Politics & Government

How much will health bill cost? Depends on what language it's in

Thousands rallied outside the Capitol to show their support for revamping the nation's health care system, June 25, 2009, in Washington, D.C.
Thousands rallied outside the Capitol to show their support for revamping the nation's health care system, June 25, 2009, in Washington, D.C. Andrew Councill / MCT

WASHINGTON — Senate Democrats are trumpeting their claim that the Senate Finance Committee's emerging bill to overhaul health care appears to reduce federal deficits over the next 10 years — but that projection is uncertain at best.

It came from the nonpartisan Congressional Budget Office, the official legislative scorekeeper, but with enough qualifiers to raise lots of doubts.

"Those estimates are all subject to substantial uncertainty," CBO Director Douglas Elmendorf wrote in his analysis of the original Senate Finance Committee proposal.

Any estimate of any legislation's cost over time is subject to the usual variables — changes in consumer behavior, economic conditions, and new laws — but this time, there's another: The committee, which began debating and revising the plan this week, is working off a conceptual framework, not an actual bill.

Even when the panel takes a final vote, probably next week, there likely will be no legislative language — making it much harder for CBO to deliver a realistic cost estimate.

Most congressional committees work from drafts of actual bills. Not the Finance Committee, where senators say the legal minutiae of complex tax and health care legislation is often too difficult to understand.

"I'm not a lawyer," said Sen. Kent Conrad, D-N.D. "A key reason this committee writes its bills in plain English is so that members can understand it and so the public can understand it."

The lack of legal language, however, adds another layer of uncertainty to an already murky process.

"Review of that language could have a significant effect on the analysis," Elmendorf said.

The cost issue is crucial. President Barack Obama promised Congress and the nation that his plan wouldn't add "one dime to our deficits — either now or in the future." The government is already projected to run up $9 trillion in deficits over the next decade, according to current administration estimates.

Any CBO finding that health care overhaul legislation would boost that total probably would doom the effort. The leading version pending before the House of Representatives would add $239 billion to the deficit over 10 years, the CBO estimates. That's one big reason why the Senate is looking at other approaches.

The Senate Finance Committee proposal would require nearly all Americans to buy health insurance or pay a penalty. It doesn't include the government-run alternative to private coverage, or public option, that Obama and House Democrats prefer. Instead, it would create co-ops, or nonprofit companies run by members, to compete with private health insurers.

The CBO estimated that the original draft proposal from Senate Finance Committee Chairman Max Baucus, D-Mont., would cost $774 billion over 10 years, and Baucus estimates that changes to it so far have added another $28 billion.

To help pay for his bill, he'd impose a 40 percent excise tax on costlier insurance policies and squeeze hundreds of billions of dollars in savings from Medicare over 10 years.

The cost estimates do have some value, said Joshua Gordon, policy director at the Concord Coalition, a budget watchdog group, because they help explain fiscal trends that are likely under the legislation. However, he added, such analyses "are a very imprecise thing, and even more so because we're dealing with long term health care costs."

CBO and independent budget experts warn that any long-term cost projections for this legislation are subject to a wide range of variables. Among them:

  • Participation. While the CBO estimated that the number of uninsured Americans would be reduced by 29 million people, leaving 25 million without coverage, there's no way to know what people would do. Elmendorf warned that "a wide range of changes could occur, in people's health, in the sources and the extent of their insurance coverage and in the delivery of medical care."
  • Political memories. Lawmakers remember the controversy over the price of the new Medicare prescription drug program six years ago. The Bush administration was skewered after it was revealed that it deliberately underestimated the program's cost as Congress considered the legislation. Some Republicans at the time had insisted that they wouldn't support any measure costing more than $400 billion over 10 years, so the administration said it wouldn't cost that much.
  • Later, Medicare officials admitted that they'd hidden their initial 10-year estimate of $551 billion.

    • Overhead. "We have not taken into account all the proposal's effects on spending for other federal programs," Elmendorf said, "or estimated the federal government's administrative costs for oversight and implementation . . ."
    • Economics. Will inflation remain stable? Will another recession send more people into Medicaid, the government's health program for the poor? Will rising unemployment push more people under the poverty level, so they wouldn't have to buy coverage or pay a penalty?
    • Then there's the biggest variable of all: What will the final legislation say when it's put into legal language? Democrats insist that any changes won't be so radical that the CBO's preliminary analyses will be upended.

      Others aren't so confident.

      "Legislative specifications matter to the Congressional Budget Office," said Sen. Olympia Snowe, R-Maine, a moderate whose vote Democrats are trying hard to get. "So if it matters to the Congressional Budget Office, it should matter to us."

      Baucus, though, is eager to push ahead quickly.

      "The box we're in, we pass legislation (and) we've got to cool our heels for up to two to three weeks before we know the final (analysis)," he said. 'That's unacceptable, clearly."

      However, it's the way it probably will be. Once the committee votes, the CBO probably will have a preliminary analysis ready in about three days, but the final report won't come until about two weeks after the CBO sees legislative language.

      Sen. Jim Bunning, R-Ky., tried to insert a provision in the health bill that would require the legislative language and final CBO analysis to be available on the Internet for at least 72 hours before a final committee vote.

      He lost, but only by 12 to 11, as Sen. Blanche Lincoln D-Ark., joined Snowe in supporting him. Sen. Orrin Hatch, R-Utah, set the tone for the debate, asking "What are Democrats trying to hide here?"

      ON THE WEB

      CBO preliminary analysis of Baucus bill

      Sen. Baucus' opening statement

      Sen. Grassley's opening statement

      Congressional Budget Office analysis of House bill

      Side by side comparison of health care bills


      Baucus unveils health plan, draws fire from all sides

      Only 564 amendments offered to Baucus health care bill

      Democrats' health care split makes predictions impossible

      GOP takes aim at Pelosi in bid to block health care reform

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