The Wonk Room

Comparing The CBO Scores For Different Health Care Bills

We’re still waiting on the the language of the reconciliation bill, but I’ve gone through the preliminary CBO report and pulled out some numbers to compare the new package with the old Senate and House drafts. Obviously, the new package spends more and achieves greater deficit reductions than the old Senate bill. It puts more money towards affordability credits, increases the federal contribution towards Medicaid and increases Medicaid reimbursement for primary care physicians. The bill pays for this new spending by imposing higher penalties on employers, extending the payroll tax to unearned income and levying new taxes on the pharmaceutical, medical device, and insurance industries.

Here is a breakdown of the different CBO scores:

One of the most stunning numerical changes is in the excise tax on Cadillac plans. While the bill changes the indexing from inflation plus 1 to inflation — strengthening the provision — it pushes back the entire effort to 2018 and significantly raises the thresholds. I suspect the bill makes up the difference with the payroll tax and the savings from the college loan provisions. More to come.

NEW CBO SCORE: Package Would Reduce Deficit By $138 Billion, Cover 32 Million Americans

The Congressional Budget Office’s preliminary analysis of the reconciliation package, which aims to bridge the differences between the House and Senate health care bills, concludes that the legislation would cost $940 billion over 10 years, reduce the deficit by $138 billion over 10 years and by $1.2 trillion over 20 years. Significantly, the bill reduces annual growth in Medicare expenditures by 1.4 percentage points per year and extends Medicare solvency “by at least 9 years.” The bill also extends insurance to 32 million individuals, covering approximately 95% of the population over 10 years. Compared with previous House and Senate proposals, this package achieves the greatest deficit reductions and could play a significant role in swaying blue dog Democrats to support the bill by the time the House votes on Sunday:

Once the text of the final legislation becomes available, I will post a comparison table of the House and Senate bills, but for now it may be helpful to highlight the scope of this achievement. As the Council of Economic Advisers reported over the summer, “health care expenditures in the United States are currently about 18 percent of GDP, and this share is projected to rise sharply. If health care costs continue to grow at historical rates, the share of GDP devoted to health care in the United States is projected to reach 34 percent by 2040.” The number of uninsured will rise to 72 million in 2040 in the absence of reform. The amount of dollars spent in Medicare and Medicaid will also rise at an unsustainable rate.

This package covers 32 million Americans and, as the reduction in Medicare spending suggests, begins to slow the growth in health care spending. It reverses the current trend and lowers the deficit quite substantially over the next 20 years.

So this is something to keep in mind as Republicans ignore the deficit reductions in this score and blanked cable tv to argue that the bill is full of gimmicks (because spending starts before benefits) and the government is taking over. In fact, the reverse is true. The bill reduces the deficit over the full 20 years and slows government spending (in terms of Medicare).

Pete Sessions Agrees That ‘Deem And Pass’ Is Legitimate

Rep. Pete Sessions (R-TX) is now the second Republican to reluctantly admit that “deem and pass” is a legitimate procedure that Republicans have used in the past. Asked if he had ever voted for reconciliation or “deem and pass” since joining Congress in 1997, Sessions said that he had, but stressed that it was only in instances where the bills passed the House and Senate:

CALLER: I want to ask you a question. Have you ever voted for the the deem and pass any time since you’re in Congress? And another one. Have you ever vote for reconciliation process before? How about The Paycheck Act in 2001. Did you voted for that, sir?

SESSIONS: I believe I have. As part of processes where bills have been through the House and through the Senate as they go through the process to conference. I believe there have been times that I have voted for it. I think anybody here who is talking about this processes would recognize and understand that we are talking about the bill that will be probably the largest bill in the history of Congress that we vote on in our generation.

Watch it:

Indeed, as a member of the Rules Committee, Sessions has been a big supporter of deem and pass during periods of Republican majority, a process he now considers “a disgrace to the House of Representatives [that] tramples on democracy by attempting to silence the voice of the American people.” As Norm Orenstein reminds us, “in the last Congress that Republicans controlled, from 2005 to 2006, Rules Committee Chairman David Dreier used the self-executing rule more than 35 times, and was no stranger to the concept of “deem and pass.”

