NCPA - National Center for Policy Analysis


November 30, 2009

Senate Majority Leader Harry Reid's (D-Nev.) 2,074 page health care reform bill depends on budget gimmicks and unrealistic assumptions and projected savings to achieve its $900 billion threshold goal over the 10-year budget window, says the Heritage Foundation. 

In fact, there are four outrageous budget tricks contained in the new bill, says Heritage.

The bill excludes the costly "doctor fix":

  • Senate bill conveniently ignores the over $200 billion price tag associated with stopping the unavoidable cuts to physicians under the Medicare program.
  • The Congressional Budget Office (CBO) estimates that combining the House bill (H.R. 3961) with the "Doctor Fix" bill (H.R. 3962) would actually "add $89 billion to budget deficits over the 2010-2019 period."

The bill manipulates the new CLASS Act:

  • The Senate bill, like the House, also includes a new government health care program for long-term health insurance, the CLASS Act.
  • The CBO points out that the CLASS Act would eventually lead to net outlays when benefits exceed premiums.

Delays costly benefits:

  • The Senate bill is designed to gather revenues (higher taxes, fees, and other offsets) over the full 10-year window but delays paying out the major benefits, like subsidies, until the last six years.
  • So, the 2010-2019 estimate is not a full cost estimate of all provisions fully implemented and will certainly add significantly to the true cost of the bill.

Depends on uncertain cuts to Medicare:

  • The Senate bill depends on using cuts to Medicare to pay for its $1.2 trillion coverage expansion.
  • These cuts include over $118 billion in "savings" resulting from changes to the highly popular Medicare Advantage plans, a move that will directly impact the benefits of millions of seniors.

Source: Nina Owcharenko, "The Senate Health Bill: The True Costs Are Unknown," Heritage Foundation, November 20, 2009.

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