CBO: New Baucus Deficit Neutral Bill Costs $829B, Will Reduce Deficit By $81 Billion Over Next Decade
CBO: New Baucus Deficit Neutral Bill Costs $829B, Will Reduce Deficit By $81 Billion Over Next Decade
The Congressional Budget Office has estimated that the new version of the Senate Finance Committee’s health bill “will result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period.” The Committee’s deficit neutral proposal will cost approximately $829 billion, about $55 billion more than the original pre mark-up version, but about $71 billion less than President Obama’s $900 billion target. The full Committee is expected to vote on the final bill sometime next week.
During 7 days and more than 80 hours of mark-up, the Committee considered over 140 different amendments and voted on 103. In fact as Chairman Max Baucus (D-MT) pointed out throughout the hearings, “it has been 15 years since this committee has held mark-up that took five days.” “Since then we have held more than 150 mark-ups and most of those took one or two days.” Baucus reminded Republicans that “the 2001 tax cut bill was a $1.3 trillion bill, we spent, I don’t know how many days on that, not too many days. This is a $900 billion bill…this committee hasn’t spent actually more than two days in mark-up for ten years. But this is a big bill and we’re just trying to find away to find the right balance here, the balance between understanding the bill on one hand, and acting on the other,” Baucus said.
Per the Chairman’s instruction, the committee’s health care bill had to remain deficit neutral and cost less than $900 billion over 10 years. Today, the CBO concluded that the committee met its goal. Here is a comparison of how the bill evolved during mark-up:
| Old CBO Score Of Baucus Bill | New CBO Score Of Baucus Bill | |
| Costs | Reduce deficits: $49B/10yrs Net Cost: $500B/10yrs Gross cost: $774B/10yrs Spends on subsidies: $463B/10yrs |
Reduce deficits: $81B/10yrs Net Cost: $518B/10yrs Gross cost: $829B/10yrs Spends on subsidies: $461B/10yrs |
| Insured | Uninsured reduced by: 29M Uninsured in 2019: 25M In Exchanges: 25M In Medicaid: 11M |
Uninsured reduced by: 29M Uninsured in 2019: 25M In Exchanges: 23M In Medicaid: 14M |
| Revenue | Tax high cost plans: $215B/10yrs Mandate penalty: $20B/10yrs Free rider penalty: $27B/10yrs Indirect offsets: $12B/10yrs |
Tax high cost plans: $201B/10yrs Mandate penalty: $4B/10yrs Free rider penalty: $23B/10yrs Indirect offsets: $83B/10yrs |
| Medicare and Medicaid |
Total savings: 409B/10yrs Payment updates: $182B/10yrs Medicare Advantage: $123B/10yrs DISH Payments: $48B/10yrs Medicare Commission: $23B/10yrs |
Total savings: 404B/10yrs Payment updates: $162B/10yrs Medicare Advantage: $117B/10yrs DISH Payments: $45B/10yrs Medicare Commission: $22B/10yrs |
Despite the positive CBO score and the bipartisan nature of the bill, it incorporates many conservative ideas, Republicans are still dismissing the legislation. In fact, during the last few minutes of mark-up, Sen. Chuck Grassley (R-IA), the ranking member on the committee conceded that regardless of the CBO score, “There is a product here that all of the people on my side may not vote for.”
23 Responses to “CBO: New Baucus Deficit Neutral Bill Costs $829B, Will Reduce Deficit By $81 Billion Over Next Decade”
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Is the $81B saved enough to get someone to suggest they add back the public option or look more seriously at single payer?
October 7th, 2009 at 4:49 pmWhy haven’t the dems figured out that the reps are going to cooperate just enough to make sure that the legislation is crap and then let the dems pass it themselves and be straddled with it for years to come? If the reps won’t come to the table in good faith, then craft a quality bill with a public option without them. By the way, it is completely unconscionable that a mandate would be passed without a public option. Dem resistance to a public option is inextricably bound to campaign donations from the healthcare lobby. It’s time the White House started calling out these dems by name.
October 7th, 2009 at 5:16 pmI think you have a typo. Tax high cost plans: $210B/10yrs – should be $201B/10 yrs.
October 7th, 2009 at 5:21 pmHow much of this is because they are shifting the cost to the states?
October 7th, 2009 at 5:24 pmFixed it, thanks Julian!
October 7th, 2009 at 5:25 pmIs there a similar chart somewhere that compares all 5 bills?
October 7th, 2009 at 5:29 pmThe untold cost of this bill will be the illegal immigration aspect. Once passed, the families of working aliens will no longer stay behind they will be brought here. Not to mention, the ability to get a higher quality care then what is available in Canada. I would surmise the amount of illegals in USA will double upon passage and/or implementation of this bill.
Am I incorrect in my logic?
October 7th, 2009 at 5:42 pm25 million buying individual policies in the insurance exchange
Small business coverage averages 20% more than large corporation group plans. Individual coverage pricing is even more distorted, 50-100% more than large group plans.
The taxpayer will backstop reinsurance losses from all those new individual plans, i.e. taking the risk for private insurers.
No change in the uninsured numbers?
Why were the insurance and hospital lobbies crying over fewer covered?
25 million remain uninsured.
10 million more will lose employer coverage by 2018.
October 7th, 2009 at 6:16 pmIgor
What makes up indirect offsets? Seems like this category is the reason that the new bill has a higher deficit reduction amount than the old one.
