Healthcare Business News

Reform could help reduce deficit, CBO says

By Jennifer Lubell
Posted: August 25, 2010 - 3:15 pm ET

The healthcare reform legislation approved this year has the capacity to reduce the projected budget deficit by $30 billion over the next 10 years, the Congressional Budget Office estimates.

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The CBO enclosed its latest analysis on the deficit impact associated with healthcare reform in an Aug. 24 letter to Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Finance Subcommittee on Healthcare, and to the leadership of the Finance Committee.

Citing findings from its August report on the budget outlook, the CBO estimates that the combined healthcare and revenue provisions of the Patient Protection and Affordable Care Act and the companion reconciliation bill would reduce the projected deficit by $28 billion in 2020. In addition, the education provisions of the reconciliation bill are estimated to reduce the deficit by $2 billion over the same time period.

Certain provisions of the health reform statutes have been estimated to generate savings for the Medicare, Medicaid and Children's Health Insurance Program, as well as offsetting certain costs. If repealed, the CBO estimates that there would be an increase in deficits totaling near $455 billion—based on an original estimate of the net savings of these programs.

The CBO also revised earlier estimates on preventing Medicare reimbursement cuts to doctors to reflect costs through the year 2020. Over the next decade, staving off the effects of Medicare's sustainable growth rate or SGR formula would cost up to $330 billion, according to CBO. The SGR formula has called for payment cuts to doctors for years, with Congress stepping in to stop the reductions. See the CBO letter.



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