Finance Committee CBO Score

by: Chris Bowers

Wed Oct 07, 2009 at 17:18


The Finance Committee cost estimate ("score") from the Congressional Budget Office has been released. Here is how it compares to the CBO estimate for the House bill:

  1. Both are rated as deficit neutral for the first ten years.

  2. The House bill will "leave about 17 million nonelderly residents uninsured," while the Finance Committee will leave "about 25 million nonelderly residents uninsured."

  3. The House bill is estimated to cost $104 billion per year, while the Finance Committee bill is estimate to cost $83 billion per year.
Since neither bill increases the deficit, the basic choice is to give eight million more people health coverage, or spend $21 billion less per year on health care.

Eight million people represent 3% of the national population under the age of 65, while $21 billion represents about 3% of the non-military, discretionary federal budget.

Which bill you prefer says a lot about your values in general. Do you prefer smaller government for the sake of it, or more insured people?

Update: It is worth noting that about 25% of the funding for the Baucus bill is paid for by taxing high cost plans. Such a funding mechanism is DOA, given that 150 House Democrats came out in opposition to it today. So, they are going to need to find another $200 billion for this thing to actually be deficit neutral.

Chris Bowers :: Finance Committee CBO Score

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Finance Committee CBO Score | 43 comments
"Cost" (4.00 / 1)
Correct me if I'm wrong, but I'm fairly certain that the "cost" includes everyone that chooses to buy into the Public Option.  If the option is chosen by twice as many people the "cost" of the option doubles.  Obviously, this has nothing to do with any reality that matters.
Yeah, which is why both are deficit neutral (4.00 / 1)
the choice is whether you like smaller government for the sake of it, or more insured people. It is a simple choice.
[ Parent ]
This is false (0.00 / 0)
There is something called economies of scale. Costs will not double simply because you have double the amount of people in the program.  

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[ Parent ]
Wrong "Cost" (0.00 / 0)
I'm not talking about how much the program costs the government.  I mean if someone pays $10,000 for a year of insurance using the public option, that counts as $10,000 more to the "cost" of the program.

Sure, economies of scale can help improve the efficiencies, but that is only at the margins.

[ Parent ]
Doesn't work that way (0.00 / 0)
If premium is paid by the person(s) insured, the costs to the government would be calculated this way. Payments into the system (i.e. premiums) are revenue. Insurance administration costs plus the amount paid out in claims are expenses. If the revenue (premium) exceeds the expenses, the government would experience a gain on the policy (i.e. profit). If the expenses exceed the revenue, that would be the cost to the government.

[ Parent ]
Exactly logical (4.00 / 1)
You understand exactly what the cost should mean.  Unfortunately, the CBO doesn't calculate it that way.  To the CBO, the "cost" doesn't take into account how it is paid for, they treat both taxes and premiums as income exactly the same way.  Yes, it really is that stupid.  That stupidity was the point of bringing this up.
[ Parent ]
is the savings in the SFC bill still based on the tax on (0.00 / 0)
"cadillac" insurance policies?  That was one of Rockefeller's big complaints about the bill, but in the whole markup debate, I didn't keep track of whether any changes were made to it.
nevermind (4.00 / 1)
wonkroom has the details

http://wonkroom.thinkprogress....

[ Parent ]
So how'd HR676 do? (4.00 / 3)
Just out of curiousity.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
CBO hasn't addressed HR 676 (0.00 / 0)
In the past, CBO and GAO rated other single payer plans:
http://www.pnhp.org/facts/sing...
[ Parent ]
Gosh, why not? (0.00 / 0)
This one's from 1993, but a nice way to frame things:

The net cost of achieving universal insurance coverage under this single payer system would be negative.


I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
[ Parent ]
and can help us make our argument (4.00 / 2)
now say 80% of health-care costs goes to actual health-care

we can ask: what do you do with 20% that remains mr./mrs. X?

you can put it into big-health's pocket just because
or
use it to provide health-care to everyone and have something left (jobs program?)

what do say sir/madam?

[ Parent ]
Because the insurance industry would lose some of their profits (4.00 / 2)
and politicians would lose their campaign contributions.

People would get affordable health care but we have priorities in the country.

[ Parent ]
A question: would a national opt-in PO (0.00 / 0)
with collective negotiating power could be able to hold down costs? I don't know, but it seems that an opt-in would draw in all of the Blue states,and have significant bargaining power.

Not to mention political power - imagine how much fun it would be to beat the hell out of Tim Pawlenty for not joining the PO. If it can't drive down costs, then it's a no-go, but I wonder if it could work.

Making states opt out of a public option (0.00 / 0)
would be better both from the stand point of creating a larger pool and making the conservative actually take a stand against refusing to participate in a program that the majority of the country would have.
[ Parent ]
It Should Be An Easy Choice (4.00 / 1)
Since when did money become more important than saving lives?

