The CBO's Health Plan Cost Debut and Medicare Benefits Enunciated
What follows for a number of paragraphs is Final Legislation, a White House blog posted by Dan Pfeffier on March 18, 2010 at 5:08 PM EDT:
The final health insurance reform legislation that will be voted on by the House this weekend, and debated in the Senate soon after, is now available. As the President said in Ohio, "We have debated this issue now for more than a year. Every proposal has been put on the table. Every argument has been made." This legislation represents the best ideas to emerge from both sides of the aisle to put American families and small business owners — not the insurance companies — in control of their own health care.
It makes health insurance affordable for middle class and small businesses — including the largest middle class tax cuts for health care in history — reducing premiums and out-of-pocket costs. It gives millions of Americans the same types of private insurance choices that members of Congress will have — through a new competitive health insurance market that keeps costs down.
It holds insurance companies accountable to keep premiums down and prevent denials of care and coverage, including for pre-existing conditions.
It improves Medicare benefits with lower prescription drug costs for those in the ‘donut hole,’ better chronic care, free preventive care, and nearly a decade more of solvency for Medicare.
[Editor's Note, the Donut Hole or Coverage Gap defined by Medicare:
Medicare drug plans may have a "coverage gap," which is sometimes called the "donut hole." A coverage gap means that after you and your plan have spent a certain amount of money for covered drugs (no more than $2,510), you have to pay out-of-pocket all costs for your drugs while you are in the "gap." The most you have to pay out-of-pocket in the coverage gap is $3,216.25. This amount doesn’t include your plan’s monthly premium that you must continue to pay even while you are in the coverage gap. Once you’ve reached your plan’s out-of-pocket limit, you will have "catastrophic coverage." This means that you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.15 or $5.35 for each prescription) for the rest of the calendar year. Note: If you get extra help paying your drug costs, you won’t have a coverage gap. However, you will probably have to pay a small copayment or coinsurance amount.]
It reduces the deficit by more than $130 billion over next ten years, and by more than one trillion dollars over the following decade; reining waste, fraud and abuse; overpayments to insurance companies and by paying for quality over quantity of care.
Read the rest of the health care bill blog at the White House site
The Congressional Budget Office has delivered their score for the costs of the Health Care Reform Bill and its estimates have been referred to above:
"Preliminary Cost Estimate for Pending Health Care Legislation The Congress is considering the pending health care legislation in two components: One is a bill (H.R. 3590) that the Senate passed in December; the other is a "reconciliation" bill that would modify the Senate-passed bill in a number of ways. (In general, a "reconciliation" bill seeks to implement instructions in the Congressional budget resolution in order to achieve the budgetary goals set forth in that resolution; special parliamentary procedures apply to the consideration of such bills.)"
"CBO and the staff of the Joint Committee on Taxation (JCT) have just completed a preliminary estimate of the direct spending and revenue effects of the reconciliation proposal that was made public on March 18, 2010. (Direct spending is spending that would result from enactment of this proposal without any further legislation. The estimate does not encompass discretionary spending, which would be subject to future action in appropriation bills.)"
"The estimate is presented in three ways:"
"An estimate of the budgetary effects of the reconciliation proposal, in combination with the effects of H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), as passed by the Senate. The combination of those two pieces of legislation would reduce federal deficits by an estimated $138 billion over the 2010-2019 period."
"An estimate of the incremental effects of the reconciliation proposal, over and above the effects of enacting H.R. 3590 by itself. CBO and JCT estimate that enacting the reconciliation proposal would add about $20 billion to the deficit reductions over the 2010-2019 period, on top of the $118 billion in net savings attributable to the Senate-passed H.R. 3590."
"An estimate of the budgetary impact of the reconciliation proposal under the assumption that H.R. 3590 is not enacted (that is, an estimate of the bill’s impact relative to current law as of today). Although estimates on that basis have been completed for most of the provisions of the reconciliation proposal, CBO does not yet have such an estimate for all of the provisions. By CBO’s estimate, the provisions that have been analyzed so far would reduce deficits by $82 billion over the 2010-2019 period."
"Although CBO completed a preliminary review of legislative language prior to its release, the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections."
"The reconciliation proposal includes provisions related to health care and revenues, many of which would amend H.R. 3590; those provisions account for most of the budgetary impact of the proposal. It also includes amendments to the Higher Education Act of 1965, which authorizes most federal programs involving postsecondary education; the education provisions account for net outlay savings of about $19 billion over the 2010-2019 period."
"Although CBO does not generally provide cost estimates beyond the 10-year budget projection period, certain Congressional rules require some information about the budgetary impact of legislation in subsequent decades, and many Members have requested CBO’s analyses of the long-term budgetary impact of broad changes in the nation’s health care and health insurance systems. Therefore, CBO has developed a rough outlook for the decade following the 2010-2019 period. We estimate that the combined effect of enacting H.R. 3590 and the reconciliation proposal would be to reduce federal budget deficits over the ensuing decade relative to those projected under current law — with a total effect during that decade that is in a broad range around one-half percent of gross domestic product (GDP)."
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