The House gave final congressional approval Sunday night to a bill with the stated goals of getting 32 million more Americans covered by health insurance, curbing rising medical costs, restricting unpopular insurance practices and raising additional taxes.
After the 219-212 vote on Sunday, House Democrats also passed a “reconciliation” package of amendments that the Senate plans to take up later this week. The reconciliation package is supposed to fix problems that some House Democrats had with the Senate-approved bill. The reconciliation bill would also revamp financial aid for higher education.
The Congressional Budget Office (CBO) estimated that the overall cost of the Democrats’ health care plan would be $938 billion over 10 years. But the CBO projected that this would be more than offset by additional taxes, other revenue and spending cuts. So if everything goes according to the letter of the law, the CBO says federal deficits could drop by $124 billion over the next decade and possibly by much more after that.
Much uncertainty surrounds these estimates, however. (See next article on the importance of cost control efforts.) In addition, $70 billion of the anticipated deficit reduction comes from premiums for a new public long-term care program (the CLASS Act), and that money is already fully committed to cover promised benefits.
Another fiscal question mark: Congress still needs to take up legislation to cancel scheduled cuts in Medicare payments to doctors. This change, which has bipartisan support, could cost taxpayers more than $200 billion over 10 years.
Different parts of the health care reform plan would begin at different times over the next few years. The ones with the largest fiscal impact would: (CBO dollar estimates over 10 years)
- Provide subsidies to help many low- and middle-income people buy insurance. ($464 billion cost)
- Require many businesses to offer employee health insurance plans or pay penalties. ($52 billion offset)
- Require most Americans to buy health insurance or pay penalties. ($17 billion offset)
- Extend Medicaid to cover people with incomes up to 133 percent of the federal poverty level. ($434 billion cost)
- Raise the Medicare tax on high-income individuals and families. ($210 billion offset)
- Eventually tax high-cost health plans that some employers offer, a step that many analysts consider essential to rein in medical costs. ($32 billion offset)
- Increase prescription drug benefits in Medicare. ($43 billion cost)
- Fund pilot programs and demonstration projects that could lead to better value in heath care. ($14 billion cost)
- Create the Independent Payment Advisory Board (IPAB) to monitor health care costs and suggest improvements. ($16 billion offset)
The President plans to sign the health care bill on Tuesday, March 23. At that point, the Senate will take up the reconciliation package. This has the potential to be a long, drawn-out process because the rules regarding reconciliation disallow any provision interpreted by the Senate parliamentarian to be non-budget related. There will be numerous points of order and opportunities for amendment and if any succeed, the package would have to go back to the House for another vote.