News outlets are reporting that 60 Senators have agreed upon an amended health care reform bill. The new bill and the CBO estimate are discussed below.
Carrie Budoff Brown and Chris Frates of Politico and David Espo and Ricardo Alonso-Zalvidar of The Huffington Post are reporting (here and here) that Senate Majority Leader Harry Reid (D-NV) has secured 60 votes in favor of an amended health care reform bill. The amended bill was introduced in the Senate this morning, and the CBO released its estimate of the effect of the bill on the federal deficit. Jeffrey Young of The Hill reports that the unvailing of the amended bill
strongly suggests that he has united his caucus of 58 Democrats and two independents behind a measure that would extend health insurance coverage to around 30 million people and make fundamental changes to the U.S. healthcare system.
Here is the 2074-page bill as introduced by Senator Reid on November 18, and here is the 383-page amendment to that bill that Reid introduced this morning.
Here are links to the 38-page CBO report on the effect of the bill on federal spending, as well as the CBO Director's summary of that report.
On page 2 of the report the CBO identifies the following changes in the bill that will have the largest budgetary impact:
The changes with the largest budgetary effects include: expanding eligibility for a small business tax credit; increasing penalties on certain uninsured people; replacing a “public plan” that would be run by the Department of Health and Human Services (HHS) with “multi-state” plans that would be offered under contract with the Office of Personnel Management (OPM); deleting provisions that would increase payment rates for physicians under Medicare; and increasing the payroll tax on higher-income individuals and families.
The amended bill also contains compromise language on funding for abortions.
In tomorrow's post I will begin to analyze the changes that have been made to the Senate bill.
Visit Professor Huhn's website on health care financing reform for links to information about proposed legislation, studies and reports, public agencies, and private organizations concerned with this issue.
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The CBO's longterm prognosis for this bill is based upon a pipe dream that is likely to become a nightmare:
"These longer-term calculations assume that the provisions are enacted and remain unchanged throughout the next two decades. However, the legislation would maintain and put into effect a number of procedures that might be difficult to sustain over a long period of time. Under current law and under the proposal, payment rates for physicians’ services in Medicare would be reduced by about 21 percent in 2010 and then decline further in subsequent years. At the same time, the legislation includes a number of provisions that would constrain payment rates for other providers of Medicare services. In particular, increases in payment rates for many providers would be held below the rate of inflation. The projected longer-term savings for the legislation also assume that the Independent Payment Advisory Board is fairly effective in reducing costs beyond the reductions that would be achieved by other aspects of the legislation.
Based on the longer-term extrapolation, CBO expects that inflation-adjusted Medicare spending per beneficiary would increase at an average annual rate of less than 2 percent during the next two decades under the legislation—about half of the roughly 4 percent annual growth rate of the past two decades. It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would be accomplished through greater efficiencies in the delivery of health care or would reduce access to care or diminish the quality of care.