Report: Health bill meets targets

WASHINGTON - Democrats backing the pivotal health-care bill taking shape in the Senate Finance Committee got a boost yesterday from nonpartisan congressional budget analysts, who estimated the proposal would cost $829 billion over 10 years but trim health spending while adding nearly 30 million to the rolls of the insured.

The Congressional Budget Office said the bill, sponsored by Sen. Max Baucus (D., Mont.), would help reduce the overall federal deficit by $81 billion by 2019, as additional spending to expand coverage would be more than offset by cuts and new revenue.

It also projected "continued reductions" in federal red ink in the years beyond.

At the same time, the bill would expand the percentage of Americans with health insurance from 83 percent to 94 percent over the next decade, the CBO estimated.

Baucus, the committee chairman, hailed the estimates within moments of receiving them. "This legislation, I believe, is a smart investment on our federal balance sheet," he said. "It's an even smarter investment for American families, businesses, and our economy."

At the White House, spokesman Reid Cherlin said the analysis "confirms that we can provide stability and security for Americans with insurance and affordable options for uninsured Americans without adding a dime to the deficit and saving money over the long term."

The report to Baucus from CBO Director Douglas Elmendorf stressed that its estimates were preliminary.

It said that by 2019, "the number of nonelderly people who are uninsured would be reduced by about 29 million," through either private insurance or federal programs.

That would leave 25 million uninsured, about a third of them illegal immigrants, who are not eligible for coverage under the bill.

The committee Baucus heads is the fifth and last of the congressional panels to debate health care.

Its version has a middle-of-the-road flavor. It shuns any provision for the government to sell insurance in competition with private industry.

That so-called public option, strongly favored by many Democrats and just as strongly opposed by Republicans, is still alive in House versions of the legislation.

Some labor unions, including the Teamsters and United Auto Workers, yesterday planned to launch an ad campaign opposing the bill unless it included the public option and dropped a proposed tax on health plans.

The Finance panel's bill does not require businesses to offer coverage to their workers, either, although large firms that do not would be required to offset the cost of any government subsidies going to those employees.

The measure would be paid for through tax increases and spending cuts, including savings of hundreds of billions of dollars from Medicare, the federal health-care program for seniors.

The CBO analysis sets the stage for the panel to vote on the proposal later this week or next week, a key step in the Democratic campaign to send President Obama a health-care overhaul bill by the end of the year.

Once the panel votes, Senate Majority Leader Harry Reid (D., Nev.) will combine its bill with a slightly different bill developed by the Senate Health Committee.

Reid, who hopes to bring the combined bill to the Senate floor later this month, is laboring to craft a bill that can win the support of liberal as well as conservative Democrats and gain the 60 votes needed to overcome a possible Republican filibuster.

Democratic leaders in the House also are working to build consensus before bringing their version to the floor. They met privately yesterday to discuss how to structure a public option.

Backers say it will help drive down health-care costs by providing competition to private insurance plans. Opponents say it will decimate private health insurance.

House Democrats are trying to keep the cost of their legislation, as calculated by the Congressional Budget Office, below $900 billion over the next decade, a benchmark set by Obama in his speech last month to a joint session of Congress.

While generally positive about the impact of the Senate panel's proposal, the CBO report contained important caveats. One noted that the estimate does not include the cost of proposed payment increases for doctors serving Medicare patients, roughly $200 billion through 2019.

Beginning in 2013, the measure would require Americans to purchase insurance and would set up a marketplace for policies. Failure to buy insurance would lead to penalties. Lower-income families would be subsidized.

The Finance Committee's proposed alternative to government-sold health care - nonprofit co-ops that would compete with private companies - was judged largely ineffective by the budget officials.

The legislation also would ban insurance-industry practices that deny coverage on the basis of preexisting medical conditions and restrict companies' ability to charge vastly higher premiums on the basis of factors such as age and gender.

House Republicans criticized the proposal to trim spending on Medicare by $500 billion over a decade.

Rep. Roy Blunt (R., Mo.) said the effect would be to "put Medicare in jeopardy to put money into a new program" of health care.