I am totally in favor of health care reform.
I am diametrically opposed to health insurance reform.
Ask Michael Moore (0.00 / 0)
Gods have always demanded human sacrifice to keep them pleased, why should $* be any different?

* "$" : the deity formerly known as "God".

"It sounds wrong...
     ...but its right."

[ Parent ]
So what's the point of The Baucus Caucus Bill? (0.00 / 0)
Really, what is it? It won't get 60 votes. It doesn't save money. It doesn't get people covered. It punishes workers that negotiated good health benefits.

Oh yeah, and did I mention it won't get 60 votes?

It's just a lame@ss bailout for the HMOs, and hope this is the final nail in its coffin.

Yes, Virginia, there are progressives in Nevada.

Yes, that is the point (0.00 / 0)
It's a lame@ss bailout of the insurance companies that guarantees them a market. Then again, so is HR3200.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
[ Parent ]
meh (0.00 / 0)
According to everyone (except the unions, I guess), ending the tax exemption for health insurance is one of the very best ways to end market distortions and prevent costs from exploding in the long term, and even a gradual version of that a la Baucus would do a lot of good. Give people subsidies so they can afford the insurance they need, but also don't give them special tax breaks specifically on health insurance (which we do right now) which incentivizes them to spend their money on more and more health insurance rather than on other things.

I hope they can work out some kind of deal where House progressives drop their opposition to the excise tax in exchange for Senate conservatives dropping their opposition to a robust public option. That would be pretty rad. (As opposed to vice versa, which wouldn't be.)

Throw rocks at me?

Sure, add that to the compromise where we get Medicare+5 (0.00 / 0)
in exchange for making the medicare reimbursement rates more balanced geographically (say, halfway between flat even and what they are now).
[ Parent ]
The excise tax does not save costs... (4.00 / 2)
...only shifts them to the sick.  Sure, it will only make less affordable plans available, but those plans will cover less and less, forcing the sick to pay more out of pocket.  The idea is that if people pay more out of pocket, they will look for better deals.  But, those who are sick do not have that luxury.  They need treatment regardless of how much it costs, which is a significant part of the reason why health care costs are so high.  It's a captive market, but that seems to be ignored by the excise tax proponents.

Any costs "saved" by an excise tax will only be passed to the consumer when such services are needed.  Hospitals don't do discounts for deductables.

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SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

[ Parent ]
Other differences in BaucusCare vs House (4.00 / 1)
and Senate HELP bill.

In the bills that passed three House committees and the Senate Health, Education, Labor, and Pensions (HELP) Committee, the exchange would be a "prudent purchaser." In other words, it would have a staff that bargained with insurers to bring down premiums--and that made sure all plans lived up to strict guidelines for coverage and customer service. In effect, any insurer that wants to offer coverage through the exchanges has to get the equivalent of a "Good Housekeeping Seal of Approval" from the administrators. This is precisely how it works in Massachusetts.

By contrast, theSenate Finance bill envisions much weaker exchanges. Instead of choosing which plans to make available, the exchange administrators would, by law, have to accept any plan that meets a relatively minimal set of standards.
http://economistsview.typepad....


Needs a "vanilla product" (0.00 / 0)
See here.

The insurance companies will create complexity and obfuscation (sorry, "innovation") faster than the regulators can react.

If the national plan has a vanilla product, that goes away.

Of course, the Dems already deep-sixed the same idea on behalf of the banksters, so no doubt that won't even be on the table.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

[ Parent ]
Can businesses buy their employees' health care through the exchange in any of these plans? (0.00 / 0)
I think that is important.
Only very small businesses (0.00 / 0)
Depending on the bill (5 bills), IIRC the range of employers eligible to participate in the exchange are 10 - 50 employees.
[ Parent ]
Why does it have to be deficit neutral? (4.00 / 1)
It's not as if we won't be running trillion plus deficits for as far as we can see.

Either we're doing this because of the ethics of taking care of people, or we aren't.

So we can pay for all the wars (n/t) (4.00 / 5)


Politics is the art of the possible, but that means you have to think about changing what is possible, not that you have to accept it in perpetuity.
[ Parent ]
Er, "we aren't." (4.00 / 1)
Why did you think we were? I mean, this is the Democratic Party we're talking about, here.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
[ Parent ]
Because otherwise (4.00 / 3)
it would require 60 votes to pass as per a point of order from the Budget Act, regardless of a filibuster.


[ Parent ]
"progressive" "values" (0.00 / 0)
Chris writes:

Which bill you prefer says a lot about your values in general. Do you prefer smaller government for the sake of it, or more insured people?

Not only does Chris compare apples and oranges, the oranges are aren't even oranges.

