CBO Says Baucus Health-Care Plan Will Reduce Deficit If Executed as Planned, Which Probably Won't Happen

After a brief delay, the CBO has released its revised score of the Senate Finance Committee bill, and its projections are good news for liberal reformers. The big takeaways: The bill would reduce the deficit by $81 billion over ten years, an increase from the $49 billion in projected savings in the previous score. The bill would also cover 94 percent of legal residents in the U.S.,  which, according to the CBO's estimates, would leave "about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants)."

This is a big win for Baucus and other reform supporters, but, as with the last score, it comes with some caveats. The CBO cautions that its projections are uncertain and subject to change if legislation isn't followed to the letter -- which, in the case of the Medicare cuts designed to pay for much of the bill's tab and produce the bulk of its savings, is highly likely. Greg Mankiw's translation of the previous score's concluding cautions still applies: "In other words, the plan would reduce the deficit if it were carried out as written, but there is good reason based on historical experience to be skeptical that it would be." On the other hand, there's also good reason to believe that, regardless of precedent, what the CBO says goes. So when the CBO says a bill will bring down the deficit, everyone in Congress ends up acting as if that's true.

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  • P Brooks||

    If pigs had wings, they'd be eagles.

  • Fist of Etiquette||

    Well, fudge.

  • ||

    What's with the "unauthorized immigrants" euphemism?

    And, since they were claiming that there were, what 47 million uninsured (that was the number cited, right?), and this bill leaves 25 million uninsured, they're spending $800 billion without doing anything for over half the uninsured? Do I have that right?

    Somehow, $800 billion in direct costs over ten years to extend coverage to 22 million people doesn't sound like such a great deal to me.

  • Kevin||

    That kind of talk will get you labeled as a "naysayer" or a member of "the party of NO". Just think about how many people will be prevented from losing their insurance! And aren't people's lives worth ANY amount of money we spend? (So long as it's YOURS?)

  • andy h.||

    Well if you divide $829 billion by 29 million people you get about $28,600 per person. Divide that by 6 (most of the new coverage kicks in 2014-2019) and you get about $4,800 per person per year. That's right about what the average single-person policy costs right now. Those are obviously rough numbers, but it doesn't sound like such a bad deal, especially when you throw in portable coverage, no recissions, no pre-existing conditions etc.

  • Jim Lindeman||

    Am I right that what would happen here is that they plan to tax the insurance of some people (against their will) to provide mandated coverage to others (against their will) yeah, that is right, if those people believed they really needed healthcare they would have bought it just like everyone else.

  • andy h.||

    This is really pretty simple.

    (1) When a large group of people doesn't have health insurance, for whatever reason, that costs those of us who do have insurance money (more money than if they did have coverage). That's the rationale for mandates.

    (2) It's wrong that in a rich country like this people die prematurely and/or have diminished quality of life because they can't afford to see a doctor. That's the rationale for subsidies.

  • ||

    In a free country, it's wrong for the government to mandate you purchase anything simply because you exist.

    I'm not sure what a rich country is, being the money the country get comes mostly from the citizenry. If we are a rich country, I say we should cut taxes back to be a middle income country.

    A country may have many rich citizens, that doesn't make the country rich. The citizens money is not the country's money.

  • andy h.||

    Let me put it this way. We're a rich & humane enough country (I hope!) that if you get seriously ill or seriously injured, don't have insurance, and can't afford to pay for treatment, we're not just going to let you die. Health care is pretty much unique that way.

    So if you choose not to have insurance you're imposing that liability on the rest of us whether you realize it or not. In the long run that costs us (i.e. taxpayers and insurance premium payers) more than if we just force you to carry insurance.

    The only way to make your position consistent is to say that we should let people die if they can't afford to see a doctor. I for one hope we're not there yet.

  • ||

    And his position cannot be consistent because our country will never let people die because they can't afford to have insurance.We are not a country of "laisse faire" I really don't know what the prediction will be. The bill has been voted and we all wish the best for the country.

  • ||

    If enacted this will increase deficits (spending) by at least a 100 billion a year.

    Anyone want to bet against me?

  • Rich||

    Nope. Not even if you adjust for deflation.

  • ||

    I'll take that bet.

    Its too low of an estimate.

