Senate health bill wouldn't increase insurance costs for most, CBO says
Tuesday, December 1, 2009
As the Senate opened debate Monday on a landmark plan to overhaul the nation's health-care system, congressional budget analysts said the measure would leave premiums unchanged or slightly lower for the vast majority of Americans, contradicting assertions by the insurance industry that the average family's coverage would rise by thousands of dollars if the proposal became law.
The report by the nonpartisan Congressional Budget Office was released hours before the Senate began debate on the package, which would spend $848 billion over the next decade to extend coverage to more than 30 million additional people. The CBO said the legislation would lead to higher average premiums in the relatively small and troubled individual market, where the self-employed and others buy coverage directly from insurers. But that extra cost would buy better coverage, the CBO said, and hefty federal subsidies would drive down payments by nearly 60 percent on average for low- and middle-income families.
Democrats, who had been nervously awaiting the CBO's pronouncement on premiums, hailed the report as a political vindication that should help reassure wavering moderates in both parties.
"Today's analysis confirms that millions of Americans who lack the necessary coverage to avoid potential financial ruin would have access to more coverage at an affordable price because of our proposal," said Senate Majority Leader Harry M. Reid (D-Nev.), who crafted the measure from bills approved in committee.
Republicans argued that millions of people could face higher premiums with no promise of federal aid. And despite dozens of pages of new insurance industry regulations, they said, the Senate bill would do little to lower premiums for the 160 million people who already have coverage through their jobs.
"For large and small employers that have been struggling for years with skyrocketing health insurance premiums, CBO concludes this bill will do little, if anything, to provide relief," said Sen. Charles E. Grassley (R-Iowa). "CBO's analysis makes clear that the Reid bill is not fixing the problem."
The Senate floor fight is expected to last several weeks, as dozens of amendments will be debated, possibly endangering Democrats' goal of holding a final vote before the chamber adjourns for the holidays. The first amendment Republicans offered Monday would strike more than $400 billion in planned reductions to Medicare spending, a move that would wipe out a major source of financing and cause larger budget deficits, thus falling short of one of President Obama's chief litmus tests for the reform effort.
As Republicans and Democrats sniped across the aisle, Reid was unable to come to terms with Minority Leader Mitch McConnell (R-Ky.) on a schedule for debating additional amendments. If a deal is struck, the first votes could occur Tuesday, Reid spokesman Jim Manley said.
In his office just off the Senate floor, Reid met Monday night with White House Chief of Staff Rahm Emanuel, senior health adviser Nancy-Ann DeParle, Interior Secretary Ken Salazar and White House Deputy Chief of Staff Jim Messina, along with former Senate majority leader Thomas A. Daschle (D-S.D.). The team laid plans to fan out among Democratic caucus members in the coming days as they seek to build a firm 60-vote coalition for final passage.
Changes to the bill could come in the form of individual amendments, or Reid could fold multiple fixes and sweeteners into a final "manager's amendment." Once he thinks he has locked down the votes, he is expected to file a procedural motion to end debate -- a move that could come before Christmas, he has told colleagues and White House officials.
Democrats said the latest CBO report should boost efforts aimed at a final vote this year. The report came in response to a request from Sen. Evan Bayh (Ind.), the leader of a group of Democratic centrists concerned about the legislation's impact on costs for the government and for average citizens, who would be required for the first time to obtain coverage starting in 2014.
Monday's CBO report offers the first objective analysis of the effect on premiums. An earlier study commissioned by America's Health Insurance Plans, an industry trade group, warned that the Senate bill would dramatically increase insurance premiums, but the study's authors at PricewaterhouseCoopers later acknowledged that they had ignored major pieces of the legislation in their calculations.