CBO Reports Health Care Reform Will Save Money

The Congressional Budget Office reports the America's Health Choices Act will save the federal government. Contrary to what Republicans are saying, the cost saving will add $239 billion to the budget.

According to CBO’s and JCT’s assessment, enacting H.R. 3200 would result in a
net increase in the federal budget deficit of $239 billion over the 2010-2019 period.
That estimate reflects a projected 10-year cost of the bill’s insurance coverage
provisions of $1,042 billion, partly offset by net spending changes that CBO
estimates would save $219 billion over the same period, and by revenue provisions
that JCT estimates would increase federal revenues by about $583 billion over those
10 years.

The CBO breakdown where the cost savings will come from.

• Permanent reductions in the annual updates to Medicare’s payment rates for most services in the fee-for-service sector (other than physicians’ services), yielding budgetary savings of $196 billion over 10 years (excluding interactions—namely, the effects of those changes on payments to Medicare Advantage plans and collections of Part B premiums);

• Setting payment rates in the Medicare Advantage program based on per capita Medicare spending in the fee-for-service sector, providing savings of $156 billion (before interactions) over the 2010-2019 period; and

• Changes to the Medicare Part D program that would establish a new prescription drug rebate program for some people who are eligible for both Medicaid and Medicare, while expanding drug coverage to beneficiaries that are currently subject to a gap in coverage (often referred to as the Part D “doughnut hole”), saving $30 billion over the 2010-2019 period.

The doughnut hole was the result of President Bush's horrible Medicare overhaul. 2004 was an election year and the Bush White House pushed for changes in Medicare. The Medicare package went $400 billion over what the Bush administration projected. The White House told Richard S. Foster, the chief actuary for the Centers for Medicare and Medicaid Services, he would be terminated if he revealed the true cost.

"This whole episode which has now gone on for three weeks has been pretty nightmarish," Foster wrote in an e-mail to some of his colleagues June 26, just before the first congressional vote on the drug bill. "I'm perhaps no longer in grave danger of being fired, but there remains a strong likelihood that I will have to resign in protest of the withholding of important technical information from key policy makers for political reasons."

The problem with the $2,510 doughnut hole coverage is it costs the government money without providing coverage. Patients are left to go to private insurers or pay for prescription drug out of their pockets. The House bill is smart policy. It's is fiscally and morally responsible. Republicans continue to pitch how great the status quo is.

The House Republican released a four page health care plan. To say their plan isn't wonkish would be an understatement. The plan allows parent whom have their kids enrolled in SCHIP to get a private plan. Of course, Republicans ignore these families are on SCHIP because they are poor. Tax cuts are offered for people on private health care plans. That does nothing for people without health insurance. The meat of the Republican plan is cutting preventive care.

Tax cuts for people whom can afford health care and less health care is what the GOP is offering. Who wants to sign up?