CBO Scores Confirm Deficit Neutrality of Health Insurance Reform Bill

[Cronopio]

Source: The Gavel

July 17, 2009

Washington, D.C. — The Congressional Budget Office (CBO) released estimates this evening confirming for the first time that H.R. 3200, America’s Affordable Health Choices Act, is deficit neutral over the 10-year budget window - and even produces a $6 billion surplus. CBO estimated more than $550 billion in gross Medicare and Medicaid savings. More importantly, the bill includes a comprehensive array of delivery reforms to set the stage for lowering the future growth in health care costs.

Net Medicare and Medicaid savings of $465 billion, coupled with the $583 billion revenue package reported today by the House Committee on Ways and Means, fully finance the previously estimated $1.042 trillion cost of reform, which will provide affordable health care coverage for 97% of Americans.

“This fulfills the strong commitment of the President and House leadership to enact health reform on a deficit-neutral basis,” said Chairmen Henry A. Waxman, Chairman Charles B. Rangel, and Chairman George Miller. “The reforms included in this legislation will help control health care costs and expand access to quality, affordable coverage to all Americans in fiscally-responsible manner.”

The estimates also cover important reinvestments in Medicare and Medicaid, including phasing in the closing of the “donut” hole in the Medicare drug benefit. The bill’s long-term reform of Medicare’s physician fee schedule to eliminate the potential 21 percent cut in fees, and put payments on a sustainable basis for the future, will cost about $245 billion. Those costs, however, are not included in the net calculations above, as they will be absorbed under the upcoming statutory “pay go” legislation that is pending in the House.


Read more: http://speaker.house.gov/blog/?p=1872

---

*Deficit neutral over 10 years*

A righteous smackdown on Elmendorf's testimony earlier this week, and on Sen. Nelson and the "six deadly hypocrites" http://krugman.blogs.nytimes.com/.

[downindixie]

1. Good news

[FrenchieCat]

2. Let's hope this news doesn't go unreported by omission

by those who don't follow the Cronkite brand of journalism. :(

[DailyGrind51]

27. Isn't it unfortunate that today's anchorpersons make as much as CEOs?

And, fall in the same tax bracket.

[Faygo Kid]

3. Elmendorf is a tool. He wants to torpedo the whole thing.

He needs to be outta here. This clearly rebukes that idiot.

[SharonRB]

4. Huh?

Isn't this the opposite of what the same body said just two days ago? I hope this is right -- should shoot down a lot of arguments.

[Jake Stillow]

14. I'm confused. The CBO doesn't mention any surplus

Here's Elmendorf's statement regarding the new analysis:

http://cboblog.cbo.gov/?p=332

It says the bill will produce a net 239 billion dollar increase in the deficit.

[Cronopio]

53. I found this discrepancy after I posted the OP, so I'd like to know this too.

As expected, the misinfo about this is flying hard and fast, but I hope none of it is coming from Pelosi's office.

[Budgies Revenge]

60. From what I can tell

Some are claiming that this is revenue neutral because the CBO doesn't include certain deficit reduction measures in the bill and changes that will address the shortfall of payments to Medicare physicians . Those measures, if enacted are supposed to equal $245 billion dollars in savings. Since the projected increase in the deficit from this bill ($235 billion over ten years) is below that, it could be claimed that the program would not only be neutral, but that it would have a six billion dollar surplus. Honestly, I don't know if this is true, but it's the explanation that I've heard offered.

[Cronopio]

61. Thanks for the clarification.

It doesn't seem like the CBO is making any special effort to let people know about this.

[grahamhgreen]

5. Taxing those who can afford it! Great!

I take it that this includes the tax on those earning over $350K/yr...

If they need to make up for their lost revenue, I'm sure they're smart enough to come up with a new business plan and not take it out of our health care.

[Mr. Sparkle]

6. I cant keep up with all these estimates, how can 2 estimates in the past few days say 2 different ..

things. If anybody gets this, could you explain it to the rest of us.

[GreenTea]

8. One can easily get 47 different estimates in 47 days-Its who YOU trust & believe is all that matters

To me if say, Dennis Kucinich was behind or sponsoring a survey or bill...I would certainly trust it over a survey or bill sponsored or written by Michelle Bachmann...I would read them, but I know which one I'd lean towards as the truth & factual.

[DissedByBush]

16. Hear Hear on Kucinich

Mind you I might not agree with a position that Kucinich takes, or how he applies facts to a situation, but I trust his honesty and sincerity more than any other in Congress.

[DissedByBush]

9. Estimates are based on the result you want

Right wingers say this will bankrupt us. Obama says it will save money.

The truth is somewhere in the middle.

