CBO score gives Baucus health bill a boost with deficit-cutting projections

Sen. Max Baucus’s (D-Mont.) healthcare reform bill took a giant step forward Wednesday as congressional scorekeepers concluded that it would extend coverage to millions of Americans while also cutting the deficit.

The highly anticipated Congressional Budget Office (CBO) analysis provides a much-needed boost to Democratic efforts to overhaul the healthcare system. It comes as House leaders are struggling to craft a bill that can attract 218 votes and bolsters Baucus’s case that his measure has the best chance to pass both chambers of Congress.

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The report states that the Senate Finance Committee bill would reduce the nation’s uninsured population by 29 million people, cost $829 billion, and slash the budget deficit by $81 billion over 10 years.

The CBO report instantly generated momentum for Baucus’s bill and increased the chances it will pass his Finance panel. The official score also brings the Senate closer to a floor debate later this month on President Barack Obama’s signature domestic policy initiative.

Senate Minority Leader Mitch McConnell (R-Ky.) opted not to directly criticize the Baucus bill after the CBO score emerged. Instead, he said the “real” healthcare bill will be “written by Democrat leaders in a closed-to-the-public conference room somewhere in the Capitol.”

The White House touted the CBO score as “another important step forward for health reform. The analysis confirms that we can provide stability and security for Americans with insurance and affordable options for uninsured Americans without adding a dime to the deficit — and saving money over the long term.”

Despite undergoing substantial revisions before and during the Finance Committee’s two-week markup — which concluded after 2 a.m. on Friday — the

CBO estimates that the bottom line of the bill remains the same: It would actually reduce the federal budget deficit over the coming decade while extending insurance coverage to 94 percent of legal U.S. residents.

Using those estimates, the Finance Committee’s measure appears to satisfy Obama’s pledges to extend coverage to nearly all Americans, spend no more than $900 billion and not add to the deficit.

Baucus has had to make many changes to his bill this year, many of which came after high- cost estimates from CBO. Some Democrats were so frustrated with CBO earlier this year that they suggested the White House Office of Management and Budget should be the official scorekeeper for healthcare reform.

The Finance panel has not scheduled a date for its final vote on the bill, but it could slip into next week.

The CBO predicts the bill would “bend the cost curve” of rising healthcare spending and further decrease the budget deficit after the first 10 years.

Though saying this projection is made with an “even greater degree of uncertainty” than its usual 10-year projections, the CBO estimates the Baucus bill “would reduce federal budget deficits over the ensuing decade … in a broad range between one-quarter percent and one-half percent” of gross domestic product (GDP).

“This legislation is a smart investment on the federal balance sheet, and it’s an even smarter investment for American families, businesses and our economy,” Baucus said on the Senate floor.

Baucus told reporters Wednesday evening that he had not spoken to the White House about the CBO score, and rejected GOP complaints that the bill will force states to significantly increase their Medicaid spending.

“Today the Congressional Budget Office confirmed that the legislation in the Finance Committee to reform our healthcare system will be fully paid for and reduces the federal deficit,” Baucus said. “That’s very good news ... I’m very pleased that this will help advance the bill very quickly.”

Despite leaping over the large CBO hurdle, healthcare reform has a long way to go in the upper chamber. The Finance Committee’s bill must be melded with more costly and more liberal legislation approved by the Health, Education, Labor and Pensions (HELP) Committee. Senate Majority Leader Harry Reid (D-Nev.), with assistance from the White House, will lead that effort.

Even though the Finance and HELP committee bills share the same basic structure — similar to Obama’s campaign platform — the differences between the two measures underscore the divide between the liberal and centrist wings of the Senate Democratic conference.

The foremost point of contention is whether to create a government-run public option insurance program. The HELP Committee included these provisions, which are strongly supported by Senate liberals. The Finance Committee bill left the public option out of its bill, which instead would enable states to establish basic health plans using federal dollars and provide federal seed money for nonprofit healthcare cooperatives.

In addition, the HELP Committee bill would establish a mandate that most employers provide health insurance. The Finance Committee includes no mandate and instead would assess larger companies a fee when they do not offer coverage.

The HELP Committee bill offers more generous subsidies to more people than the Finance Committee bill. The question of whether health insurance would be affordable to the low- and middle-class people under reform is extremely controversial.

During the Finance Committee’s markup, Democrats on the panel as well as Republican Sen. Olympia Snowe (Maine), a crucial swing vote, expressed deep skepticism that Baucus’s bill would offer enough assistance. Though they succeeded in boosting the tax credits and relaxing the individual mandate and the penalties for not obtaining insurance, committee members indicated they were not fully satisfied.

According to the CBO, the bill would establish health insurance exchanges for 23 million people who do not get coverage at work or work for small businesses. Most people would be legally required to obtain some form of coverage and tax credits would be provided to offset the cost for people between 133 percent and 300 percent of the federal poverty level, with limited assistance for people between 300 percent and 400 percent of poverty.

Three million of the 162 million people who currently have employer-sponsored insurance would get it elsewhere.

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Medicaid would be expanded to cover everyone between 100 percent and 133 percent of poverty. Medicaid and the Children’s Health Insurance Program (CHIP) would combine to cover 14 million more people.

The individual and family tax credits would cost $461 billion, the small-business tax credits would cost $23 billion, and Medicaid and children’s health insurance spending would increase by $345 billion.

To offset these new expenditures, the Finance Committee bill would cut $401 billion in spending, mostly in Medicare, and $110 billion in other spending reductions. Taxes on high-cost insurance plans and on healthcare companies would generate $196 billion, according to the CBO.

J. Taylor Rushing contributed to this article.