Free Markets, Free People

CBO Says Baucus Bill Won’t Add To Debt – But It Will Leave 16 Million Uninsured

The Washington Post’s “Capitol Briefing” breathlessly announces:

A health-care reform bill drafted by the Senate Finance Committee would expand health coverage to nearly 30 million Americans who currently lack insurance and would meet President Obama’s goal of reducing the federal budget deficit by 2019, the nonpartisan Congressional Budget Office said Wednesday.

The bill would cost $829 billion over the next decade, but would more than offset that cost by slicing hundreds of billions from government health programs such as Medicare and by imposing a 40 percent excise tax on high-cost insurance policies starting in 2013.

All told, the package would slice $81 billion from projected budget deficits over the next 10 years, the CBO said, and continue to reduce deficits well into the future.

That, of course means:

And the CBO report lends a huge political boost to the Finance Committee’s work: distinguishing it as the only one of five bills drafted by various congressional committees that meets every important test established by President Obama and key Democratic leaders.

— It would cost less than $900 billion over the next decade;

— It would vastly expand coverage; and

— It would keep Obama’s pledge that health reform will not increase budget deficits by “one dime” now or in the future.

Whooo hooo! Happy days are here again!

A couple of things to remember: In 1967, official estimates said Medicare would cost $12 billion in 1990. The actual price was $110 billion. And it and Medicaid now have about 50 trillion in unfunded future obligations. Secondly, the reason it doesn’t add to the deficit is it cuts Medicare and will force businesses to either pay an excise tax or drastically cut benefits for those who have what the elite have determined are “Cadillac” plans. Of course what that means is if you like your plan, you can keep it, but your no longer going to like your plan (because it could cost you up to 40% plus more to maintain that plan).

And then there’s this: I thought the whole stated purpose of this “reform” was to ensure the uninsured were insured. Yet the CBO report says:

By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants).

So 16 million US citizens remain uninsured. But fear not – CBO has figured that into the equation as a revenue raiser:

… penalty payments by uninsured individuals, which would amount to $4 billion;

Not to mention you could be spending a year in jail as well.

And those unfair “Cadillac plans” will add to that revenue stream as well (except, apparently, if it is a union plan):

….penalty payments by employers whose workers received subsidies via the exchanges, which would total $23 billion;

And here’s what to be really careful of when assessing this boondoggle that still leaves people uninsured (but does provide yet another law to put people in jail):

The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments. As a result, CBO estimates that of the $6 billion in federal funds that would be made available, about $3 billion would be spent over the 2010–2019 period.

As the CBO once said on its initial scoring, this bill would have to run, unchanged, for 10 years for it to unfold, cost wise, as they’re saying it will unfold. That means co-ops, not the public option.

If the public option is included, all the savings supposedly found in this bill go out the window and costs skyrocket. And Nancy Pelosi and Harry Reid say that the final bill will have a public option.



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24 Responses to CBO Says Baucus Bill Won’t Add To Debt – But It Will Leave 16 Million Uninsured

  • And of course those penalty paying employers/employees for the cadillac plans won’t alter their behaviors at all and that swag 23 billion in revenue will be a shoo in. It might even go UP! yeah, that’s the ticket! my forecasts say MORE people will be covered under cadillac plans and the revenue will increase to (holds finger in air) 45 billion.


  • I keep getting stuck on this quote:

    but would more than offset that cost by … imposing a 40 percent excise tax on high-cost insurance policies starting in 2013.

    Let me get this straight: we have a health care crisis in this country because insurance is expensive. So the solution is to make it more expensive?

    • That’s not the point, Steve. The whole idea is for everyone to have insurance, piss-poor though it may be. If you’re complaining about losing good coverage then you’re obviously a greedy and uncharitable member of society, and the government needs to step in and force you to help others.

      Or something like that, anyway.

  • Here’s how those elite Cadillac plans work.

    1) The government pays what Medicare would have covered.
    2) Additional money is combined by the participant paying additional premiums above and beyond Medicare.
    3) The government gives an additional sum commensurate with the administrative costs the Medicare system would have incurred.

    Basically those ‘cadillac’ plans reduce the administrative burden on the Medicare system. The Paperwork is handled by the private insurer and they got paid to do it.

    The payment was sufficient that in some areas under some plans run by non-profits, you actually had a negative premium for joining. You were paid to take the insurance. They could offer more broader benefits at a cheaper cost than Medicare could operate under. YMMV.

    So now they’ve decided not to cover the administrative fee.

    Well, guess what? The money they saved will now become a larger burden on Medicare as they need to expand to handle the administration those private insurers had handled.

    But hey, this is really about souring the old systems of private insurance and even Medicare to create a public not only willing to accept a public option, but asking for one.

  • One of the purposes of this proposed takeover, among its many malign purposes, is to cover the bankruptcy of Medicare.

    Consider that for a moment.

    One Ponzi scheme (Medicare) will be covered by a larger Ponzi scheme (the “Public Option” or its stealthy substitute) that steals previously stolen assets (payouts) back from Medicare and mixes them in with new theft from the still functional private medical insurance industry et al.

    It’s a government bailout of a bankrupt government program designed to gradually bankrupt private insurance so as to draw payments currently made to private insurance into government to keep the new larger Ponzi scheme going until it goes Madoff.

    But it’s also classic sadomasochism: you’re really supposed to feel a thrill when you hear that sound of the government health commissar snapping on the latex glove.

    “We’re sorry Mr. Jones but our guidelines indicate that the treatment you require is simply unavailable for eighteen months.”

    “But that patient who just went by in the wheelchair came in this morning and received the same treatment I need before lunch.”

