CBO Deals Blow to House Health Plan

CBO: Dems need to come up with more money to pay for plan

By PATRICK O'CONNOR

Updated 1:30 AM CDT, Sat, Jul 18, 2009

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Obama's health plan circulating in Congress would leave 17 million people within the U.S. uninsured — nearly half of whom would be illegal immigrants who are denied coverage under the bill.

Associated Press/H.Rumph Jr.

The nonpartisan Congressional Budget Office dealt another blow to House Democrats on Friday night, saying their health care bill would increase the federal deficit by $239 billion over the next 10 years.

The projected shortfall means Democrats would need to find additional revenue or make deeper cuts to existing programs in order to meet their goal of paying for the $1 trillion bill.

But those projections don't account for a $245 billion reduction in the deficit this legislation would create, if Democrats can also approve new balanced budget rules that would permanently address an annual shortfall in Medicare payments to physicians.

The CBO also found that the measure would provide health coverage to 37 million people, — meaning 97 percent of all U.S. citizens would be covered by some form of health care if these changes are enacted.

The plan would leave 17 million people within the U.S. uninsured — nearly half of whom would be illegal immigrants who are denied coverage under the bill.

The overall cost of the bill and its impact on the deficit both became major flashpoints for rank-and-file Democrats after party leaders introduced the legislation earlier this week.

Many Democrats are pushing their leaders to find additional savings and scale back some of the $583 billion in new tax revenue and small business fees the authors had planned to raise over the next 10 years.

The legislation introduced in the House makes changes to existing Medicare programs that would save the federal government $219 billion over the next 10 years, according to the CBO estimates.

But the biggest change would come from the enactment of new accounting rules — something CBO still can't account for because those new rules haven't become law.

In the bill, Democrats provide $245 billion to eliminate an annual shortfall in payments to doctors under Medicare. Democrats resolved this annual headache, in large part, to win crucial support for the bill from the American Medical Association. That money currently counts against the overall costs of the bill, but Democrats have introduced legislation that would remove remove this obligation from federal deficit. However, CBO won't recognize that change until those new pay-as-you-go rules become law.

In the meantime, the three chairmen who introduced the measure – Education and Labor Committee Chairman George Miller (D-Calif.), Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) – moved quickly to put a good face on the numbers after they were released Friday night.

“This fulfills the strong commitment of the President and House leadership to enact health reform on a deficit-neutral basis,” the three chairmen said in a joint release. “The reforms included in this legislation will help control health care costs and expand access to quality, affordable coverage to all Americans in a fiscally-responsible manner.”