Kennedy-Dodd 2.0 and the CBO

via: Heritage

Three weeks ago, the Congressional Budget Office (CBO) released a preliminary score of the Kennedy-Dodd health reform bill. CBO estimated that Title I of the draft legislation alone would have added $1 trillion to the federal deficit while only extending coverage to 16 million of the uninsured. The score sent the Senate Health, Education, Labor and Pensions (HELP) committee back to the drawing board.

Although Democrats on the HELP committee pledged to be bipartisan and transparent as they reworked the bill, those promises were broken late last week. While the Senate was out of town and most Americans were preparing for the 4th of July holiday, Democrats on the HELP committee decided to release the second piece of their plan in the wee hours of the night, along with an updated CBO score of the bill.

Now the CBO estimates that Title I of Kennedy-Dodd 2.0 would increase the federal deficit by $597 billion and would cover less than 40 percent of the uninsured. The bill would use $88 billion raised from imposing new taxes on individuals and employers to partially pay for the $723 billion in subsidies delivered through exchanges or gateways.

Like the previous CBO score, the updated score still does not include the effects of the proposed Medicaid expansion up to 150 percent of the federal poverty level (FPL). The CBO estimates that nearly three quarters of the remaining uninsured are below 150 FPL. Perhaps that’s why independent estimates have pegged the cost of similar Medicaid expansions as high as $900 billion.

In a dear-colleague letter, Senators Kennedy and Dodd inaccurately claim that their bill covers 97 percent of Americans at a cost of $597 billion. The bill might cost $597 billion, but then it certainly would not cover that many Americans. Including the proposed Medicaid expansion might improve the coverage impacts, but it could easily increase the cost of the bill to as high as $1.5 trillion. And even then, it’s not yet clear exactly just how many uninsured Americans would–at the end of the day– actually obtain coverage under the plan or what the final cost would be to American taxpayers.

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