[harmonicon]

10. what on earth makes you think that?

How did you come to discover this "truth"? Have you crunched the numbers?

[DissedByBush]

15. Have you seen our government?

There is no such thing as a neutral study or estimate. They tell us what they want to in order to influence our opinions.

Each side is going to skew the numbers towards its desired conclusion. The truth is usually in the middle in such a situation.

[DireStrike]

19. You're forgetting the Slippery Republican rule

Republicans tend to lie more and to a greater degree than Democrats. When politicians are honest, they tend to be Democratic. This skews the "true middle" to the left of the apparent middle between D and R estimates.

[DissedByBush]

24. The truth is still somewhere in that middle n/t

[lumberjack_jeff]

25. If a spectrum has truth on one end, and a lie on another...

... all points in between are lies to varying degrees.

The truth doesn't always lie somewhere in between, but that frame of mind, certainly is useful to liars.

[harmonicon]

28. +1

It doesn't get more clear than that.

[Enthusiast]

41. Well said, jeff! nt

[Cronopio]

54. I find it helps to distinguish truth and reality in resolving the truth/lie ratio.

My own definitions: Truth is the way reality would operate if it operated sanely, sustainably, and consistently. It's a principle and a goal.

Reality is just the way it is operating right now. The collective cause-and-effect engine of truth and lies. So reality is always meandering on the spectrum between truth and lies. In fact, you could say it is the spectrum.

[harmonicon]

20. Give me one example when this has been the case. ONE.

I can't think of any. The idea that Democrats and Republicans are two diametrically opposed sides of the political coin is nonsense. I highly doubt that the truth is generally in the middle between what a center-right party and a bat-shit-crazy party want you to think.

[DissedByBush]

23. Of course it is

Even using your definitions between center-right and batshit crazy is a middle ground, and no matter how big it is the truth will be somewhere in there.

Of course the parties are not diametrically opposed. They are two sides of the same coin. But they are opposed on this issue and are distributing their own estimates to sway the public to their side.

Do you believe everything your government tells you?

[harmonicon]

29. where is your example then?

Please, give me one instance where Democrats projected one set of numbers, Republicans projected another, the proposed plan for which the numbers were projected was put into place and the resultant truth was in the middle of the the Democratic and Republican predictions. Give me one example.

[DissedByBush]

49. Deficit

The stimulus of 2008. Conservatives said the deficit would go well over a trillion in 2008 and the CBO said it would add a bit over a hundred billion. Both were wrong and the number was in between the two.

Even right now the CBO is projecting deficits until 2019 and wouldn't you know it for every year the White House has a lower number. I wonder why? I don't think either of their experts are better. I believe the White House needs lower numbers to sell its programs.

[harmonicon]

50. 2008 stimulus? Under Bush?

Or do you mean things like TARP from this year? In any case, "conservatives" and the CBO are not exactly Democrats and Republicans.

It's not that I think either party is going to tell me the truth - I don't. However, I think the idea that the truth lies in the middle of these two groups is just some kind of false folk wisdom that either one of them would like you to believe. I'm afraid that, as someone else here said, the truth is often so far away from what either thinks, they'll never be close to it at all.

[DissedByBush]

56. I hope by "in the middle" you don't think directly in the middle

In the middle in what I am thinking is somewhere in between.

[Iowa]

30. Nah...

The truth is almost never "in the middle". It's way off in the corner somewhere being ignored by the media and the politicians. If you're looking for the truth, you look everywhere EXCEPT in that tiny space between the two corporate parties.

Truth.................................................................................Dems.Repukes..

See that little dot between Dems & Repukes? That's your "middle".

[Enthusiast]

40. Why would you trust anything

right wingers want you to believe? Even partially. They lie as often as they breathe, as in respiration. They exist for the sole purpose of advancing the agenda of a corporation. Are you a 'right winger'? What monetary gain do Democrats hope to gain by advancing the cause of universal coverage and not for profit healthcare?

[blondeatlast]

7. May the blogs spread the news far and wide, 'cause the MSM won't. nt

[harmonicon]

11. now if they'd only study how much single-payer would save, we could get somewhere n/t

[Jake Stillow]

12. Fix the Krugman link please

It doesn't lead to his criticism of Elmendorf.

[Cronopio]

52. I added the top-level link to Krugman's column as a reference to the term "six deadly hypocrites".

It was Krugman's term - you don't have to scroll down too far to find it. I can't fix the link now - edit time limits.

[MasonJar]

13. YEA!!!!!!!!!!!!!!! It would be interesting to find out what Elmendorf's tax free

account in Switzerland has in it!