    “Well, that’s Warren Beatty, Mr. Jones. You’re not eligible for his treatment, but we can give you some pills.”

    Don’t worry though, your organs will be bundled and securitized with those of millions of other covered patients, and sold on the Shanghai Stock Exchange so that your coverage can be maintained.

    Nothing to worry about. It’s going to work like a charm.

  • It does have taxes and cuts for the ten year term, but only offers about 7 1/2 years of services. So at the end of 10 years, it will be either underfunded or on it way to be underfunded.

  • It has taxes on everyone, individuals, companies, pharmicutal, devices manufacturers, insurance companies. I can see that the taxes will all be paid by individuals as policy prices will rise and device manufacturers will move off shore to China.

    By the year 2015 the cost will implode sky high costing another trillion per year to keep it going. Look at Mass it only took 2 years until they hit the ropes.

    Here in Germany we have the so called universal health care and it operates in this manner.

    1. 50/50% split between worker and company.
    2. Patients pay out 10 Euro to see a doctor due to rising prices.
    3. Government collects and spends 40 billion Euros on medical care for the unemployed and government employees and one half of retirees health care premiums. Facing a defict of 7.5 billion on medical budget this year already.
    4. Next year budget for health care is budgeted at 60 billion – hopefully not too low.
    5. Medical malpractise lawsuits are handled by the government as private lawyers are not allowed to suit for damages, etc. Patients are not awarded damages when a doctor is sued by the government. Tort law.
    6. This system is for 74 million Germans and over 5 million Germans have purchased Private Insurance so they can receive treatment ahead of people under the system.
    7. Hospital and doctors rates of pay are set by the government. A demonstration this year by all medical personnel against the government for slave wages. Young doctors leaving in droves for other countries.

    The German Universal Health Care system.

    • Hrrmph! What outrageous calumny! What do you know about Germany? You may expect to hear from our resident expert on all things German and European and everything else.

      Good day sir.

      • Rumpole? Or Sir Roderick? Top hole either way, but you are missing “Pork chops and applesauce!” and “A thin tissue of lies and deceit” or (my particular favourite) “the death rattle of a sand-eel.”

        Tinkerty-tonk (in the non-stinging sense)

  • The Baucus menagerie is as offensive in many ways as the rest of the crap that the Senate HELP Committee and the three House committees passed. Fines, taxes up the wazoo, “exchanges,” “triggers,” and other piles of mulefrittered horsecrappola served to show that 1) this is what happens when you put Demmies in control, and, more importantly, 2) this is what happens when you put Demmies in control.

    I cannot wait until the first person is “fined” because of the sh!tty mandate in this bill, who is then jailed for tax evasion. Has anyone ever heard of the word “martyr”? That person will become a martyr of ObamaCareTM.

  • “… but would more than offset that cost by slicing hundreds of billions from government health programs such as Medicare…”

    Does anyone really expect Medicare et al. to be cut? As soon as the first cuts hit and benefits are cut, the resulting wailing will cause Congress to pass an ’emergency’ supplemental appropriation toot sweet.

    • That’s one of the big lies buried in this bill – Democrats aren’t going to alienate the senior demographic, so cuts, if they come, will be minimal and certainly not to the level necessary to “save” what they claim they’re going to save.

      • Perhaps, but if you follow the “bioethics” crowd at all, of which there a few choice examples hovering around this thing, then you know that one of the ways of handling the problem of alienating the senior demographic is to make cuts in the demographic itself. I recommend Wesley Smith’s blog Secondhand Smoke on the hastening evolution of the “right to die” into the “duty to die.”

        Basically, when you hear the word “bioethics” its like in It’s a Wonderful Life when a bell rings it means an “angel just got his wings,” except that when you hear the word “bioethics” it means the door to the crematorium just closed behind someone.

        • When I hear the word ‘bioethics,’ what I’m actually hearing is ‘eugenics.’

    • Well, yes, I do expect Medicare to be cut, one way or another.

      But I do think that there will be, proportionally, a huge concomitant uptick in expenditures on “end of life clinics.”

      Or maybe they’ll be called “final care facilities.”

      Like the famous Roach Motel, you will check in, but you won’t check out.

  • So this bill relies, in part, on taxes on certain health care plans (which will likely be dropped) and on “penalties” on the uninsured (which will prompt them to get insurance). Which means that they’re counting on two sources of revenue that are guaranteed to be unreliable, including one that will increase costs as its revenue stream shrinks.

    And no one in Washington sees this train wreck coming? Really?

  • “More than 150 House Democrats have urged Speaker Nancy Pelosi to quash a new tax on expensive insurance plans.”

    I wonder what that will do for the cost of the bill?

    Okay, really, I don’t wonder all that much about it.

  • Two things:
    1) The Baucus bill isn’t a bill. There is no legislative language. The CBO scored a bunch of concepts bundled up as a plan, and they admit their estimates are hazy as a result.

    2) The plan would actually cost more than $900 billion. The cost of expanding coverage is $829 billion, but there are other provisions that raise the price to $904 billion.

  • The devil is in the details but the progressives have figured a way around that. Instead of seeing what is in the bill, they will pass a resolution affirming the “concepts” of the Baucus bill. This will get 60 votes including the vote of Olympia Snowe. Then Harry will take the concepts into his back room and with the magic and mirrors of Acorn and SEIU, et al., presto a legislative bill comes out and they will pass it using the 51 vote nuclear option. The interesting question is: how hard will it be to rescind the bill in January 2011, refund the monies confiscated from the public, pay the penalties for the falsely imprisoned, and restore the status quo ante? Based upon past government perfomance it is easy to foresee two to three trillion per year in 2020. Then we can all learn chinese.