The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

CBO Analysis Highlights Difficulty of Affordable Universal Coverage

Posted by Alan on June 15, 2009

Among the duties of the Congressional Budget Office is determining the financial impact of legislation proposed by lawmakers. Their highly credible analyses is given great credence within Congress. Which means today’s preliminary report on the health care reform package crafted by Senator Edward Kennedy and other members of the Senate Health, Education, Labor and Pensions Committee is especially important.

The CBO Preliminary Analysis of the Affordable Health Choices Act, released on Monday, underscores the challenge Congress faces in attempting to insure the uninsured without breaking the federal budget. Before discussing the finding, it is important to note: this is a preliminary analysis of draft legislation. The CBO analysis focused on “major provisions on health insurance coverage,” leaving several important elements out of their review. There are elements of the draft bill that have not yet been modeled, for example, allowing children through age 26 to be considered dependents on their parents’ policies. There are a host of other caveats involved. So it is best to treat the findings of this report as broad and directional.

Considering the sincere commitment Senator Kennedy and his allies have for universal coverage, the direction of the Congressional Budget Office’s conclusions must be disappointing.

Without intervention, the CBO estimates that by 2019 approximately 228 Americans under the age of 65 will have health care coverage, but from 50-to-54 million people — about 19 percent of this population — will not. If the HELP Committee’s health care reform package were enacted, the CBO estimates the percentage of uninsured would fall to 13 percent of the non-elderly population would still be without coverage — approximately 36 or 37 million.

The net increase to the federal budget for covering these 13-to-18 million Americans would be $1.o trillion between 2010 and 2019, most resulting from the subsidies the legislation would offer to individuals earning up to 500 percent of the federal poverty level purchasing coverage through a government-run Exchange.

In the CBO Director’s blog posting on the analysis, Director Douglas Elmendorf points out that while the study estimates that 39 million Americans would obtain coverage through the Exchange, “the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent).” He pegs the net decrease in the nation’s uninsured at about 16-to-17 million people.

No one claims comprehensive health care reform will be easy. The Affordable Health Choices Act is only one reform package on the table. And, as reports, the White House made clear it is not the Obama Administration’s plan.  The CBO preliminary analysis on the draft legislation developed by the Senate HELP Committee makes clear just how difficult — and expensive — it will be.  Will the CBO report convince lawmakers to scale back their ambitions for government’s involvement in America’s health care. Perhaps, but I wouldn’t count on it. Health care reform is as much about ideology as pragmatism. 

The CBO study should embolden Congressional moderates, however, to stand firm for comprehensive reform that neither breaks the budget of the federal government nor American families.


4 Responses to “CBO Analysis Highlights Difficulty of Affordable Universal Coverage”

  1. Show me the Money said

    If a politician walked in a room and asked who is for affordable health care all would raise their hand. The same would be true for affordable homes and affordable automobiles. The real challenge is how to pay for it and there has been little substantive details on this.

    My fear is we will have an abomination (read as – Obama Nation) of a health plan with many unfulfilled promises and much higher costs with fewer choices.

    Stay tuned.

  2. KenK said

    What a surprise, the ultimate cost of trying to provide coverage for the uninsured in America projects to not just be astronomical, but also falls well short of its goal of having everyone covered. The cost projections obviously assumed that per capita utilization of health care goods and services would remain unchanged. Obviously this needs to change. Well thought out ways to eliminate unnecessary utilization, whether out of greed or defensive medicine, need to be put into effect before the health system can be expanded.

  3. I agree that insurance companies should not be able to cherry pick, but if you create a health insurance exchange – then the agent and agencies will be driven out of the market. Perhaps that is what the carriers and the govt want. I guess our tax revenue is no longer needed to fund their programs.

  4. James S. Thornton said

    I would argue that for the self-employed with any medical history whatsoever, including a childhood history of ear aches, the current system is already breaking the budget of American families.

    For a glimpse into the suffering the current system can cause, for one former member of the middle class, I invite you to check out the following: 13 Ways of Looking at Catastrophe (apologies to Wallace Stevens).

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