[Jake Stillow]

17. I have a question

Let me see if I understand:

CBO says there will be a deficit, but Pelosi and others say there will be a small surplus.
The reason for this surplus conclusion is that legislation might pass soon in which Medicare costs won't have to be offset.

But will that cost simply disappear? Will it never be counted as part of our expenses?

[God like]

36. No worries

Ignore it. The numbers are all lies anyway designed to keep you hopeful!

[DallasNE]

18. How Can 2 CBO Reports Be So Different

I presume Elmendorf's testimony only looked at part of the data, which is deceptive at best.

As for Ben Nelson, three words describe him. Mutual of Omaha.

“Scoop” Jackson used to be known as the Senator from Boeing. Well, Ben Nelson is the Senator from Mutual of Omaha. Disclosure: I live 3 blocks from Mutual of Omaha headquarters.

The issue really isn’t about hypocrisy, it is about the need for public financing of federal elections. Until that happens it will be next to impossible to get the legislation that the situation calls for. Instead, it is about what it takes to get re-elected.

[JeanGrey]

21. How? How can it be done? I pay Blue Cross 1,000 a month

right now. So if BC STAYS in the picture how will my bill suddenly go away?

[Rage for Order]

22. Why would Nancy Pelosi claim this on her blog? That's not what the report says

Here's a link to the actual report referenced in the OP:

http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf

According to CBO’s (Congressional Budget Office) and JCT’s (Joint Committee on Taxation) assessment, enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period. That estimate reflects a projected 10-year cost of the bill’s insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those 10 years.

By the end of the 10-year period, in 2019, the coverage provisions would add
$202 billion to the federal deficit, CBO and JCT estimate. That increase would be
partially offset by net cost savings of $50 billion and additional revenues of
$86 billion, resulting in a net increase in the deficit of an estimated $65 billion.
It is important to note that the figures presented here do not represent a complete
cost estimate for the coverage provisions of the legislation. They reflect
specifications provided by the committee staff rather than detailed analysis of the
legislative language. They do not include certain costs that the government would
incur to administer the proposed changes and the impact of the bill’s provisions on
other federal programs. Nevertheless, the estimates reflect the major net budgetary
effects of H.R. 3200.

More at the link...

The CBO/JCT preliminary analysis has tables and charts that show more detailed information. However, one thing the report does not state is that HR 3200 will be "deficit neutral". I on't know where they pulled that language from. Someone please point me to it if you find it in the report.

[DeltaLitProf]

44. This is my concern too

The info in the letter just doesn't match the headline and news release. What in the world is going on?

[Big_Mike]

48. Excuse me, but I have learned one thing over the last few years:

Estimates are just that: estimates. Time will prove one way or another.

In February, the estimate was: No more than 8.5% unemployment and it is currently greater than 9.5% and inching towards 10%; the bill would create or save 3.5 million jobs: Yeah, right!

It doesn't seem to matter which party makes a statement, they are almost always too rosy by half. Why can't they just give us the best information possible and forget the m*****f****** spin???

I'll take the bad news straight up, TYVM. But don't paint a pretty picture only to have it turn to slime, like the jobs outlook right now.

[Wednesdays]

26. K&R

:kick:

[Beartracks]

31. What does "coverage" mean?

>> "which will provide affordable health care coverage for 97% of Americans"

I haven't kept up with all the details of the current reform bill(s) moving through Congress. When they say that 97% of Americans will be covered, is that the same as saying my current private insurance "covers" my health care (i.e. not all procedures, limits on others, 80/20 splits on the "allowable" amounts, etc.)?

[Amos Moses]

38. That's a good question.

I imagine we'll get to the answer to that long after all the decisions have been made.

[ProudDad]

58. It don't mean SHIT

I read that part of the bill.

4 tiers of "insurance" depending on what you can "afford".

Nothing guaranteed except if your employer has private insurance neither they nor you can get into any public plan...

Etc. etc. etc.

Total cobbled together bullshit...

HR676 - Universal Health Care for All -- but that's off the table, except in the entire fucking civilized world!!!

[backscatter712]

32. Very good news! Time to beat the Blue Cross Dems over the head with it!

BTW, the discrepancy between the surplus declaration in Pelosi's announcement and the purported $239B deficit in the report itself are explained by Congress's annual ugly patch of the flawed sustainable-growth-rate calculations used to determine how much doctors are paid by Medicare (the calculations always generate rates which are way too low, and if Congress doesn't do their annual fix to shore up rates, physicians would abandon Medicare in droves.) Without the ugly patch, we actually get a 6 billion dollar surplus from HR3200, but because the ugly patch is factored in, the CBO calls it a $239B deficit. The thing is that the ugly patch would be implemented by Congress every year, whether or not HR3200 becomes law, meaning that money would be spent no matter what.

