CBO study may fuel health-care debate

The Congressional Budget Office yesterday morning released its evaluation of the new Democratic health-care overhaul bill, expected to provide fodder for all sides in this week's debate.

Lawmakers for weeks eagerly have awaited the scoring by the nonpartisan office as a signpost to the economic cost of the proposed overhaul. With yesterday's announcement by the Democrats that they believe they have the 60 votes needed for passage, the office released its report.

The office painted an upbeat picture of the new plan. The major changes include expanding eligibility for a small-business tax credit; increasing penalties on certain uninsured people; and replacing the so-called public option with "multistate" plans that would be offered under contract with the Office of Personnel Management.

Also included is an increase in the payroll tax on higher-income individuals and families.

According to the budget office's Web posting, 94 percent of Americans younger than 65 would be covered, including 31 million uninsured. About 23 million nonelderly residents, however, still would be uninsured, about one-third of whom are unauthorized immigrants.

The deficit would be reduced by $132 billion in the first decade, which is up by $2 billion from the original Senate bill. In the second decade, the deficit reduction would hit $1.3 trillion.

The almost $900 billion bill would be financed with $483 billion in cuts to Medicare and other federal health programs, as well as tax increases.

Republicans have claimed that the Medicare cuts would hurt seniors and have opposed all tax increases, saying they would impede the economic recovery.

As part of their political compromise, Democrats in the Senate gave up a public option and even had to surrender a compromise plan to win over Sen. Joe Lieberman (I., Conn.).

The budget office explained that the new version of the bill calls on the Office of Personnel Management, the federal government human resources office, to "contract for two national or multistate health insurance plans - one of which would have to be nonprofit - that would be offered through the insurance exchanges."

But it was unclear whether any private insurers would be interested in offering such plans, the budget office noted, "and establishing a nationwide plan comprising only nonprofit insurers might be particularly difficult."