CNSNews.com - Democrats’ $1-Trillion Health Care Plan to Cost 23 Million Americans Their Private Insurance, CBO Says

CNSNews.com - Democrats’ $1-Trillion Health Care Plan to Cost 23 Million Americans Their Private Insurance, CBO Says

(CNSNews.com) - The Congressional Budget Office (CBO) reports that a government overhaul of America’s health care system would cost at least $1 trillion and would mean the loss of private coverage for an estimated 23 million Americans, according to a preliminary analysis issued Tuesday.



Leading Democrats, however, say the CBO’s numbers do not take into consideration the savings that the plan apparently would create. They say some of the costs could be covered by taxing certain “unhealthy” foods, such as sugar.

The overhaul is based on the plan put forward by Sen. Edward Kennedy (D-Mass.) and is being promoted by Sen. Christopher Dodd (D-Conn.), given Kennedy's illness.

The Kennedy plan does not include the government-run health insurance entity sought by President Obama, nor does it contain the Democrat-favored plan to expand Medicaid coverage to everyone earning less than 150 percent of the federal poverty level. Both of those proposals – the details of which are still under negotiation – would add significantly to the cost of the bill, CBO says.

Enacting the Kennedy plan, nonetheless, “would result in a net increase in the federal budget deficits of about $1 trillion," says the CBO. "That estimate primarily reflects the subsidies that would be provided to purchase coverage through the new insurance exchanges, which would amount to nearly $1.3 trillion in that period.”

The final figure comes in at $1.042 trillion due to revenue provided by increased taxes as people moved from employer-based, tax-free coverage to other forms of insurance, penalties for being uninsured, and reduced payments to physicians under Medicaid.

“Those costs would be partly offset by receipts or savings from three sources: increases in tax revenues stemming from the decline in employment-based coverage; payments of penalties by uninsured individuals; and reductions in outlays for Medicaid and CHIP.”

The CBO also said that, if enacted, the bill would break a key promise made by Obama: that those with private health insurance would not be harmed.

“[T]he number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million,” the report says.

Despite all the missing sections, on things like government healthcare, Medicaid expansions, and employer and individual mandates, the CBO still concludes that the bill will have a major impact on the lives of Americans.

“The proposal would have significant effects on the number of people who are enrolled in health insurance plans, the sources of that coverage, and the federal budget,” stated the CBO.

Sen. Chris Dodd (D-Conn.) told reporters Tuesday that everyone would be affected by this legislation, claiming during a press conference on healthcare that any reform will touch everyone’s lives.

“This bill is [going to affect] 100 percent of the population of our country, every consumer, every provider, every business,” Dodd said.

Despite its broad impact, Dodd could not provide a final cost estimate for the bill when asked by CNSNews.com during the briefing. Dodd said no final cost was available because contentious issues like a public plan had been intentionally left out of the draft reviewed by CBO.

“We don’t know [the final cost],” Dodd said. “We intentionally left out of the draft a couple of sections where, arguably, there were contentious issues. So there are no numbers on those issues”

Dodd then complained that the CBO does not take Democrats’ plans for future cost savings into account when it calculates the cost of the bill, saying that the non-partisan office’s reluctance to take Congress at its word on savings assumptions skewed the final analysis.

“You don’t get the benefit, from CBO, of cost savings through prevention programs,” Dodd said. “They’ll tell you how much an anti-smoking bill will cost but they don’t tell you the benefit that occurs when people stop smoking -- so we’re wrestling with the CBO’s numbers.

“An actuary has to look at them in terms of what expenditures you’re making, and they’re not very good at providing you with the other side of that ledger, and that is: What are the cost savings?” Dodd said.

Senator Tom Harkin, (D-Iowa) told CNSNews.com that there was a cost ceiling for health reform. However, the senator did not give a specific number, preferring to focus on the myriad ways Congress could pay for a health restructuring.

“I suppose there is, in terms of how you pay for it,” Harkin said. “But there’s a lot of ways of paying for this that we haven’t talked about, there’s a lot of stuff out there.”

Harkin said that unhealthy “things” should bear some of the burden of a healthcare restructuring.

“Things that make it easy for you to be unhealthy ought to bear some of the burden.”

When asked by reporters if this meant taxing unhealthy behavior, Harkin said that government should tax unhealthy foods.

“No, foods,” Harkin explained. “Alcohol and tobacco and sugar and things like that.”