Posts Tagged Congressional Budget Office

Beltway Math: How To Count Like Nancy Pelosi

Around my house these days, we are working on certain math concepts that have proven irrefutable over the centuries. This week, for example, we have concentrated on multiplication facts, such as 2×3=6. At the parent-teacher conference this week, I was told how important it was to understand these concepts.

Today’s coverage of the House health reform bill makes me think that some members of Congress should take a refresher course in basic math, such as how to add. Today’s Roll Call reports on the real cost of the House bill:

“The House Democrats’ health care plan would cover 36 million more Americans at a cost of $1.055 trillion over the next decade, while slashing the federal deficit overall by $104 billion, according to a preliminary Congressional Budget Office score released late Thursday.

The cost of the bill was a concern to fiscally conservative Blue Dog Democrats, who sent a letter to the CBO asking additional questions about their estimates and what additional measures could be taken to reduce the overall spending on health care.

Speaker Nancy Pelosi (D-Calif.) had touted the bill as costing $894 billion when she released it online earlier in the day, but that number nets out $167 billion in new pay-or-play taxes on individuals and businesses. Pelosi’s office had also said the bill would cut the deficit by $30 billion, but the CBO score came in much better.

The $1.055 trillion cost is offset by $740 billion in new taxes and revenue and a net $426 billion in cuts in spending, largely in Medicare.

The CBO also estimated that the deficit would continue to shrink slightly in the second decade after the bill is adopted, a key issue for many moderate Democrats, although it said that any estimates that far out have considerable uncertainty.

That $1.055 trillion figure only includes the coverage portions of the bill, down from about $1.2 trillion in the original bill.

Other pieces, including the cost of closing the “donut hole” in the bill for seniors under Medicare, come on top of those figures.

The bill also excludes an estimated $245 billion in costs for preventing a 21 percent cut to doctor’s pay under Medicare. Democrats dropped that provision from the bill and plan to move it separately so that they can say the larger bill does not add to the deficit.”

So, $1.055T – $740B – $426B + $245B + ? = $894B. Got it?

Remember, friends, this is courtesy of the same people who are sure that Medicare fraud is $60B per year that Federal agencies cannot seem to stop. What is your prediction when the Federal government adds another $1,000,000,000,000 into the pot?

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The Joint Committee on Taxation’s Preliminary Report on Healthcare Reform Tax Effects

pdf   The Joint Committee on Taxation’s preliminary report on the “Estimated Revenue Effects of Various Health Proposals”.

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The Trouble with Massachusetts

My mother lives on Martha’s Vineyard.

My wife and I always chuckle to hear her and others islanders refer to Massachusetts as “America”, as if the island has seceded from the Commonwealth and, incidentally, the United States. As I contrast the “reform” plans in Washington with the reality of the Massachusetts Connector from which key parts of the Senate HELP and House Tri-Committee plans are derived, I wonder if all of the residents of the Commonwealth are wondering what “America” is considering.

As outlined in The New York Times article entitled Massachusetts Takes a Step Back From Health Care for All, the Commonwealth has decided that they cannot provide the coverage that they promised. As a result, 30,000 legal immigrants are set to lose their coverage. Coincidentally, The New York Times reports that the Congressional Budget Office estimates House Tri-Committee bill released yesterday will leave only 17,000,000 people uninsured in 2019, of which nearly half would be illegal immigrants. Similarly, both legislators in the House and in Massachusetts believe that a surcharge on the wealthy, aka a tax increase, is the only way to make the math work.

It was not so long ago, even in 2008, when the federal government was in the habit of actually following the laws passed by Congress, such as the United States Bankruptcy Code. In that bygone era, some might have wondered whether the Constitution or the Declaration of Independence might weigh against the “reform” plans fashioned in the House in which a very small minority was hectored into financing benefits for the majority. Others might have pondered whether a National Institute for Health and Clinical Excellence-like program might constitute an unwarranted invasion of privacy, which many hold dear when applied to Roe v. Wade. In today’s world, however, federal judges will not uphold the United States Code in the GM bankruptcy, so I am skeptical that they will do so in healthcare reform.

What to do in response? As any good lawyer knows, when the law favors your side, argue the law; when the facts favor your side, argue the facts. The facts are that this great country was established by immigrants. It is my view that the enduring legacy of America has resulted from and depends upon the diversity and vibrancy that immigrants bring, whether physicians or scientists or engineers or farmers or laborers or artists. To think that the immigrant, and especially the legal immigrant, will bear the brunt of failed healthcare reform is appalling. To think that the Democratic Party will deliver the blow is, I suppose, their version of Nixon going to China.

True healthcare reform will not disadvantage the wealthy, and it will not break the back of the immigrant, who not so long ago were you and me. Shame on all of us if we allow that to happen.

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CBO Releases Preliminary Analysis of the Insurance Coverage Aspects of the House Tri-Committee Bill

pdf     CBO Releases Preliminary Analysis of the Insurance Coverage Aspects of the House Tri-Committee Bill

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CBO Releases Brief on the Effect of Changes in the Health Insurance System on the Labor Market

pdf     CBO Releases Brief on the Effect of Changes in the Health Insurance System on the Labor Market

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Healthcare Reform: The New York Times vs. The New York Times

On occasion, I wonder if the editorial page of The New York Times believes that its audience is comprised of the demographic that the rest of the paper touts to advertisers. With respect to healthcare issues, the Op/Ed page is in stark contrast to its healthcare team of Reed Abelson, Sheryl Gay Stolberg, Robert Pear and Jackie Calmes.

