Health-reform study buoys Dems as CBO predicts deficit reduction

WASHINGTON After an exhaustive analysis, the nonpartisan Congressional Budget Office is projecting that a major health-reform bill under consideration by the Senate Finance Committee would cut the federal budget deficit while extending health insurance to millions more Americans.

The total cost of the Senate proposal – aimed at overhauling the nation’s health system and broadening health coverage – would be $829 billion over the next 10 years, according to a CBO report issued yesterday. That cost includes $345 billion in additional spending for Medicaid and the Children’s Health Insurance Program, as well as federal outlays of $461 billion to help lower-income Americans buy insurance if they can’t afford it under the mandatory coverage plan advanced in the Senate and Obama health proposals.

Despite those costs, the CBO is projecting the Senate plan will cut long-term health costs. The reform bill, hammered out over the summer with the strong support of Finance Committee chairman Max Baucus, D-Mont., would lower the federal deficit by $81 billion while extending insurance benefits to another 29 million Americans, congressional budgeters predicted. The savings would come largely by slowing the projected rise in Medicare spending – in particular by shaving $117 billion in payments to privately run Medicaid Advantage plans – and by taxing high-cost insurance policies.

Democrats were jubilant. The CBO projection, they said, boosts chances that a reform bill would garner the 60-vote majority needed to pass the Senate. It would also allow President Obama to hold to his oft-repeated pledge not to add “one dime” to the federal deficit with his plan to overhaul the health system and extend health insurance to most uninsured Americans.

“Health reform should be fiscally responsible as it expands and improves coverage,” Baucus noted in a statement, “and these numbers reiterate that real reform can be just that.”The Baucus bill, dubbed the “America’s Healthy Future Act,” mirrors proposals laid out by President Barack Obama in his major address to Congress on health reform. As such, said the Montana Democrat, it would “modernize the health care system for the 21st century by reducing inefficiencies, focusing on quality and ensuring that we are getting the best bang for our health care buck.”

Despite ongoing skepticism by Republicans about the bill’s long-term costs, Baucus predicted his Senate panel would reconvene next week to vote on the measure and send it to the full Senate for consideration. The Finance Committee measure must also be reconciled with health-reform legislation proposed in the House of Representatives, and with a bill already approved by the Senate Health, Education, Labor and Pensions Committee.

According to a report from Kaiser Health News, Senate Majority Leader Harry Reid, D-Nevada, has promised to “work with the White House and the chairmen of the HELP and Finance Committees to craft a bill that can garner 60 votes.”

Given the almost unanimous hostility to the Obama health reform agenda expressed by House and Senate Republicans, that process is likely to remain an uphill battle. Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, summed up his party’s opposition yesterday, saying the Baucus proposal “includes hundreds of billions of dollars in new taxes and fees,” and “still leaves 25 million people without health insurance.”

That projection, however, includes roughly 8 million illegal immigrants, according to CBO projections. Neither the Baucus bill nor the White House has proposed insuring illegal immigrants.