11-19-09 The new Senate Health Care Bill unveiled yesterday
At a press conference yesterday, Senator Harry Reid unveiled the Senate’s latest health care bill, The Patient Protection and Affordable Care Act. This new bill was listed as an amendment to a House bill, H.R.3590, the Service Members Home Ownership Tax Act of 2009.
Reid had been waiting to release his bill until the Congressional Budget Office (CBO) completed its cost analysis. When the CBO finally finished, the Senate bill’s price tag came in at $848 billion over the next ten years, compared to an earlier $829 billion for the Senate Finance Committee bill, and over a trillion for the House bill.
Compared to the earlier Finance Committee bill, the extra $9 billion would expand insurance coverage to an additional 2 million people, and add 1 million to Medicaid and CHIP. The new Senate bill would expand insurance coverage to around 31 million Americans, leaving around 16 million still without insurance.
The Congressional Budget Office estimates that the Senate’s latest health care bill would reduce the budget deficit by $130 billion over the next ten years. Estimates for the Finance Committee showed that it would reduce the deficit by $81 billion, and the House bill would reduce the deficit by $109 billion.
Part of the estimated reduction in the deficit comes from the bill’s tax on “Cadillac” insurance plans. Beginning in 2013, plans with premiums of over $8,500 for individuals or $23,000 for families would be taxed at 40% of the overage. The CBO estimates that this would produce $149 billion in revenue. (This estimate assumes that the added tax would not cause people to drop or decrease their insurance coverage.)
Like the Senate Finance Committee bill, the new Senate bill would include a public option, with states being able to opt out of the plan. The CBO estimates that the public option would have slightly higher premiums than private plans, due to the fact that it is likely to attract a less healthy pool of applicants. The CBO also estimates that around one-third of states would opt out of the public option. If fewer states choose to opt out, this would increase the total cost of the bill, and reduce any reduction to the deficit.
The bill also contains Community Living Assistance Services and Supports (CLASS) provisions, which would create a voluntary government-run long-term care insurance program. The CBO estimates that, over the next ten years, this program would collect $72 billion more in premiums than it would pay out in benefits.
However, after sufficient time passes for a significant number of enrollees to require long-term care, this savings would be less. After 2029, the program would start adding to the deficit.
Finally, the Internal Revenue Service, Health and Human Services, and other federal agencies will have to have their budgets increased to cover the workload of administering the provisions in the health care bill. This money is not included in the CBO’s estimates or the bill’s price tag.
Read the full text of the bill here: http://www.opencongress.org/senate_health_care_bill .
Sources / More Information:
Congressional Budget Office Analysis
http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf
New York Times – Senate Says Health Plan Will Cover Another 31 Million
http://www.nytimes.com/2009/11/19/health/policy/19health.html?hp
