New estimates from Medicare number crunchers say Senate health bill would raise costs slightly

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Report: Slight cost increase in Senate health bill

WASHINGTON — The Senate’s plan to expand health coverage to 34 million more Americans would raise costs slightly, government economic experts said in a report Saturday.

Over time, cost-cutting measures could start to reduce the annual increases in health care spending, offering the possibility of substantial savings in the long run. At the same time, however, some of the Senate’s Medicare savings could be unrealistic and cause lawmakers to roll them back, according to Medicare’s top number crunchers.

The study found that health spending, which accounts for about one-sixth of the economy, would go up by less than 1 percent more than it otherwise would have increased over the coming decade, even with so many more people receiving coverage.

The study found that health spending, which accounts for about one-sixth of the economy, would increase by less than 1 percent than it otherwise would over the coming decade even with so many more people receiving coverage.

Health and Human Services Secretary Kathleen Sebelius said the report shows the Senate bill would slow the rate of health care costs, strengthen Medicare and provide millions more people with insurance coverage.

President Barack Obama used his weekly radio and Internet address Saturday to play up the brighter side of the overhaul he hopes to sign in time for his first State of the Union address to a joint session of Congress in a matter of weeks.

He said it would ban “the worst practices of the insurance industry” even as he acknowledged it would take several years — until 2014 in some instances — for some of the changes to be fully in place. That has disappointed consumers and their advocates.

“Now, it’ll take a few years to fully implement these reforms in a responsible way,” the president said. “But what every American should know is that once I sign health insurance reform into law, there are dozens of protections and benefits that will take effect this year.”

Among them, Obama said:

—People with illnesses or medical conditions will be able to buy affordable health insurance.

—Children with such conditions will no longer be denied coverage.

—Small-business owners who can’t afford to cover their employees will get tax credits to help them do so.

—Insurance companies will be required to offer free preventive care to their customers and will be prohibited from dropping coverage when someone becomes ill.

“In short, once I sign health insurance reform into law, doctors and patients will have more control over their health care decisions and insurance company bureaucrats will have less,” Obama said. “All told, these changes represent the most sweeping reforms and toughest restrictions on insurance companies that this country has ever known.”

House and Senate versions of the overhaul would require nearly all Americans to get coverage and provide subsidies for many who can’t afford the cost, but they differ on the details. Among the remaining sticking points are whom to tax, how many people to cover, how to restrict taxpayer funding for abortion and whether illegal immigrants should be allowed to use their own money to buy coverage in new insurance markets.

Obama had several meetings with Democratic lawmakers at the White House this week to help resolve those differences. In one instance, he signaled to House Democratic leaders that they must drop their opposition to taxing high-end insurance plans to pay to extend coverage to millions of uninsured people. The tax, which is in the Senate bill, is largely opposed by House Democrats and organized labor.

Saturday’s report cited this tax on “Cadillac” health plans, as well as reductions in annual increases to Medicare providers, as having potential to hold down costs. But the authors were skeptical that Congress could stand the political fallout, noting that the Medicare cuts “may be unrealistic.”

At the same time, the proposed 40 percent excise tax on high-cost health plans would hit more and more people over time, virtually guaranteeing lawmakers would feel pressure to ease the tax.

Republican lawmakers, saying the bills cost too much and impose too much government control, are near unanimous in opposing the legislation.

On the Net:

Government’s health overhaul site: www.healthreform.gov/

Medicare actuarial studies: tinyurl.com/y9l6vzg