A push to reshape the U.S. healthcare system got a substantial boost last week as federal actuaries said that they would judge an effort to insure all Americans as a revenue generator rather than a new federal tax.
CBO: Not a federal expenditure
Expert says budget report buoys reform optimism
In a seven-page report, the Congressional Budget Office studied a number of coverage proposals now being discussed on Capitol Hill. Ultimately, some of those options could become the framework for legislation that would change how care is delivered and paid for across the country.
In its report, the CBO said that the purchase of health insurance through an open exchange and in a tightly regulated marketthe probable vehicle to emerge from congressional negotiationswould not be considered a federal expenditure. Thats a departure from the reform effort of the early 1990s when the CBO said that such a move would essentially be considered a tax.
Ron Pollack, executive director of reform advocacy group Families USA, lauded the decision, saying that it removes a major hurdle that helped to scuttle past reform efforts.
Its a significant differentiation in terms of how costs are going to be scored from the way it was done in 1993 and 1994, and what the CBO offers in its analysis, from my perspective, is very promising, Pollack said.
Still, the CBO, which ultimately will tally what is certain to be hundreds of provisions included in a reform bill, did not offer an overall price tag on the coverage options it analyzed. Many healthcare experts predict that the cost of reform could exceed $1 trillion over the next 10 years.
But Pollack said that the CBO report releases some of that financial pressure. The newest ruling, he said, obviously makes the fiscal burden of this legislative process a much easier thing to overcome than what we saw in 1993 and 1994, he added.
In repeated statements, Senate Finance Committee Chairman Max Baucus (D-Mont.), who is shouldering a big part of the reform movement, has pinned the success of such an effort on the CBO.
Overall, the CBO found that a tightly regulated insurance market coupled with a requirement for all Americans to hold some level of health insurance would constitute a fundamentally governmental system, essentially allowing the government to count premium costs as part of overall revenue.
While nearly every proposal to reshape the insurance market would have some impact at the federal level, some would do so more than others, the CBO said. Government subsidies to those who cant afford insurance, individual mandates, so-called play-or-pay payments and transactions made within an insurance exchange partnered with a public plan option would all fall under the domain of federal budgetary oversight.
Meanwhile, in scenarios that would keep the insurance market largely private, revenue would almost always sidestep the federal government.
In CBOs views, the key consideration is whether a proposal would be making health insurance an essentially governmental program, tightly controlled by the federal government with little choice available to those who offer and buy health insuranceor whether the system would provide significant flexibility in terms of the types, prices and number of private-sector sellers of insurance available to people, CBO Director Douglas Elmendorf wrote in a blog posting. The formera governmental programbelongs in the federal budget but the lattera largely private-sector systemdoes not.
In the meantime, the report dropped at a time when most lawmakers were in their home districts, hosting talks and discussions on the topic of healthcare reform.
Eyeing what should be a pivotal week on Capitol Hill, as the Senate Health, Education, Labor and Pensions committee readies its portion of a bill, President Barack Obama added his voice to the effort. On May 28, in a conference call with reporters and campaign volunteers, he said that if reform doesnt get done this year, were not going to get it done.
Details of the HELP bill began to trickle out late last week. According to published reports, the bill is expected to include a mandate that every American have insurance and require employers to contribute. The bill is expected to include a public health plan option as well that effectively would allow the government to compete with private insurers.
While the insurance sector has come out in support of expanding coverage to every individual, it has also railed against a government-backed plan, calling it a potential deal-breaker.
Last week in Washington, Aetna Chairman and CEO Ron Williams again reiterated his call for required coverage. I think its the only way that the insurance system really works to make healthcare more affordable, he said.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.