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CBO: Senate Bill Costs $849 Billion, Major Deficit Reducer

Brian Beutler | November 18, 2009, 4:52PM

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Sen. Majority Leader Harry Reid (D-NV)

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Democratic leadership has distributed figures to reporters from a CBO analysis of Senate health care legislation. The numbers affirm what we reported this morning--that Majority Leader Harry Reid is very pleased.

The health care bill--which includes an opt-out public option--will require $849 billion over 10 years in new spending, to be paid for with cuts to Medicare, while reducing the deficit by $127 billion.

In that time it will extend coverage to 31 million Americans--94 percent of citizens will be covered by 2019.

Over the second 10 years, CBO projects even greater cost savings--up to $650 billion, with the caveat that after 10 years, their analyses become highly uncertain.

This meets all of President Obama's goals, and, as has been the pattern during this legislative process, the Senate bill comes at a lower cost, and with greater cost-savings than the House bill, while the House bill covers more Americans.

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63 comments

Recommend Recommend (3)

November 18, 2009 5:04 PM

$50 billion more plus an effective employer mandate, and you can cover 6-8 million more people and probably with better coverage, too. This bill is going to need work before final passage.

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November 18, 2009 5:05 PM in reply to jimbomoron

Then again, if the bill allows private insurers in the Exchange to cover abortions, well then what else matters?

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November 18, 2009 5:21 PM in reply to jimbomoron

Right. In other words, the Senate should just pass the House bill minus the Coathanger amendment.

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November 18, 2009 5:48 PM in reply to Moose49

I prefer the Senate Finance Committee's financing mechanisms over the House's as well. But everything else -- the House bill is going to be so much more preferable to the Senate's bill.

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SilvestriWoman

November 18, 2009 5:38 PM in reply to jimbomoron

Private insurers don't mind covering more people, as long as they're male. Women just cost too much!!!

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November 18, 2009 5:15 PM

I am curious to find out what it will do for the 2nd decade in terms of deficits. I predict it will decrease it by even more money any where from a half a trillion to a trillion.

IMO, there is NO excuse for Landrieu, Nelson, or Lincoln to NOT to vote to proceed on this bill.

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ohyeathatsright

November 18, 2009 5:21 PM in reply to Maritza

As Jimbomor pointed out. They've got an excuse ready-made: Abortion

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mans_best_friend

November 18, 2009 5:23 PM in reply to Maritza

Second decade? The numbers in this projection more than about 2 years out are nothing more than WAG's.

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November 18, 2009 7:35 PM in reply to Maritza

650 BILLION dollars. Dr.Evil would LOVE that number

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November 18, 2009 5:21 PM

Let the whining, complaining, and rhetoric begin from the GOP

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November 18, 2009 5:33 PM in reply to neesy08

What could they possibly have to complain about. It's not like this thing guts Medicare in order to "save" money (what a joke).
Oh, wait....
"The health care bill--which includes an opt-out public option--will require $849 billion over 10 years in new spending, to be paid for with cuts to Medicare."

And it's not like this bill has huge tax increase or anything. Oh, it does? My bad.

Everyone here knows that half-trillion dollar cuts in Medicare are not polically feasible. So the notion that this thing will reduce the deficit is pure fantasy.

But hey, the bill as presented by Reid will gut Medicare and have huge new tax increases. What could anyone possibly whine about, at all.

In an urelated note, if your avatar includes a picture of Barack Obama, using the word sycophant to describe you is an understatement on par with calling the planet Jupiter big.

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November 18, 2009 5:36 PM in reply to masanf

Masanf: is it a slow day at Politico?

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November 18, 2009 5:51 PM in reply to Ohmmade

Redstate.

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November 18, 2009 5:57 PM in reply to CT Voter

the local "subway"

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November 18, 2009 6:57 PM in reply to masanf

Pond scum is back -

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November 18, 2009 5:26 PM

I wonder what their standard for FPL is. If it is 300% just like the SFC bill it WON'T be affordable and it saves money on the backs of the middle class. More details needed.

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November 18, 2009 5:26 PM

release the cbo report all ready.

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November 18, 2009 5:27 PM

Well the real insurance and drug whores will have some fast talking to do to try and tell their big lies about this bill. Who isn't for insuring more people? Who isn't for reducing the deficit?

