship as defined by the treasury,) and for employers with a payroll of more than $250,000.

From the New York Times piece today:

...Under the bill, individuals would generally have to maintain health insurance, except in cases of hardship as defined by the Treasury. Those without coverage would have to pay a penalty in the form of a new tax.

People could buy coverage on their own from the new government plan, and those with modest incomes could get federal aid. Workers who have access to insurance through their employers could sign up for the government plan if premiums for the employer coverage would take up more than 11 percent of family income.

While employers not providing coverage would generally have to pay a fee or penalty equal to 8 percent of wages, there would be some exceptions. For example, an employer with a payroll of less than $250,000 a year would not have to pay any fee or penalty.

The fee would be equal to 2 percent of wages for a company with an annual payroll of $250,000 to $300,000; 4 percent of wages for an employer with a payroll of $300,000 to $350,000; and 6 percent of wages for businesses with a payroll of $350,000 to $400,000.

In a new report, the Congressional Budget Office said that such “pay-or-play requirements” could result in the hiring of fewer low-wage workers.

Under the bill, individuals would generally have to maintain health insurance, except in cases of hardship as defined by the Treasury. Those without coverage would have to pay a penalty in the form of a new tax.

People could buy coverage on their own from the new government plan, and those with modest incomes could get federal aid. Workers who have access to insurance through their employers could sign up for the government plan if premiums for the employer coverage would take up more than 11 percent of family income.

While employers not providing coverage would generally have to pay a fee or penalty equal to 8 percent of wages, there would be some exceptions. For example, an employer with a payroll of less than $250,000 a year would not have to pay any fee or penalty.

The fee would be equal to 2 percent of wages for a company with an annual payroll of $250,000 to $300,000; 4 percent of wages for an employer with a payroll of $300,000 to $350,000; and 6 percent of wages for businesses with a payroll of $350,000 to $400,000.

In a new report, the Congressional Budget Office said that such “pay-or-play requirements” could result in the hiring of fewer low-wage workers...

If you didn't expect something like this you weren't being honest with yourself, as if you don't have strong punishment for those who don't participate, you won't get the benefits of having the healthy contributing to the pool.

Given the chance, people and small businesses take risks, opt out of systems all the time in order to save money, i.e., go without car insurance for a while, go without flood insurance on the home, don't pay the taxes for the nanny, don't collect sales tax when they sell on the internet, etc. The stronger the punishment or chance of punishment, the fewer do it. The mandate is quite strong with some things, i.e., it's impossible to buy a home with a mortgage without buying home insurance; it's not impossible to pay an employee cash or as an independent contractor to avoid payroll taxes and workingman's comp taxes. For those who have gotten used to not paying for health insurance, it perhaps be less painful if we had a public health system, only because there is the psychological thing going on for some that if it is deducted from their paycheck, they don't consider it real money.

Virtually all of us are "forced/mandated" to pay for Medicare already, through FICA tax for years before we enroll, and even continuing after enrolled, with monthly premiums for Part B unless you are poor enough for subsidy of those premiums. Unless you are working off the books without filing income tax, that is.

Yes, for those individuals and businesses who have managed to get by without paying for health insurance for a good length of time, looks like the party is probably up. They will have to squeeze somewhere else.

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The poor in that 3% would not be paying taxes, unless this 2.5% reduces the Earned Income Credit.

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That seems to improve the situation significantly-- can you help me understand how this works, though? The bit in the bill (TPM's PDF of it) I'm looking at says that the tax is "2.5 percent of the excess of— (1) the taxpayer’s modified adjusted gross income for the taxable year, over (2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.". section 6012(a) is here and... I honestly don't understand it well enough to get an "amount" of it, but it appears to list various persons exempt from income tax. Is the idea here that the 6012(a)(1) reference makes it is not a tax on income but a marginal tax on the amount one makes over the minimum amount to qualify for the income tax?

Thanks.

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Don't let down your guard on E-Verify?

We settle more new immigrants annually, than any other country in the world.

It’s our phone calls that can derail any thoughts of another AMNESTY? Fill their eardrums with public rage not to undermine E-Verify. WE WANT A PERMANENT FOR EVERYONE WHO COLLECTS A PAY CHECK! Today! As never before they are reacting and listening to millions of patriotic Americans and pro-sovereignty groups, in which E-Verify have become a solid foundation to identify and remove foreign labor. Taxpayers money should be spent on infrastructure, our own weak and sick, our veterans who are homeless, our unemployed and those who real immigrants who respect our laws. Until the inception of the Internet, Americans and legal residents had no way of communicating between ourselves. Now we can? Now we should use every means possible to elaborate, that we are well and truly seething, because they are siding with the globalists, money people, open border subversives.

We are not bigots because we love our country and don't want to turn into a third world society. We do not want to live in an OVERPOPULATED, congested land. We have been paying for years--illegal immigrant’s support, instead of the procurers--the businesses that employ them. Our charged voices have set-off a chain reaction amongst the Washington political masses, because we actually turned the tables on the anti-sovereignty, pro-illegal immigration organizations. They are building the original border fence as originally planned, not faulty short-cuts? But we have enemies who have ignored their oath of office and plan to weaken any amendments. As with the 1986 immigration AMNESTY law that was never broken, but disrupted and never enforced. Now they want another AMNESTY or immigration reform package.