First, "smaller government" is just barely a value; it's certainly a catchphase that represents a conservative ideological stance. But "more insured people" isn't a value at all; it's just a quantity! The only real value -- unless you've somehow allowed yourself to identify with insurance company CEOs, a not-unknown condition among Democrats -- is health care. One of the great obfuscations in the health care debate, which "progressives" have reinforced, is that health insurance and health care are the same, when in fact insurance companies profit from the denial care, and as every country with a single payer system knows, it's entirely possible to deliver health care without any insurance companies whatever.

If you want examples of actual values, they might look like:

1. Health care is a human right.

2. Health care for profit is wrong.

And so on. The impoverished "values" that Bowers cites are really just Versailles talking points, counters in a political game.  And the values on one "side" of the debate are just as sick as on the other "side." Of course, as a single payer advocate, I'm on the side that both other sides are trying to suppress. Thanks, "progressives"!

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

I agree. (0.00 / 0)
The strategy to pass is necessary because the health care legislation so far has been a POS.



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[ Parent ]
Could you explain why you comment on this site? (0.00 / 0)
I gather from reading this that you have little other than contempt for the people that run Open Left.  Okay, then why are you commenting here?
[ Parent ]
Why preach to the choir? (0.00 / 0)
A Blogosphere of Rivals.


"It sounds wrong...
     ...but its right."
[ Parent ]
Oh dear, another Hope Enforcer (0.00 / 0)
1. Of course, since there's no analytical response to the points made, I can only think that one is not possible. Whether your content-free descent to the personal is worthy of contempt, I leave to others wiser than myself.

2. Obviously, I write for the readers of the site, not the people who run it.

3. What part of "Open" "Left" do you not understand?

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

[ Parent ]
Seemingly idiotic funding mechanism... (0.00 / 0)
Instead of doing something simple to pay the subsidies, like raising the top marginal income tax rate, they're establishing fees on insurance companies, medical device manufacturers and pharma. Of course, those costs will get passed directly on to... The people buying insurance with those fancy new subsidies.

That's not robbing Peter to pay Paul. It's robbing Peter to pay Peter. Exactly how does pushing money around in a big circle lower the cost of anything? Why create such a ridiculous Rube Goldberg machine just to maintain the vanity of a private insurance system?

Conduct your own interview of Sarah Palin!

Taxing the rich (0.00 / 0)
has become unAmerican. Not only that it would be class warfare and not in the least bipartisan. :-)
[ Parent ]
Exactly (4.00 / 1)
I know it sounds like a good and fine idea to tax the insurance companies, and pharma, etc. but it really ends up being a regressive tax. Somebody who makes $500,000 does not pay 10 times for insurance than somebody who makes $50,000. So if everybody's insurance goes up proportionally, it's going to cost lower income people a bigger percentage of their income. As sad as it is, it'd actually be less regressive to levy a flat tax to pay for it.

It's a shell game, and it's bullshit that its the Democrats that are pushing this scheme.

Conduct your own interview of Sarah Palin!

[ Parent ]
unpopular too (4.00 / 2)
I also think the House has probably found the path of least resistance in terms of marshaling public support for financing health care. In June, the Kaiser Health Tracking Poll asked Americans about seven different mechanisms to pay for health care. The one solution that Kaiser missed was that of a national sales tax, so for that I use data from Rasmussen Reports instead, who ran a May poll indicating that 40 percent of Americans would support a national sales tax if it paid for health insurance. Increasing taxes on incomes of $250,000+ was supported by 68 percent of Americans in the Kaiser poll, tying it with increased cigarette and booze taxes for the most popular option:

http://www.fivethirtyeight.com...
[ Parent ]
How about asking folks if they approve of... (0.00 / 0)
...a one-quarter of one percent tax on stock transactions -- as in HR 676? Any guess as to the approval rating on that one?
[ Parent ]
Tax on bundled poltical contributions? (0.00 / 0)
Or a national lobbyist registry complete with licensing fees?

Make politicians report corporate-sponsored travel as income?  

"It sounds wrong...
     ...but its right."

[ Parent ]
How did BaucusCare realize a $83B reduction in the deficit? (4.00 / 1)
Baucus Bill Automatically Cuts Exchange Subsidies to Avoid Early Year Deficits

The automatic cuts would kick in in any year in which the White House Office of Management and Budget determined that the bill would produce a net budget deficit. In analyzing this automatic provision, the CBO forecasts that budget deficits could result in years 2015 through 2018, requiring average subsidy cuts of about 15 percent. If deficits were worse then projected, the reductions in subsidies would be even higher.
http://seminal.firedoglake.com...

Other cute little cost saves include not starting the exchanges and related subsidies until July 2013 and not expanding Medicaid until 2014.

wow, what a dumbass! (0.00 / 0)
Other cute little cost saves include not starting the exchanges and related subsidies until July 2013 and not expanding Medicaid until 2014.

I'm sure the same applies for the individual mandate, yes?

[ Parent ]
Finance Committee CBO Score | 43 comments
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