Whores get ready ..... whores get set ...... BANG! Whores start lying !!!!

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November 18, 2009 5:29 PM

"...will require $849 billion over 10 years in new spending, to be paid for with cuts to Medicare...:

I wonder if the AARP will be scraping the egg of their face, or if somebody will have to do it for them. And the notion you can pay for insurance for millions and millions of Americans with federal dollars and not increase the deficit without massive cuts and massive tax increases is just pure fantasy.

Thank God we have Senators who have stated, some such as Lieberman explicitly, that this thing won't pass a cloture vote.

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November 18, 2009 5:34 PM in reply to masanf

End a few wars, repeal Bush tax cuts for the rich, and I think we've got some cash layin' around. But that doesn't fit your narrative, so you'll just ignore this comment.

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mans_best_friend

November 18, 2009 5:34 PM in reply to masanf

The Medicare cuts ARE NOT benefit cuts. They're reductions in the overages paid to Medicare Advantage providers. But then AARP already knew this. Apparently you didn't.

Want a spatula to scrape that egg off YOUR face?

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November 18, 2009 6:59 PM in reply to mans_best_friend

He will need more than a spatula.

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November 19, 2009 10:47 AM in reply to mans_best_friend

I may be wrong...but, I think there is more than just "Medicare Advantage".

From CBO...

"Permanent reductions in the annual updates to Medicare’s payment rates for most services in the fee-for-service sector (other than physicians’ services), yielding budgetary savings of $192 billion over 10 years. (That calculation excludes interactions between those provisions and others—namely, the effects of those changes on payments to Medicare Advantage plans and collections of Part B premiums.)

Setting payment rates in the Medicare Advantage program on the basis of the average of the bids submitted by Medicare Advantage plans in each market, yielding savings of an estimated $118 billion (before interactions) over the 2010–
2019 period.

Reducing Medicaid and Medicare payments to hospitals that serve a large number of low-income patients, known as disproportionate share (DSH) hospitals, by about $43 billion—composed of roughly $22 billion from Medicaid and $21 billion from Medicare DSH payments."

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November 18, 2009 6:09 PM in reply to masanf

On the other hand, if seniors will want the rest of us to make some sacrifice to save Medicare in 9 years, it would not seem wise for them to raise too much stink about funding health care reform for everybody else now.

But did Reid's bill pay for it all with Medicare? Sounds like a handwave to just get this thing passed so the real funding mix can be hammered out in reconciliation.

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November 18, 2009 5:29 PM

It cuts the 2nd decade deficit by $650 billion too!

http://www.politico.com/news/stories/1109/29679.html

"The Congressional Budget Office also gave Reid some good news on the deficit – saying his plan would reduce the deficit by $127 billion in deficit reduction in the first 10 years and $650 billion in the second decade. It would cover 94 percent of all Americans."

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mans_best_friend

November 18, 2009 5:36 PM in reply to Maritza

You left out the good part:

"...with the caveat that after 10 years, their analyses become highly uncertain."

LMAO

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November 19, 2009 10:54 AM in reply to Maritza

I don't think so....

"CBO expects that, during the decade following the 10-year budget window, the increasesand decreases in the federal budgetary commitment to health care stemming from this legislation would roughly balance out, so that there would be no significant change"

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November 18, 2009 5:30 PM

"to be paid for with cuts to Medicare"

GOP ready-made talking point right there. They don't even have to play their abortion card this time around.

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November 18, 2009 5:48 PM in reply to Ohmmade

Yes, Dems really seem to have a tin ear on how all the funding proposals play politically. There will be campaign ads about taking hundreds of billions from Medicare, which is already going to be in trouble in 9 years. The mandatory coverage part is going to create a permanent class of Democrat haters whose hatred is renewed every time they pay a premium, even if they are getting coverage they could never get before at a subsidized price to make it affordable. Finally, the proposal to tax existing insurance plans is certain to make the 85% who have insurance nervous, even if only a small percentage ever actually meet the threshold to pay the tax.

The funding side of this has always been full of gimmicks ever since somebody decided that they just can't raise taxes on the rich back to what they were under Reagan.

