The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

CBO Bolsters Baucus Health Care Reform Plan

Posted by Alan on September 17, 2009

The Congressional Budget Office has given a boost to the Chairman’s Mark of America’s Healthy Future Act 0f 2009. In a preliminary analysis of  the health care reform proposal put forward by Senator Max Baucus, the chair of the Senate Finance Committee. the CBO estimates the plan would reduce federal budget deficits by $49 billion between 2010-and-2019.

The Congressional Budget Office is highly regarded by both parties for its independent analysis. Their findings can cripple a bill or enhance its stature. In this case, even though the report is preliminary, the CBO adds substantial credence to Senator Baucus’ reform effort. A good thing considering the attacks on the proposal from both wings of the political spectrum.

The CBO presented its findings in a letter to Senator Baucus on September 16, 2009. (The analysis is summarized on the blog of CBO director Douglas Elmendorf). In addition to the positive effect on the federal deficit the analysis projects the health care reform legislation would increase federal revenues by $139 billion over the 10 year period. To be sure, the CBO, working with the staff of the Joint Committee on Taxation notes these estimates “are all subject to substantial uncertainty.” Further, the analysis was based on a description of the Chairman’s Mark of the America’s Healthy Future Act provided by Senate Finance Committee staff, not the document itself let alone actual legislative language.

What the CBO reports is that Senator Baucus’ health care reform bill would reduce the number of uninsured Americans by 29 million by 2019 according to the analysis. This would increase the percentage of Americans legally in the country and under the age of 65 to approximately 94 percent in 10 years from its current level of roughly 83 percent. This would leave “25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants).”

Where these newly insured consumers obtain coverage is kind of interesting. As you read these numbers, keep in mind that the size of the individual health insurance market nationally is estimated to be approximately 18 million people. The CBO estimates roughly “25 million people would purchase coverage through the new insurance exchanges, and there would be roughly 11 million more enrollees in Medicaid than is projected under current law.”  These numbers are significant. They will change the dynamics of the market, but they hardly represent a government takeover, especially considering that the Senate Finance Committee proposal does not create a government-run health plan.

The health care reform plan put forward by Senator Baucus has been subjected a great deal of criticism by Democrats and Republicans, but the attacks by liberals have been especially vicious. Which means the real debate has begun. During August it was conservatives dominating the attack on Congressional health care reform proposals. Now liberals are joining the rant party. Here’s another example from Countdown with Keith Olbermann who, like the Glenn Becks on the right, seems unable to disagree with someone on public policy without calling them names or attributing venal motives to anyone on the other side. It’s politics by outrage that demeans the debate, but pleases the partisans.

Are there flaws in Senator Baucus’ health care reform plan? Yes. Hopefully the debate starting next week in Senate Finance will fix many of them. Is his plan better than the status quo?It certainly would be for the 29 million Americans gaining coverage under the proposal. Reducing the deficit seems like a step in the right direction. And, as I’ve noted before, to the dismay of Mr. Olbermann, health care reform will be decided by moderates. And moderates aren’t attacking the America’s Healthy Future Act.


6 Responses to “CBO Bolsters Baucus Health Care Reform Plan”

  1. Why are we destroying a health system that 85% of the people like alot for 15% of the market? Why can’t they simply provide a system to help the fifteen percent? The answer is simple. This really is not about helping anyone. This is strictly about taking over. And under that pretense, the health care proposed by anyone in Washington is a bad thing for the United States of America. It will cost more, provide worst services, limit choice, be worse for seniors, at a much high cost (yes, worth saying twice), and drive down innovation in the health care field.

  2. Nosedoc said

    I am curious to know which health insurance plans will be taxed. As we all know, there really isn’t such a thing as a “Cadillac Plan,” perhaps with the exception of the lifetime coverage members of Congress receive. The cynic in me says that any plan with decent out-of network coverage will be subject to taxation.

    • JimK said

      I don’t know if this answers your question but it’s an excerpt from the Baucus Proposal. Also members of Congress receive the same health benefits as all other Federal Employees.

      “Chairman’s Mark
      The Chairman‘s Mark imposes an excise tax on insurers if the aggregate value of employer-sponsored health coverage for an employee exceeds a threshold amount. The tax is equal to 35 percent of the aggregate value that exceeds a threshold amount. The threshold amount is $8,000 for individual coverage and $21,000 for family coverage for 2013. The threshold amounts are indexed to the Consumer Price Index for Urban Consumers (CPI-U) as determined by the Department of Labor beginning in 2014. The excise tax is imposed pro rata on the issuers of the insurance. In the case of a self-insured group health plan, a Health FSA, an HRA, the excise tax is paid by the plan administrator. Where the employer acts as plan administrator to a self-insured group health plan, a Health FSA, or an HRA and with respect to employer contributions to an HSA, the excise tax is paid by the employer.
      In determining the amount by which the value of employer sponsored health insurance coverage exceeds the threshold amount, the aggregate value of all employer-sponsored health insurance coverage is taken into account, including coverage in the form of reimbursements under a Health FSA or an HRA, employer contributions to an HSA, and coverage for dental, vision, and other supplementary health insurance coverage.”

      • Underwriterguy said

        Nothing in the mark seems to correct for locale. The same plan will cost more in a high cost area (NYC) than a low cost area (say, West Cupcake, IA). Can’t wait to see what happens when FEHBP incurs an excise tax

  3. JimK said

    I watched the “Countdown” clip and am somewhat perplexed. My understanding of the Bill was that individuals or families who earned up to 300% of the Federal Poverty Level would be entitled to tax credits up to 13% of their gross income. Did I miss the section where the Bill mandates a 13% premium?
    The other item I must have misunderstood was the section on out-of-pocket expenses. Mr. Olbermann stated that the total out-of pocket expenses could be as high as 11K; it is my understanding that under the Baucus Bill the total out-of-pocket expenses would amount to about 6K(1/2 HSA Maximum). Did I get that one wrong too?

Sorry, the comment form is closed at this time.

%d bloggers like this: