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CBO Looks Anew at the Now Likely to Pass Senate Bill

By December 21, 2009December 27th, 2009Commentary

CBO’s analysis of various reform bills is getting redundant and so are our posts on the subject. The CBO issued a letter yesterday in response to the current version of the Senate bill, which apparently is the one upon which Senator Reid intends to have a vote next week.  (CBO Letter) There is nothing dramatically different in this analysis.  It will result, depending on your perspective, in either a significant expansion of coverage or leave a disappointingly high number of Americans still uninsured, most by choice.  It will reduce the federal deficit slightly over a ten year period, primarily because taxes and other revenue is collected for several years before the coverage subsidies start.  The deficit reduction on an annual basis is a fraction of one percent of the multi-trillion dollar deficits currently projected.  Other than a few demonstrations, it does nothing to address fundamental issues about how health care is delivered and paid for.

CBO has been studiously careful to avoid opining on the effects of reform bills on national health expenditures or premiums, but as we reported last week, the CMS Office of the Actuary has fairly conclusively demonstrated that national health expenditures will rise more than currently projected and premiums will also increase at a rapid pace.  What CBO has noted, without calling it such, is the fraudulent nature of this bill in that it relies on provider payment cuts which everyone knows will either not occur or will be reversed in future years.  The most obvious of these is the 21 per cent cut in physician payments scheduled for next year.  Eliminating that cut, which everyone expects to happen, makes this “reform” add over $120 billion dollars to the federal deficit in the next ten years.

There are serious health care issues in this country, starting with cost and access and moving on to inconsistent quality and delivery of inappropriate care.  It is hard to find any objective health policy expert who believes this bill really addresses those issues in a meaningful manner.   The future course of reform remains uncertain–it will be difficult to reconcile the House and Senate versions and the continued travails of our economy may weaken the stomach of Congresspeople who soon face reelection efforts.  Neither bill currently on the table is worth of adjective “reform”.

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