The Congressional Budget Office has priced the Senate health care package at $871 billion over 10 years and projected that it would reduce the deficit by $132 billion, positive news for Democrats hoping to pass a bill by Christmas.
President Barack Obama vowed in a nationally televised address in September that health care reform would reduce the deficit and cost less than $900. Majority Leader Harry Reids (D-Nev.) initial health care package carried a price tag of $848 billion; the House-passed version cost more than $1 trillion.
The CBOs projections include Reids managers amendment, which accounts for the final changes to the Senate bill as negotiated with Sen. Ben Nelson (D-Neb.). The moderate Democrat demanded stronger abortion funding restrictions and better treatment for Nebraska under Medicaid.
CBO and [the Joint Committee on Taxation] estimate that, on balance, the direct spending and revenue effects of enacting the Patient Protection and Affordable Care Act incorporating the managers amendment would yield a net reduction in federal deficits of $132 billion over the 2010-2019 period, CBO Director Douglas Elmendorf wrote to Reid in a letter dated Dec. 19.
Elmendorfs letter continues: The estimate includes a projected net cost of $614 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $871 billion in subsidies provided through the exchanges, increased net outlays for Medicaid and the Childrens Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $149 billion in revenues from the excise tax on high-premium insurance plans and $108 billion in net savings from other sources. Over the 20102019 period, the net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $483 billion and other provisions that JCT and CBO estimate would increase federal revenues by $264 billion.
Senate Democrats had been awaiting the CBO score for days, and many said they wouldnt agree to support an end to debate on the final bill without the numbers. Reid unveiled his final package to his Conference on Saturday morning after negotiating a deal with Nelson.