It was the politicians who caused the problem of between 13 to 20 million settling here and unable to support themselves. Lawmakers can now stew in their own juices, because we refuse--absolutely refuse, to be sold on another path to citizenship, as it will be yet another higher tax burden on taxpayers. California being just one of many Sanctuary States--that has produced massive budget deficit problems, cause by the huge influx of illegal poor living on state and federal welfare.

Senators and Representatives aides are unhappy with the constant bombardment from millions of Americans, but they are the bridge that must be crossed everyday? No respite, no retreat? Keep up the pressure, till their ears bleed? Keep up the invaluable rumblings in the beltway at 202-224-3121 THAT THE POPULATION IS MAD AND NOT GOING TO TAKE IT ANYMORE! Learn who your enemy is and who your friends at NUMBERSUSA, JUDICIALWATCH, CAPSWEB, HERITAGE FOUNDATION & AMERICANPATROL

ATTENTION! Because of the massive payments to illegal immigrants in California, their is a petition. Google--TAXPAYER REVOLUTION. Very few newspapers will mention this activist petition. When is the American flag going to fly again in the once Golden state?

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What? I can't hear you.

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Better suited in its own free-standing blog.

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We are doing damn good and we are very close. If you don't realize this yet this is FANTASTIC NEWS for reform. Time to get Finanace to shape it up and we will be well on our way to getting this done.

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So what I gather from this is that this is the total expense side of the equation. But the only way to see the whole picture is to look at the cost savings as well. Do those get calculated and shared?

Where can we find a complete 10 year picture of $1T in expenses, $xB in increased efficiencies, $xB in reduced costs through preventative care, $xB in public plan policy revenues, $xB in savings from nonpaid (emergency) care and finally $sB in increased taxes? In other words, something that resembles a business case.

I really think the $1T pricetag is misleading if you don't get to see the whole picture. And that includes private sector savings as well.

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In two words.........HELL NO. Much more savings then what is being said here which makes it a bit harder to pass, but just the more sweeter once we do. You hit the nail right on the head though, there is a ton of money saved from what you listed but it's hard to calculate with hard numbers.

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I'm sure it is hard to calculate but surely someone has a good estimate, right? Please tell me we're not doing this all based on theory and a wing and a prayer. Surely the gov't or various think tanks have done studies. I'd like to see them.

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Most of the think tank work, (I think), has been done on studying a single payer system and how it would reduce costs of our healthcare system. Most figures I've seen for that show about $500B to $700B savings per year. I haven't seen much on a 'public option' and its effect, mostly because the 'option' hasn't even been defined by the various committees working on it.

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So what's the 10 year cost of doing nothing?
Is this $1T more than the option of doing nothing?

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Exactly. That's why I mentioned business case because that's where you would lay out your two (or more) alternatives side by side.

The public needs to have access to this information. And if the Rs don't submit a real alternative, then we have to assume they are advocats of the status quo and we compare the plans that way.

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Healthcare has gone from 14% to 17% of GDP in 15yrs. IT is projected to get worse.


http://www.nchc.org/facts/cost.shtml

You do the math.

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So what are the odds that sometime in the next 24 hours, a single MSM outlet will make a point of explaining that we don't have to come up with all trillion dollars in the first year, but, rather that its spread out over ten years?

I'm going to go with zero chance that will happen. The word "trillion" stuns journalists into a state of Jarjar Binks level stupidity that prevents them from engaging in any further conveyance of useful information to their viewers/readers. "Trillionz! Deyza said a 'trillion' dollerz hasta be spent on health. See? I says it againz: 'trillion'! Dasa big number! Trillion!"

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I would be happy if they mentioned the offsetting savings from not having to pay the current health insurance premiums.

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You said it. I can just hear Republican-apologist David Gregory salivating over "trillions" right now.

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Just a reminder, the CBO and other government assessments are only looking at government spending and/or savings. That's just the way it is set up. There are studies out there about total expenses and savings. Might want to search Ezra Klein's and Paul Krugman's blogs. Here's rough approach though: Private insurers spend 20%+ on administrative costs (including profits paid to shareholders). Medicare and VA costs are 2% or 3%, I believe. So find a number for total costs of private health care and multiply by .20, and that will give you a starting estimate of the savings. [Caveats: 1) not all private health insurers are going to disappear overnight, but if a strong plan goes through, their names will appear below lamplighters and livery stables in time, and 2)savings will be even greater because of efficiencies of scale, larger pools, and the negotiating power of the government to obtain lower costs from providers]

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How many of there nonelderly will be children?

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The Republicans will be hitting the airways with their own statistical analyses from Rush and Shawn and...

It will go something like this: Always... never... all... none.... everyone... nobody...

those absolutes which allow educate folks to realize that there is little in the way of intellectual thought going into anything being spewed from their mouths... IMHO

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O.K., of the $1.024T over 10 years, how much of that is profit for the insurance companies?

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Insurance mandate. They have 46 million new customers.

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Setting aside the business model savings, basic healthcare for 97% of Americans will greatly increase preventative care and reduce long term medical costs for serious conditions that can be addressed cheaply at that their inception.

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This plan costs less than the Iraq War in terms of total cost and elapsed time of cost. Stopping that occupation alone would pay for the plan. Not to mention the savings to the taxpayer in the form of lower costs.

This has to happen. I am proud of the House right now. Nany Pelosi deserves a lot of credit for bringing a high-quality piece of legislation for the Senate's consideration. My hope is that all poison pills presented by Senate amendments will be voted down.

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