Health-Care Reform Scores With the CBO


Health-care reformers just got their best break in months: The CBO has released a preliminary score of the health-care bill put forward by Max Baucus, and their analysis claims it's easy on the wallet. According to the CBO, the bill, if enacted exactly as is, will reduce the deficit by $49 billion over the first ten years, and continue to reduce the deficit over the ensuing decade.

For most people, those up-front deficit numbers will be the big takeaway. But I think the key lines come toward the end:

These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare's payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments.

To get the result they did, CBO assumed that cuts in Medicare payment rates, which comprise the bulk of the plan's alleged savings, will actually happen, even though, as the report admits, Congress has been loath to make those cuts in the past. It's true that the Baucus plan, which creates a commission to figure out how to cut Medicare costs, sets up a slightly more robust framework for cost-cutting than currently exists. But that commission still only gets to make recommendations, and Congress still has the power to block them.

But I suspect, however, that such concerns will be dismissed. Despite the CBO's caution that
their "estimates are all subject to substantial uncertainty," the score, and not concerns about assumptions and methodology, will be what people remember.