Conservatives Use Kucinich’s Support To Argue Bill Will Lead To Single Payer Health Care

Over at The American Spectator blog, Phillip Klein isn’t very surprised about Kucinich’s new-found support for the Senate legislation.”There’s no shock that every single-payer advocate in Congress would talked tough for over a year will ultimately support the final bill,” he writes. The legislation is a slippery slide towards single-payer and Kucinich would be a fool not to support it, the argument goes. Sen. Lindsey Graham (R-SC) agreed:

GRAHAM: Well, I like Dennis, but if you had any doubt this was a liberal bill, now any doubts removed. I don’t think Dennis would be voting for this bill if he didn’t think it accomplished a lot of the liberal goals of expanding health care and giving the government a bigger role in health care. It does cut Medicare, it does raise taxes and I think Dennis’ goal of more government run health care is being accomplished or he wouldn’t vote for it.

Watch it:

But this argument really doesn’t make much sense. During the presser, Kucinich explained that he was voting for the bill “as is” and described his support as a “detour” from the single-payer cause. “As this bill passes, I will renew my efforts to help those state organizations which are aimed at stirring a single payer movement which eliminates the predatory role of private insurers who make money not providing health care”:

KUCINICH: I have doubts about the bill. I do not think it is a step toward anything I’ve supported in the past. This is not the bill I wanted to support even as I continue efforts until the last minute to try to modify the bill….I know I have to make a decision not on the bill as I like to see it, but as it is…. I’ve taken a detour through supporting this bill. But I know the destination I will continue to lead for as long as it takes, for whatever it takes to an America where health care will be firmly established as a civil right.”

In other words, Kucinich doesn’t believe that a bill that excludes the public option and requires Americans to purchase private coverage will lead to some tremendous increase in government involvement and neither do most of the Democrats in the Senate who voted for the legislation. In fact, even the Congressional Budget Office has concluded that the Senate bill would create “no significant change in [the government's] commitment [to health care].”

If anything, the bill represents a tremendous compromise of Democratic and Republican ideas. The final product is something neither side is incredibly happy with, but most Democrats believe (now with Kucinich on board) that it will establish the necessary foundation for achieving universal coverage.

Republican Congressman Makes Strong Case For Single Payer Health Care

Conservatives sometimes try to rally progressives to oppose the Senate health care bill by characterizing the legislation as a give away to private insurers. But this morning, retiring Congressman John Shadegg (R-AZ) took this manufactured outrage to new heights, telling MSNBC’s David Schuster that the bill would give insurers “exactly what they want”:

SHADEGG: The reality is this bill is going to reward for-profit companies that have done a disservice. This bill mandates, with the IRS executing the penalty if you don’t go along, that you and I buy health insurance plans from for-profit companies. That’s an outrage. It’s the same for profit health care companies that have done a lousy job of taking care of this. And yet this bill gives them exactly what they wanted. The insurance industry, the for-profit insurance industry wanted an individual mandate and that’s what they are getting out of this bill. The for-profit insurance industry did not want a public option because they don’t like competition. And guess what? They are getting that. This bill is giving to the for-profit insurance companies and I happen to believe that Dennis is making this point, it’s giving the for-profit insurance companies exactly what they want.

Watch it:

When Schuster pressed Shadegg on whether he would support a “government-run medicare expansion,” Shadegg described his personal health care proposal which, ironically, would go a lot further towards pleasing the insurance industry than the Senate bill. Shadegg’s plan would allow insurers to continue providing completely unregulated insurance policies to cheap-to-cover younger Americans and push older more expensive Americans into tax payer funded high risk pools. Shadegg takes some preliminary steps towards limiting premium growth, but it’s unlikely that these programs will offer affordable or even adequate coverage.

Nationwide, high-risk pools can afford to cover fewer than 200,000 people. States grapple with the high cost of insuring a large pool of very sick people by charging higher premiums, denying benefits for treatments related to their preexisting conditions and limiting eligibility. In fact, according to the Tax Policy Center, subsidizing sick people by grouping them together into a single risk pool could cost as much as $1 trillion over ten years.

Why Does It Take So Long For The CBO To Score?

