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CBO: New Health Bill Harder On Medicare Advantage

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WASHINGTON BUREAU — The Congressional Budget Office says the big new health bill, the Reconciliation Act of 2010, would cost $940 billion over 10 years.

The House could vote on the health bill, H.R. 4872, as early as Sunday.

A copy of H.R. 4872, the Reconciliation Act of 2010, is available here.

A copy of the CBO analysis of H.R. 4872 is available here.

CBO analysts are predicting that the new bill would reduce the number of uninsured Americans by 32 million over 10 years.

The bill is less expensive than the bill the Senate passed in December 2009, which came with a $875 billion CBO price tag, but less than the bill the House passed in November 2009, which weighed in at $1.05 trillion.

H.R. 4872 could reduce future federal deficits by $138 billion, because the cost of the bill would be more than offset by revenue from new taxes and fees and by reductions in government spending, CBO analysts write.

The new bill would reduce revenue from a proposed excise tax on “Cadillac plans,” to $32 billion over 10 years, compared to $150 billion in the bill passed by the Senate. It would do so by delaying implementation of the Senate’s tax on high-cost insurance policies until 2018.

But the new bill would slash support for Medicare Advantage plans by $132 billion over 10 years. The Medicare Advantage cuts are harsher than the cuts proposed in earlier bills.

“Cuts of this magnitude will put at risk the entire Medicare Advantage program that more than 10 million seniors rely on today,” says Robert Zirkelbach, spokesman for America’s Health Insurance Plans, Washington.

“Seniors in Medicare Advantage will face higher premiums, reduced benefits, and millions will lose their coverage altogether,” Zirkelbach says. “This breaks the promise that those who like their coverage can keep it.”

The bill does include about $20 billion in additional spending to close the Medicare prescription drug coverage feature known as the “doughnut hole,” or the gap between the point at which routine drug coverage ends and coverage for catastrophic prescriptions costs begins.

CBO analysts note that, because of other changes in Medicare spending provisions, the new bill would yield less in the way of Medicare savings than the health bills passed in late 2009.

Earlier, though, CBO analysts had questioned whether Congress would have really let the harsher Medicare spending provisions take effect.

H.R. 4872 would set up a commission, the Independent Payment Advisory Board, to come up with ways to cut on Medicare spending.

CBO analysts now estimate the savings from this idea would be about $13 billion over 10 years. The analysts earlier had estimated the an advisory board provision in the Senate-passed bill might save $28 billion.

Senate Majority Leader Harry Reid, D-Nev., welcomed the CBO analysis and the formal introduction of the bill.

“All Americans want access to quality, affordable health care, and the bill that the House introduced today moves us another important step closer to that reality,” Reid says in a statement.

Rep. Steny Hoyer, D-Md., the House majority leader, says H.R. 4872 is “the largest deficit-reduction bill that members will have a chance to vote on” in most of their congressional careers.

House Minority Leader John Boehner, R-Ohio, says his party’s legislators will “do everything that we can do to make sure this bill never, ever, ever passes.”

In related news, President Obama says he will delay a trip to Asia until June so he can be around to support the health bill.



If you are interested in work on health bills in ancient times — i.e., before Sen. Scott Brown, R-Mass., took his seat in the Senate — please see Industry Groups On Health Bill: Think Of The Cost and Senate Health Bill Amendment Hard On Doctors, Tanning Centers.


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