The Senate Health Bill: The True Costs are Umknown

NCPA
Nov 30, 2009

Senate Majority Leader Harry Reid's (D-Nev.) 2,074 page health care reform bill depends on budget gimmicks and unrealistic assumptions and projected savings to achieve its $900 billion threshold goal over the 10-year budget window, says the Heritage Foundation.

In fact, there are four outrageous budget tricks contained in the new bill, says Heritage.

The bill excludes the costly "doctor fix":

Senate bill conveniently ignores the over $200 billion price tag associated with stopping the unavoidable cuts to physicians under the Medicare program. The Congressional Budget Office (CBO) estimates that combining the House bill (H.R. 3961) with the "Doctor Fix" bill (H.R. 3962) would actually "add $89 billion to budget deficits over the 2010-2019 period." The bill manipulates the new CLASS Act:

The Senate bill, like the House, also includes a new government health care program for long-term health insurance, the CLASS Act. The CBO points out that the CLASS Act would eventually lead to net outlays when benefits exceed premiums. Delays costly benefits:

The Senate bill is designed to gather revenues (higher taxes, fees, and other offsets) over the full 10-year window but delays paying out the major benefits, like subsidies, until the last six years. So, the 2010-2019 estimate is not a full cost estimate of all provisions fully implemented and will certainly add significantly to the true cost of the bill. Depends on uncertain cuts to Medicare:

The Senate bill depends on using cuts to Medicare to pay for its $1.2 trillion coverage expansion. These cuts include over $118 billion in "savings" resulting from changes to the highly popular Medicare Advantage plans, a move that will directly impact the benefits of millions of seniors.

Source: Nina Owcharenko, "The Senate Health Bill: The True Costs Are Unknown," Heritage Foundation, November 20, 2009.