For those of us covering health care reform, waiting for the Congressional Budget Office to score is always somewhat nerve wracking. We sit at our desks refreshing the CBO web page, scouring the latest twitter updates and reading the tea leaves of lawmakers’ cable news appearances — all this in an effort to see the language the very moment it comes out.

We receive desperate phone calls from our colleagues — who don’t spend the entire day staring at their TweetDecks — asking, “where is it?,” “how much longer?” “why isn’t it here yet?” We’re all incredibly frustrated — particularly since Democrats continue to insist that they will pass the House health care bill before the end of the week — but in this case, the delay is understandable.

As the Washington Post explains, under the rules, the reconciliation package must reduce the deficit by at least $2 billion over the next five years and avoid increasing the deficit in any year thereafter — as measured against the Senate bill:

But virtually everything House Democrats want to achieve in their package costs money. For example, Obama and House leaders have promised to increase government subsidies to help lower-income people purchase insurance, to fully close the coverage gap known as the doughnut hole in the Medicare prescription drug program, and to extend to all states the deal cut with Nebraska Sen. Ben Nelson (D), under which the federal government would pay for a proposed expansion of Medicaid.

Meanwhile, House leaders want to dramatically scale back one of the most powerful deficit-reduction tools in the Senate bill: a 40 percent excise tax on high-cost insurance policies. Obama has proposed to delay implementation of the tax until 2018 and to limit the number of policies that would be subject to the tax.

In other words, it’s taking so long because Democrats are trying to practice what Republicans only talk about — responsible spending and deficit reduction. To accomplish this, lawmakers have to go back and forth with the CBO, “scrambling to come up with additional sources of cash.” So in many ways, the slow, laborious process is to be expected. But having said that, have you heard anything yet?

Eric Cantor Agrees That ‘Deem And Pass’ Is Legitimate

Jonathan Chait argues that political reporters and bloggers have failed to “fully explain” deem and pass “to their readers and put them in the proper context.” Well, this morning on Good Morning America, House Majority Leader Steny Hoyer (D-MD) explained the rule in some very clear terms:

HOYER: We are going to have a clean up or down vote on the Senate bill, that will be on the rule. This is a procedure, by the way, that was used almost 100 times under Newt Gingrich and over 100 times by Speaker Hastert, which my friend Mr. Cantor supported most of the time, if not all of the time. So this is not an unusual procedure. We’re going to vote on a rule. It’s simply like a conference report. Conference report comes back. You vote on it, with amendments.

Unfortunately, the Republicans are a little bit like the boy who killed his two parents and then wants sympathy because he’s an orphan. They’ve tried to stop the passage of this bill. Slowed it up. Wouldn’t agree to go to conference, so what we’re going to do is report out what essentially is a conference report with amendments. So we’ll vote on the Senate bill in the rule and we will amend the Senate bill in the process…

Watch it:

Cantor sheepishly smiled at Hoyer and ultimately agreed. “Yes, Steny is right. The rules of the House allow for this type of deeming provision, it’s called a self-executing provision which means that once the bill, the rule for the next bill passes, the Senate bill is automatically is deemed as having passed,” he said. As Norman Ornstein points out, “that strategy, then decried by the House Democrats who are now using it, and now being called unconstitutional by WSJ editorialists, was defended by House Republicans in court (and upheld). Dreier used it for a $40 billion deficit reduction package so that his fellow GOPers could avoid an embarrassing vote on immigration.”

Now, House Democrats are using it for two reasons. 1) They don’t want to vote for the Senate health care bill (which, as I argue here is a bit of a self-indulgence) and 2) Republicans won’t vote for cloture on the conference report.

Remember, if Republicans really believed that this rule is so unconstitutional — which Cantor actually backed away from asserting this morning — or that passing health care reform would undermine the Democratic party, then they would preserve our founding document and bolster their prospects in the midterm election by voting to “move forward.” After all, they vote for cloture on things they don’t like all the time (on March 10th Sen. Scott Brown voted against a bill extending health benefits after voting for cloture to allow the legislation to move forward a day earlier). Here, they’re choosing to continue obstructing reform and forcing the Democrats’ hand.