Cost of the Finance Committee Health Care Bill
Today the Congressional Budget released their analysis of the amended version of the America’s Healthy Future Act of 2009, the health care reform legislation put together by the Senate Finance Committee. This updated analysis reflects changes made by Committee members to the bill during two weeks of intense debate during the markup process. We have also updated our comparisons chart of the House Tri-Committee bill, the Senate HELP bill, the Senate Finance Committee bill, and the President's Reserve Fund.
Below, we have broken down the major costs and savings in this version of the bill, compared to the original Chairman's Mark (costs in billions):
|Small Business Credits||($24)||($23)|
|Physician Payment Updates||($11)||($11)|
|Other Spending Changes||($13)||($26)|
|Medicare Prescription Drug Coverage||($19)||($21)|
|Other Spending||($48)|| ($63)
|Changes in Prescription Drug Payments||$15||$28|
|Medicare Advantage Cuts||$125||$114|
|Reductions in Provider Payment Updates||$182||$185|
|Medicare Premium Increase||$34||$33|
|Medicare Payment Commission||$23||$22|
|Measures to Slow Overall Health Care Cost Growth||$5||$15|
|Measures to Reduce Federal Health Care Spending||$87||$113|
|Excise Tax on High Cost Insurance||$215||$202|
|Impose Fees on Health Care Companies||$93||$121|
|Other Tax Changes||$40||$59|
|Tax Increases||$348|| $382
|Interactions and Other Spending||$1||$58|
|Ten Year Budget Impact
|Tenth Year Surplus||$16||$12|
|Reduction in Uninsured|| 29 million
|| 29 million
Numbers in billions, with positive numbers representing a reduction in the deficit
Sources: Congressional Budget Office, Joint Committee on Taxation, Reuters, Authors' Calculations
*As reported in popular press. JCT estimates not yet available.
As the chart shows, the latest bill reduces the 10-year budget deficit by around $81 billion, compared to $49 billion in the previous version. Over the long-run, however, it is expected to be somewhat less effective at reducing the deficit -- CBO estimates deficits will likely be between 0.25 and 0.5 percent of GDP smaller in the second decade, compared to around 0.5 percent in the old Mark.
Major changes to the policies affecting these numbers include the following:
- Subsidies provided through the insurance exchanges are now larger
- Penalties for not having insurance are now smaller, and more exemptions exist
- The excise tax rate on high-cost plans is higher, but more exceptions are included, and the threshold for "high cost" is indexed at 1 percent above inflation, rather than at inflation
- Fees on various health care companies have changed, and they can no longer be deducted for purposes of corporate income taxes
- More aggressive measures are taken to slow overall health care cost growth, and cut federal health care spending
- A "failsafe" budget mechanism was put in place, to automatically reduce premiums if the legislation were projected to increase the deficit.
What has not changed is the number of nonelderly people who would be covered under this plan. CBO and JCT estimate that by 2019, the number of uninsured would be reduced by about 29 billion, leaving about 25 million uninsured.
In the coming days, we will offer further information and analysis.