CBO: New House Health Bill Tab Is $940 Billion For 10 Years

NU Online News Service, March 18, 3:12 p.m. EDT

WASHINGTON–A Congressional Budget Office study reported that the health care reform legislation the House is expected to vote on by Sunday would cost $940 billion over 10 years.

The new cost computation came today as Democrats prepared to roll out the health care "Reconciliation Act of 2010." (H.R. 4872), for posting on the House Web site.

Uninsured Americans under the new bill would be reduced by 32 million over 10 years, the CBO report said.

At the same time, President Obama announced that he will delay his trip to Asia until June so he can be around for the critical vote.

And, The Wall Street Journal reported that as of early today, House leaders were still about 10 votes short of the 216 they need to pass the legislation.

"After appearing in peril just weeks ago, Thursday's developments showed how the health overhaul has gained significant momentum in recent days," the WSJ said.

The estimated $940 billion cost of the bill over the next decade, compares with the $875 billion projected cost of the bill passed by the Senate Christmas Eve, but less than the $1.05 trillion measure the House passed in November.

Future federal deficits over 10 years would be reduced by $138 billion because the cost of the legislation would be more than offset by revenue from new taxes and fees and by reductions in government spending, CBO said.

The new bill reduces the excise tax on "Cadillac plans," to $32 billion over 10 years, compared to $150 billion in the bill passed by the Senate. It would do so by delaying implementation of the Senate's tax on high-cost insurance policies until 2018.

But it would reduce Medicare Advantage plans, the privately run Medicare policies that on average now cost the government more than traditional Medicare. The bill would reduce spending on Medicare Advantage by $132 billion over 10 years, cuts decried by America's Health Insurance Plans.

In a statement, Robert Zirkelbach, an AHIP spokesman, said "Cuts of this magnitude will put at risk the entire Medicare Advantage program that more than 10 million seniors rely on today."

As a result, he said, "Seniors in Medicare Advantage will face higher premiums, reduced benefits, and millions will lose their coverage altogether. This breaks the promise that those who like their coverage can keep it."

The bill includes an additional $19.8 billion in spending to close the gap in Medicare prescription drug coverage known as the "doughnut hole." The missing piece is the space between the initial coverage limit and the catastrophic coverage threshold.

Meanwhile, according to the CBO, the bill would yield less in the way of savings as a result of a new commission to recommend changes in Medicare spending.

Under the bill, a commission, called the Independent Payment Advisory Board, would be established to point out ways to save spending on Medicare. The CBO now projects the savings from this idea to $13.3 billion over 10 years, rather than the $28 billion in the Senate-passed bill.

Sen. Harry Reid, D-Nev., Senate majority leader, said "all Americans want access to quality, affordable health care, and the bill that the House introduced today moves us another important step closer to that reality."

Rep. Steny Hoyer, D-Md., the House majority leader, said the legislation is "the largest deficit-reduction bill that members will have a chance to vote on" in most of their congressional careers.

But, Rep. John Boehner, R-Ohio, House minority leader, said his party's legislators will "do everything that we can do to make sure this bill never, ever, ever passes."