Health reform study buoys Dems as CBO predicts deficit reduction

NEW YORK After months of hard-edged wrangling in Congress, on the Sunday morning political gab fests, on talk radio, in angry town-hall meetings and in dueling blogs online, the fate of President Obama’s top domestic priority – namely, the overhaul of the nation’s fractured healthcare system and the expansion of health coverage to the uninsured – appeared increasingly threatened. A growing chorus of Beltway insiders and pundits on the left and right were all but declaring health-reform legislation dead in the water for 2009.

Then came this week’s Congressional Budget Office report. In an analysis that left White House officials and congressional Democrats jubilant, the nonpartisan CBO, after combing through the complexities of the health overhaul bill proposed in the Senate Finance Committee, declared that the Baucus plan actually would lower, not raise, the federal deficit.

Considering the multi trillion-dollar size of that debt burden, the savings aren’t much: something around $81 billion, according to the CBO’s 10-year projection, which pegged total costs for the expansion of health coverage and modernization of the healthcare system at $829 billion. But that relatively modest savings prediction was enough to give the President the wiggle room he needed to maintain his claim that reforming the health system wouldn’t add a dime to the federal deficit. And, more importantly, the CBO analysis pumped new life into the increasingly urgent campaign by House and Senate Democrats to pass a health reform bill this year.

The Senate Finance Committee plan calls for increasing health coverage from 83% of legal U.S. residents not already covered by Medicare, to 94% over the next decade. It also would provide subsidies to low-income Americans to help pay for coverage through health insurance “exchanges,” and boost the rolls of Medicaid beneficiaries.

So where do the savings come from? According to the CBO, the Baucus plan to tax high-premium health insurance plans would yield more than $200 billion in savings over the next 10 years. Shifting the way the government pays for healthcare services – by moving from a fee-for-service model that rewards doctors and hospitals for ordering high-cost tests and procedures, to an evidence-based payment model that focuses on disease prevention and successful patient outcomes – would save many billions more, the agency predicted.

The CBO report may have revitalized the health reform campaign in Congress, but it did nothing to mollify Republicans, who are almost unanimously opposed to many of the proposals in both the Senate and House bills. Look for more wrangling in the days ahead, but it’s likely some watered-down version of health overhaul legislation will stagger out of Congress and onto the president’s desk before Congress adjourns this fall.