October 7th, 2009 at 6:24 pmIgor said the bill’s amendments would improve affordability.
http://wonkroom.thinkprogress.org/2009/10/02/affordability-sf/
They did not work as advertised. Gross and net costs went up.
The two million exempt from the mandate didn’t show up in the new numbers.
October 7th, 2009 at 6:24 pmIgor,
What makes up Indirect offsets? The increase in indirect offsets from $12B to $83B is the reason the deficit reduction is higher in the new bill vs the old bill.
Also, the Baucus bill subsidies do not begin until July, 2013 and Medicaid expansion does not go into effect until 2014. What are the start dates in the House and Senate HELP bills?
October 7th, 2009 at 7:23 pmThe short answer is yes. The long answer is that this plan specifically denies subsidies to illegal immigrants, which means that the only health care options they have are the ones they have now: they can either buy insurance with their own money, or show up in an emergency room and get emergency care. While it is true that this legislation aims to make insurance more affordable for everyone, it’s hard to imagine premiums becoming inexpensive enough for most, if not all, illegal immigrants.
October 7th, 2009 at 7:28 pmI am damn sick and tired of the Goppies amending the heck out of bills and putting in special earmarks and then not voting for the bills. Can someone offer an amendment to strip out all the amendments and earmarks that were put in place by those who do not ultimately vote for the bill?
October 7th, 2009 at 7:52 pmThanks Amol.
I do believe we are opening a legal pandoras box with this bill in its present form and inviting a ton of fraud.
I know I will lose my company health care shortly upon passage of this legislation and be forced to go one of the other plans (at least a new plan)…and that irks me to no end.
October 7th, 2009 at 8:19 pmi do not believe anything the democrates have to offer. we are going to get screwed. period.
October 7th, 2009 at 10:24 pmThe tax increase on the rich brings in 10 trillion in 10 years. The cost of a public option is 829 billion. add a savings of 81 million due to competition and it is now….A no brainer. Pull the cord! :)
CBO Says Finance Health Reform Bill Will Save $81 Billion in a DecadePolitics
The Washington Independent – 7 hours ago
The Senate Finance Committee’s health reform bill will save the federal government $81 billion over the next 10 years, according to the much-anticipated Congressional Budget Office estimate released this afternoon.
* CBO: New Baucus Deficit Neutral Bill Costs $829B, Will Reduce Deficit By $81 Billion Over Next Decade – Wonk Room
October 7th, 2009 at 11:57 pm* Senate health bill: $829 B, deficit-cutting – The Swamp
* Vapor Bill Outrage in the Imperial Senate – RedState
MO Blue asked twice, I am also asking here:
What is this item called ‘indirect offsets’ under Revenue section which is all the difference?
Igor has done great job of putting this table. Can we ask more? Again – what is this ‘indirect offsets’ and what changes there?
Also to pick another reader’s question – how much are States ’stiffed’ further?
Thanks.
October 8th, 2009 at 12:55 amSomething is off with the uninsured numbers? The above says that 29 million of the uninsured with be insured, with 25 million remaining. That would be 54 million uninsured without counting the undocumented/illegals? Where do these numbers come from?
October 8th, 2009 at 1:14 amI guess I can answer my own question in that the 25 million number is for 2019, when the population of the country would be more than the 306 million or so that it is now. But how can anyone project that number in ten years? Why couldn’t we get it down lower, especially if subsidies pay for low-income folks?
October 8th, 2009 at 1:49 amDid you note that the CBO’s scoring is an educated guess based not on actual legislation, which doesn’t exist, but on conceptual language on which is it impossible to make an accurate estimate?
I say we need to see the actual language of the bill before we accept any cost estimate. The director of the CBO agrees.
October 8th, 2009 at 8:28 amIt’s my understanding that more than half of the 30 million additionally insured by this bill, will be insured through Medicaid, and that the federal mandate to cover them will push the cost down to the states, with little federal $$ help.
Ergo, all they’ve really done to make their “federal” program look like it doesn’t increase the federal deficit, is to increase the state costs, in a time when most state budgets are broke.
Consequently, not only will our federal taxes go up, but our state taxes will, too, to meet the unfunded federal mandate the Baucus Bill imposes.
A new definition of TRICKLE DOWN, I’m thinking.
October 8th, 2009 at 10:26 amIt’s paid for with $100Bil left over.
The richest people won’t have the option. Stop looking a middle class gift horse in the mouth. :scream: :)
October 8th, 2009 at 4:34 pmI’m a Democrat AGAINST the Individual Mandate.
Most people are ignoring this, but if more Democrats became aware that the Individual Mandate means the government will coerce (force) you… indeed everyone… to buy health insurance, they would be against any of the current bills.
The Individual Mandate will force millions to suddenly purchase insurance, the increased demand will cause premiums to skyrocket. I can barely afford to feed my family now. I can’t afford hundreds of dollars more each month in insurance premiums.
Additionally, the Baucus bill just shovels money at the insurers and does nothing to reduce costs, has no public option (required!), and leaves more than half of the uninsured still without insurance anyway. Then there are the steep PENALTIES in the Individual Mandate for those who don’t buy insurance…
No way, just leave it how it is. This mess is the Nanny State at its worst, now I see what the Republicans are complaining about (for the first time).
October 8th, 2009 at 4:47 pm