The cost savings part has always been a little shakey, too; competition from the public option was supposed to keep insurance companies honest; but it has been whittled down to a small program of questionable bargaining power that only a few can join -- if there is a public option at all. Maybe it would be better to just mandate that insurance companies must spend 90% or more of all money they collect on actual medical care.

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mans_best_friend

November 18, 2009 5:55 PM in reply to condew

"Maybe it would be better to just mandate that insurance companies must spend 90% or more of all money they collect on actual medical care."

I'm pretty sure that got included in the House version (at 85%).

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November 18, 2009 6:02 PM in reply to mans_best_friend

yeah but it expires when the exchanges are set up

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mans_best_friend

November 18, 2009 6:12 PM in reply to Indie Pro

That's true, but it's a number of years away. If the exchanges provide insufficient competition, it can always be re-enacted.

Big legislation like this is never perfect. There are always compromises. That's just reality. However, they move things in the right direction, and are almost always followed by refinements and fixes for things that aren't anticipated in the initial bill. Look at the number of modifications to Medicare that have been enacted over the years that have made it a far better program than when it was enacted. This is not the end of the reform road. It's the beginning.

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November 18, 2009 6:15 PM in reply to mans_best_friend

2013 is when it is.

I like that you guys advocate things in one comment, and then when it turns out not to be true, really, you're all like oh well, soon we'll get back to that.

What’s the point of including it in the legislation if it’s not going to apply once the bulk of the bill takes effect?

To mislead and lie, maybe?

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mans_best_friend

November 18, 2009 6:20 PM in reply to Indie Pro

It's intended to be a stopgap to keep insurance costs in check in the meantime. After that the exchanges are supposed to do the same job by providing competition, so mandating minimum loss ratios won't be necessary. If that supposition doesn't turn out to be true, the issue can always be revisited.

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November 18, 2009 6:23 PM in reply to mans_best_friend

providing competition? How? Only people without insurance can even get into the exchanges. Haven't you heard? Obama promised that Health Insurance Reform wouldn't affect people's current polcies, that's why the PO will suck and not keep anyone honest.

And then there is this, when you told the commenter above that it was in the House bill, why didn't you tell them it was only a stop gap measure if you knew that is what it was? Polishing a turd I suspect, like so many aroudn here.

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mans_best_friend

November 18, 2009 6:33 PM in reply to Indie Pro

If it doesn't provide competition, why do you keep insisting on it?

The Republicans have been absolutely right about one thing - the PO is the nose under the tent. It's the beginning. Over time it will be expanded because more and more people are going to want in. Read your history. That's the way major reforms always work. It's never a large-scale reform. It always starts smaller and expands.

Patience, grasshopper.

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November 18, 2009 6:50 PM in reply to mans_best_friend

I sincerely doubt that. I don't see it having the scale to compete with big insurance companies (because noone's preenrolled and providers aren't required to accept it, even if they accept Medicare and Medicaid patients). And it will be subject to adverse selection, insuring a preponderance of sicker patients. It will have to make a profit in the first 10 years of its existence, since it will have to repay the start-up capital. And it's expected to be more expensive than comparable private insurers.

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November 18, 2009 7:01 PM in reply to mans_best_friend

It's impossible to explain anything to Indie Pro. He (it) is the consummate negative whiner.

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November 18, 2009 8:38 PM in reply to mans_best_friend

To some extent I agree that improvements can follow, but I doubt anybody will want to touch health care again very soon.

My main concern is that the optics of the reform will help cost us the 60 seat majority in the Senate and essentially end Obama's term in 2010 with a Senate that will block everything.

2010 will be tough already, explaining that the stimulus kept the Bush depression from getting much, much worse while there are still no new jobs being created; but then we have to explain why making someone shell out $4000 for insurance is the good deal that it is. Myopic voters will just see no new jobs and a premium that squeezes their budget; and of course Republicans will be there to turn that into catchy phrases and convince the press there is no need to look any deeper.

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Walter Mitty

November 18, 2009 5:32 PM

Lieberman is not saying he'll filibuster any bill with a PO.

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mans_best_friend

November 18, 2009 5:38 PM in reply to Walter Mitty

He's not saying anything. I thought it was curious that Reid had a special meeting with Landrieu, Lincoln and Nelson, but Lieberman wasn't included. There's a message there, but I have no idea what it is.

