FixHealthCarePolicy

Senate’s Health Care Reform Has Unknown Costs

The Congressional Budget Office’s (CBO) preliminary analysis of the conceptual framework (not a complete bill) for the Senate Finance Committee’s health reform has been pegged to only cost taxpayers $829 billion over the next 10 years. But as Heritage and other health policy experts point out, there are a lot of hidden costs that aren’t being reported.

In a newly released Web memo, Heritage health policy analyst Greg D’Angelo points out the latest CBO estimate of the Senate Finance Committee legislation, penned by Chairman Sen. Max Baucus (D-Mont.), is subject to change. Even with the amendments added into the legislative framework, D’Angelo quotes the CBO report that the proposal “has not been embodied in legislative language.” Therefore, lawmakers can and likely will make changes that alter the final price tag, writes D’Angelo, who also examined CBO scores for other health reform bills in Congress.

Health care economist James Capretta, with the Ethics and Public Policy Center, highlights in a new blog the CBO projection assumes Congress will follow through with Medicare and Medicaid cuts. History shows that when lawmakers made “arbitrary, across-the-board cuts, it was only a matter of months before they were scrambling to restore the cuts.” Restoring cuts in Medicare physician fees would add more than $200 billion to the plan’s bottom line, Capretta notes.

Also, Capretta mentions a so-called “firewall” within the Baucus legislation. 

“CBO’s assessment of the Baucus bill is built on the dubious assumption that Congress can hand out a lucrative new entitlement to a limited number of low- and moderate-income voters while denying it to tens of millions of others.

…All but the smallest employers would be required to offer qualifying coverage to their full-time workers to avoid hefty taxes, and the employees would have no choice but to take what is offered to avoid paying a penalty tax themselves.  The“firewall” thus prevents workers from exiting employer-based plans for the exchanges.”

The Senate Finance Committee is expected to vote Tuesday on the legislation.

Tags: CBO, health care reform, Sen. Max Baucus, Senate Finance Committee