The overall cost of the Senate health reform bill would largely be offset by cuts to Medicare and Medicaid, but the bill also could force more providers to end participation in the federal programs, according to CMS actuaries.
According to a new report, the Senate's health reform package, which passed along party lines on Dec. 24, will cost $882 billion over a 10-year budget window. The lion's share of the cost will come from initiatives to greatly expand health insurance to some 34 million more Americans, the actuaries predict.
But the price tag would largely be partially offset by about $541 billion in cuts to Medicare and another $27 billion by Medicaid, they conclude.
Both the coverage amount in terms of dollars and the number of people expected to buy some level of health insurance are higher than previous estimates from the Congressional Budget Office, but could shift yet again as the Senate and House meld their reform bills together.
The CMS also predicts that the Senate bill would increase national health expenditures by $222 billion over the next decade, primarily because of greater utilization by the newly insured coupled with lower reimbursement.
Even with the boost in health spending, some providers could see themselves becoming unprofitable. A measure in the bill aimed at making doctors and hospitals become more efficient could instead drive a number of them out of the Medicare program, “possibly jeopardizing access to care for beneficiaries,” the CMS stated.
Under simulations, the CMS predicted that roughly 20% of Part A providers who greatly rely on Medicare could become unprofitable over the 10-year projection window. The estimate is in line with previous CMS predictions.
The report boosts a Senate plan to tax high-value health insurance coverage, known as “Cadillac” plans. The CMS sees a “moderate” impact on the overall growth of expenditures for employer-sponsored insurance.
The tax, however, has proven a political hot potato, with the White House pushing the measure even while House leaders want it removed.
Of the newly insured, the CMS expects a little more than half, roughly 18 million, to benefit from an expansion to Medicaid that allows individuals making up to 133% of the federal poverty level to enroll in the federal-state program. Another 21 million would purchase insurance through a newly created marketplace known as an exchange.
Still, the Senate legislation would leave about 23 million people living in the U.S. uninsured, about 5 million of whom are here illegally, the actuaries predict.
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