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November 18, 2009 5:53 PM in reply to mans_best_friend

Maybe Joe's deep desire to investigate Fort Hood gave Reid some leverage with Joe.

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mans_best_friend

November 18, 2009 5:59 PM in reply to CT Voter

Reid seems oddly unconcerned about Lieberman...almost as if he has some kind of leverage he knows Joe can't resist. I have no idea what that might be. Whatever it is, he sure as hell isn't going to make it public.

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November 18, 2009 8:11 PM in reply to mans_best_friend

Yeah, he's been that way since that "Joe Lieberman is the least of Harry Reid's problems" comment. Some leverage as you say, or perhaps, just perhaps, he has Snowe on his side? At any rate it's really weird.

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lifeofreilly

November 18, 2009 6:03 PM in reply to mans_best_friend

That's because Lieberman has essentially committed to allowing the bill to come up for debate (though not necessarily for a vote when all is said and done), but the other three hadn't even agreed to voting for cloture on letting the debate begin.

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November 18, 2009 5:34 PM

Great news actually. Now let's pass it and reconcile them.

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Cool Blue Reason

November 18, 2009 5:48 PM

Anyone have the text of the bill yet?

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November 18, 2009 5:59 PM in reply to Cool Blue Reason

no actual CBO, no bill so far.

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November 18, 2009 6:11 PM

Wouldn't want to miss another opportunity to be cynical, but you'd don't get something for nothing. If this bill is a major deficit reducer, there must be a lot of nothing somewhere in that bill.

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November 18, 2009 6:47 PM in reply to bluebell

I knew you'd be here whining because it cuts the deficit. If you weren't so tied to your bullshit ideology, you'd understand why providing healthcare is good for the budget over the long run.

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November 18, 2009 6:59 PM in reply to FreeRider

Yes, well as they say, in the long run we'll all be dead (healthcare or not). Your faith is inspiring.

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November 18, 2009 9:44 PM in reply to bluebell

Duhhhh. The deficit is "the long run", genius. You really should learn basic economics before making a complete fool of yourself. Ooops. Too late!

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November 18, 2009 7:03 PM in reply to FreeRider

Democratic leadership is hell bent on passing something that says 'Health care reform' on the cover. This, like the stimulus package, strikes me as weak tea. We'll be back at this in a few years, but probably with a deadlocked Congress which won't be able to pass anything. What a wasted opportunity.

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VivaAmerica!

November 18, 2009 6:51 PM in reply to bluebell

From FreeRider in another TPM post:

"Cue Bluebell whining that the Democrats are sell-outs because the bill reduces the deficit. Healthcare is only liberal and/or a good thing if it increases the deficit and raises taxes."

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November 18, 2009 6:58 PM in reply to VivaAmerica!

Fuck Bluebell

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November 18, 2009 7:17 PM in reply to VivaAmerica!

I didn't believe Dick Cheney when he said the war in Iraq would pay for itself either but a lot of Democrats bought into that fantasy too.

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November 18, 2009 9:43 PM in reply to bluebell

1. Is Dick Cheney the CBO?

2. Please give us a list of the Democrats who claimed that the Iraq war would pay for itself.

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November 18, 2009 8:17 PM in reply to VivaAmerica!

lol.

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November 18, 2009 9:41 PM in reply to VivaAmerica!

Yep. I knew she'd say that. She's so predictable.

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November 18, 2009 6:53 PM

Wonderful news! Now lets pass a damn bill.

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November 18, 2009 7:33 PM in reply to ru4862

6 months ago. This is taking way toooooooo long and there are so many other things that need to be done yesterday. Come on dems, get with the program.

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November 18, 2009 8:31 PM

Don't get excited. The REAL question is does it make HC affordable. That remains to be seen.

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November 18, 2009 10:24 PM

There is only one question that really matters: Does this bill have the potential to create a fourth political third-rail (Social Security, Medicare, Medicare Part D being the first, second, and third third-rails)? As long as it does, its imperfections can be perfected in the medium term (5-15 years). If it does not, it is worthless. Third-rail status is the necessary insurance against the GOP nuts from being able to ever repeal it.Ted Kennedy ultimately understood this. Obama understands this. This bill will create that necessary third-rail. When will utopian progressives understand this?

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