Monday, July 20, 2009

Counterpoint: Revenue-Neutral Health care "Reform"

In the comments, longtime reader and frequent commenter Rick takes me to task for my use of Congressional Budget Office estimates of the estimated costs of the administration's pet health care proposal. Rick has demonstrated his credibility on this issue before, so in the interests of fairness, here's what he has to say:

The least we could do at IB is get the stenography right.
The CBO said the total SPENDING of the health plan would be $1 trillion over 10 years. The actual DEFICIT over 10 years would be $239 billion, or $23.9 billion a year, give or take. There have already been almost $800 billion found in various offsets and revenue sources to pay for the legislation -- which, we will all note, does nothing about cost containment.
Now, $239 billion is not nothing over 10 years. But at least it's accurate.
And it's a helluva lot less than we spent off-the-books on the War on Terror (until this year, when the President insisted that all the war costs actually be budgeted).
Here's the CBO quote from California Healthline:
"The estimate -- released late last week -- puts the gross cost of the bill at $1.04 trillion between 2010 and 2019.
Spending provisions in Medicare and Medicaid would reduce spending by $219 billion over that period, while a surtax on individuals and families with high incomes would increase federal revenues by about $583 billion, totaling $802 billion of the cost of the $1.04 trillion package, leaving the plan $239 billion short.
CBO said the biggest savings would come from a proposal to make permanent reductions to the annual updates to Medicare's payment rates for nearly all services in the fee-for-service program besides physicians' services.
That would reduce spending by $196 billion over 10 years, the CBO estimated."
So, all that being said, $239 billion over 10 years is highly "find-able" savings, if the Congress-critters can actually strap on a pair and call for some real cost containment.
Sounds like we're on the path to a revenue-neutral bill. Can the promised land of declining medical cost trends be far beyond?
P.S. I don't know if the $219 billion in cost savings from Medicare and Medicaid includes the $155 billion hospitals pledged to cut in the name of healthcare reform, or the $80 billion the pharmaceutical manufacturers promised to the effort. If the CBO scoring does NOT include these, then we may already have a revenue-neutral bill. How cool is that?"
blog comments powered by Disqus