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Analysis: House Health Care Bill’s Price Tag Tops $1.6 Trillion

How much does the House Democrats’ health care overhaul cost? Is it $1 trillion or $1.6 trillion?

Democrats argue the number should be $1 trillion, a number provided by the Congressional Budget Office for the net cost of the portion of the bill affecting health insurance, and they boasted in press releases that the bill actually creates a $6 billion surplus over the coming decade.

But the gross cost of the bill is much higher, more than $1.6 trillion, according to a Roll Call analysis of the CBO data. And despite more than $800 billion in tax and fee hikes, it actually adds $239 billion to the deficit, according to the CBO.

The $1 trillion figure Democrats want reporters to use leaves out major pieces of the bill — notably a $245 billion provision intended to prevent a scheduled cut to doctors’ pay under Medicare. Democrats have conveniently decided to exempt that provision from their pay-as-you-go budget rule.

That so-called “doctor fix” isn’t particularly controversial, as both Democrats and Republicans agree that the current payment formula is unworkable.

And politically the payments were crucial to getting the support of the American Medical Association, which has had a role in thwarting the Democrats’ dream of universal health care for decades.

But the dollars exit the federal Treasury all the same.

The fight over the score heated up last week, when the Democratic National Committee and left-leaning blogs attacked the Associated Press for reporting a preliminary score of $1.5 trillion.

Democrats, including Speaker Nancy Pelosi (Calif.), also criticized the CBO for failing to score preventive health measures as saving money after CBO Director Douglas Elmendorf testified their bill would increase federal costs for health care.

The battle over the price tag comes as Democrats fear the public will get sticker shock. And a higher number doesn’t help with rank-and-file conservative Democrats who say they face a growing backlash back home to a series of bills that would dramatically expand the role of the federal government, including the “cap-and-trade” energy legislation.

Offsetting the $1.6 trillion cost are more than $800 billion in tax and fee hikes, including a $544 billion tax surcharge on the wealthy, a “play or pay” tax on employers that don’t provide insurance, and a tax on individuals who don’t buy health insurance.

The bill also includes more than $550 billion in cuts from Medicare and Medicaid.

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