Compare the following:

  • HELP Is on the Way, an opinion piece published today by Paul Krugman, the economist and Nobel Laureate. The crux of his assertion is that the Senate HELP Committee was unfairly derided in mid-June when it released it first draft proposal; all the Senate HELP Committee had to do was finish drafting the bill, and, magically, the cost of the bill was reduced to $597B. I quote:  “The budget office says that all this would cost $597 billion over the next decade. But that doesn’t include the cost of insuring the poor and near-poor, whom HELP suggests covering via an expansion of Medicaid (which is outside the committee’s jurisdiction). Add in the cost of this expansion, and we’re probably looking at between $1 trillion and $1.3 trillion.” Oh, right, $600B for health reform that does not cover the cost of insuring the poor and the near-poor, which I thought was the point for people like Krugman. Not to worry, “much of the expense can be offset with straightforward cost-saving measures, like ending Medicare overpayments to private health insurers and reining in spending on medical procedures with no demonstrated health benefits”. I am curious whether the “serious health economists” he references think his prescription is just a little too easy; I am sure what serious healthcare executives think.
  • In contrast, the recurring feature “The Work-Up” reflects a more serious view of the issues before the country. For example, read Jackie Colmes’ article Revisions to Health Bill Are Unveiled by Democrats, which more clearly and accurately describes the Congressional Budget Office’s Analysis of the HELP Bill, or her article Obama and Congress Clash on How to Pay for Health Care. Another example is Reed Abelson’s article Insured, but Bankrupted by Health Crises, which we have posted about before.

I am well aware of the historic difference between reporting and editorials, and I hope that the difference between the two is easily distinguishable in this blog. Even so, healthcare reform is too important for Nobel Prize winning economists to use those credentials to make glib policy arguments. Americans, and particularly the uninsured, deserve better.

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Healthcare Reform or BBRA 97 Redux?

As reported earlier today by Roll Call and as set forth in the CBO’s Estimate of the Cost of  Senate HELP Bill, the Congressional Budget Office has scored the cost of the Senate HELP Committee’s mark-up of the proposed Affordable Health Choices Act at $611B, a significant decrease from the $1T estimate on June 15.  

Based on the CBO’s letter, the “savings” result primarily from (a) reducing the threshold for subsidies for families and individuals under health insurance exchanges from 500% to 400% of the federal poverty level, and (b) reducing the amount of the subsidies for those who qualify.

What has not changed from the June 15 CBO estimate to today’s estimate is that a substantial number of Americans would remain uninsured. The most favorable year under the revised bill is 2016, when “only” 32M people would remain uninsured.

Most providers that I know continue to take a wait-and-see approach on this front. I believe that the continuing skepticism over the implementation of a public plan is likely to reinforce this stance. In turn, I continue to believe that the provider community remains at substantial risk, but not where they think.

There is just not a way to implement a true “public option” and remain budget neutral without taxing employer-sponsored healthcare, and even Senator Baucus has clearly indicated that he will not cross the unions on that issue. Assuming that the Senate Republicans and 2-3 moderate Democrats hold fast against a “public option” and that the CBO continues to provide unbiased analysis, it seems likely that the “public option” will fail, especially if the most robust bill leaves more than 30M people uninsured.

As such, it is very possible that comprehensive healthcare reform will fail but payment reforms will become law. Said another way, it appears to me that the providers may make real and permanent sacrifices, while other stakeholders will be minimally harmed.

Perhaps I am overly cynical, but I think it is a little too convenient that the CBO has scored the cost of the Senate HELP bill at precisely the amount of reimbursement cuts that President Obama has proposed for providers. For those who lived through BBRA 97, it will hurt twice as bad.

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the provisions of title I of draft legislation called the Affordable Health Choices Act

CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director
U.S. Congress
Washington, DC 20515
July 2, 2009

Honorable Edward M. Kennedy
Chairman Committee on Health, Education, Labor, and Pensions
United States Senate
Washington, DC 20510

Dear Mr. Chairman:
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary analysis of the provisions of title I of draft legislation called the Affordable Health Choices Act,  (labeled BAI09F54.xml)………………………….

pdf        Revised HELP Estimate from CONGRESSIONAL BUDGET OFFICE

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Discussion Draft: Current draft of the house of representatives bill

THE HOUSE TRI-COMMITTEE HEALTH REFORM DISCUSSION DRAFT SUMMARY 

The discussion draft provides quality affordable health care for all Americans and controls health care cost growth. Key provisions of the discussion draft being released today include:

•COVERAGE AND CHOICE
•AFFORDABILITY
•SHARED RESPONSIBILITY
•CONTROLLING COSTS
•PREVENTION AND WELLNESS
•WORKFORCE INVESTMENTS

pdf    An American Soution – Quality Affordable Health Care – Summary

 

pdf    Current Full Draft of the House of Representatives Healthcare Reform bill

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Congressional Budget Office – Cost Concerns Arise after Preliminary Analysis of Major Provisions Related to Health Insurance Coverage Under the Affordable Health Choices Act

pdf   Congressional Budget Office – Cost Concerns Arise after Preliminary Analysis of Major Provisions Related to Health Insurance Coverage Under the Affordable Health Choices Act

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