  • ||

    I said at least. That's ≥ for you mathematically inclined folks.

  • ||

    I think the faliure to reduce the deficit will be obvious when the penalties for no insurance is cut out of the bill, or ruled unconstitutional.

    Call me naive, but I don't believe the citizenry wants to mandate health insurance.

  • Shannon Love||

    It might be amusing to try and get some congress critters to put their money where their mouth is and make substantial bets on the financial consequences of their legislation. For example, we could ask them to bet something like $100,000 of their personal money that the cost of program X would only be Y, Z years down the road.

    It certainly doesn't help that the CBO figures, which usually are the best, are nevertheless correct only slightly better than chance. Given that every medical and every social welfare programs cost have exploded far and above supporters initial estimates, I think we can safely say the current predictions are nonsense. In the real world, a single court case or a minor amendment months or years down the road could set off a chain reaction that will cause cost to spiral out of control.

    Congress critters know this and that is why they will never take the bet.

  • smartass sob||

    In the real world, a single court case or a minor amendment months or years down the road could set off a chain reaction that will cause cost to spiral out of control.

    Yeah, but by then the whole thing will have been passed, and believe me - we will never be able to get rid of it, anymore than we can rid the country of the Social Security program. The supporters of this crap know it, too - in fact, they're probably counting on it.

  • Congress||

    Now all we need is someone who'll vote for this piece of s--t and we'll be all set.

  • Rich||

    With all due respect, how good is CBO's prediction record?

    CBO's own evaluations (e.g., here) are full of disclaimers like this: "In any case, the statistics presented here should not be construed as reliable indicators of the future quality of any of the forecasters."

  • ||

    the future quality of any of the forecasters

    Does it actually say that, or was just that a hilariously accurate mistake?

  • ||

    Dammit! Now I'm depressed. They've opened the gate for the jackasses....

  • ||

    Don't forget that another large portion of funding for this monstrosity is a tax on "cadillac" insurance plans. These plans are almost exclusively the province of union members, so, I'm sure this provision of the legislation will remain intact.

  • Gilbert Martin||

    "So when the CBO says a bill will bring down the deficit, everyone in Congress ends up acting as if that's true."

    And no doubt they would continue to maintain that even if the abysmal track record of the CBO in projecting previously enacted entitlement program costs (i.e Medicare) is pointed out to them.

  • ||

    Errr, that should be e.g. vice i.e.

    Sorry. I'll shut up now.

  • iamse7en||

    Yeah, and Medicare will only cost $12 billion by 1990.

  • ||

    I don't know where everyone is getting this "CBO was wrong on Medicare" thing, but CBO didn't exist when Medicare was passed. CBO was created in the mid-70's. Medicare passed in 1965.

  • ||

    If it was, one would have to consider any changes made to the bill after the CBO reported. If so, which is very likely, then the CBO wouldn't be wrong because the law didn't match the bill they analyized.

    I'm still not a fan of these threads.

  • Jim Lindeman||

    If cutting the deficit by 81 billion is so good, how much better it would be to cut it by 829 billion by just not passing the plan. These plans are not "paid for" by tax money, they are paid by borrowing--look at the budget, there is not enough revenue to pay for the healthcare we already have. Does it feel better that a government that plans to steal a trillion a year from you decides to reduce that by 8 billion? And none of this solves the real problem that buying healthcare is like ordering from a menu with no prices on it. Look at the American Association of Physicians and Surgeons who did the Million Med March. They want you to order healthcare from your doctor where you know the price of each side dish and can get what you want not what your uncle sam wants you to have. That is what is going to bend the price curve. And cost us nothing!

  • andy h.||

    The plan is paid for by the taxes & fees that are built into it, not borrowing. That's why it reduces the deficit. And with costs going up at twice the rate of inflation the status quo will cost us a lot more in the long run. Plus a lot of people will die avoidable deaths in the meantime.

    I agree with you about fee-for-service, and with everyone that the CBO numbers should be taken with a grain of salt. But like it or not they're the best numbers we have.

  • ||

    Of course, not even a Senator is stupid enough to believe that the real numbers will be anywhere close to as good as the CBO score.

    The sole purpose of the CBO study is to give cover for Republicans breaking ranks to vote for this. And it will happen, absent another explosion of outrage from the governed.

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