So yes, the CBO report shows that HR3200 is indeed deficit neutral!

Clear as mud? Gotta love .gov budgetary analysis...

[wiley]

33. Each of you has to pass this info on, everywhere. There is no "NO"

[Faryn Balyncd]

34. K&R. But, with the "Public Option" REQUIRED to be self-sustaining, WHY EXCLUDE the Middle Class?

The public plan was sold as an option available for ALL Americans.....


It is REQUIRED BY LAW to be self-sustaining. Thus, it CANNOT be a burden to the taxpayers.


So why are millions of struggling middle class Americans (those who have incomes over 4xFPL - -that is, over $44K for individuals, $58K for a couple, $88K for family of 4) EXCLUDED from the public option?


Why are these Americans MANDATED to purchase private insurance, while physician acceptance of the public insurance plan is VOLUNTARY?


Why should lower income Americans be segregated into a lower-income-only public plan which will have limited, possibly inferior, physician/provider participation?


Was not the public option promoted as a plan in which ALL Americans could opt in to a plan such as that available to Congress, or perhaps "Medicare-for-All"?


H. R. 3200, as it is written, hijacks the Public Option. H. R. 3200 creates a Public Option for lower-income and some moderate-income Americans only, with LIMITED participation by providers. These Americans will be paying their hard-earned thousands for this self-sustaining plan, yet they will receive a second-tier product. These lower, and some moderate, income Americans deserve more for their money.


And H. R. 3200 excludes millions of the Middle Class from the public option, for no other reason than to sanction, and mandate, their continual rape by the insurance corporations.


It is great that the CBO has determined that the plan will be deficit neutral.


But H. R. 3200 needs to be modified to allow for what was promised: that the (self-sustaining) Public Option be indeed an option for ALL Americans, and not a second-tier, lower-income only plan in which many, if not most, providers will not participate.






(Thanks for posting the good news. K&R)

[Political Heretic]

43. I still think you're reading that wrong.

The subsidy is for 400% of poverty and lower.... if you make 401% above poverty you can't get the government to subsidize health care. But by my reading of the bill, a public option is an option for everyone.

[ProudDad]

59. Exactly

the "public option" is just another Aetna or Cigna that isn't ALLOWED to be efficient or Universal!

[God like]

35. You can trust the CBO

Yes, you can trust the CBO. This gubermint agency is always accurate and honest. Really! You are getting sleepy. Verrry sleepy!

[senseandsensibility]

39. I'm wide awake

Thanks. You joined just to say that? Please tell me what corporate source you prefer, and why.

[harun]

37. Does anyone even care if it is deficit neutral or is this just a way for them

to throw in all the pro-corporate crap?

[Political Heretic]

42. What the fuck is the CBO head doing saying just the opposite like one day ago?

[Jake Stillow]

46. The CBO did not say the opposite

Pelosi and other Democrats are the ones who said there's a surplus.
This is what the CBO director says: http://cboblog.cbo.gov/?p=332

[Political Heretic]

47. The director DID say the opposite. I watched him say the opposite of this new CBO report.

[Vinca]

45. Yesterday, right after I read this, I watched the evening news

and they, of course, ran a story about the Elmendorf testimony and the slant of the story was "we can't afford health care." How can the same organization come up with 2 polar opposite conclusions?

[thesquanderer]

51. conflicting reports?

Yes... there is some confusion here... Meet The Press asked questions of Sibelius based on a health care plan that was, as it stands, not capable of paying for itself, and Sibelius accepted the premise, she did not come back with saying that it was revenue neutral. So something seems amiss here.

[nytemare]

55. This can be confusing.

Here is another article saying that the CBO reported that the plans would not pay for themselves and would increase the deficit.

:wtf:

http://www.cnn.com/2009/POLITICS/07/19/health.care/index.html?eref=rss_us

[ProudDad]

57. So the FUCKERS are going to fuck up Medicare

and kill a few of us old duffers (but who gives a shit, right?)...

"Net Medicare and Medicaid savings of $465 billion"

To make it look like this bullshit package of compromises, giveaways to the health insurance mafia and Big Pharma and GE is "health care"...

Instead of passing REAL Health Care -- HR676 (read it, it's only 30 pages - not the 1100 pages of this bullshit bill)!

Thank you very little, Barack and the Dems. Fuck you very much, Barack and the Dems.

I'd rather see them Score HR676 -- probably SAVE $3 TRILLION over the next 10 years instead of costing money...and would cover EVERYONE (every PERSON)...

--------------------------------------------------------------------------------------

But, actually I'm not worried. They'll never get this turkey through the Fascist Senate...