Three Cheers For The WSJ

7 10 2009

anumbers-721046The left must be loving this little piece from the Wall Street Journal. In fact, they must be cheering! Now don’t get me wrong, most of the time the WSJ does an excellent job at reporting the truth. They even have enough smarts to know that it takes more than ‘just the facts’ when writing anything that’s NOT a straight business piece. Seriously, have you ever read their straight business articles? If you are having trouble nodding off to sleep at night, just try reading 3 business pieces in a row.

Anyway, I would expect the WSJ to at least ask some serious questions of the CBO. You know, something like… How do you go from $1.6 Trillion over a 10 year period (whats with this over “ten years” business anyway?) to now under $900 Billion, just enough to say the bill will actually save money”? I’m sorry people, I don’t buy it! And, you would think this common sense question of mine would be asked by the WSJ.

Because there is so much fantasy being played-out with Obamacare, with these numbers just being the latest, I’m seriously starting to wonder what happened at the CBO (Congressional Budget Office). For a supposedly non-partisan outfit, things are looking awfully suspicious. Now I’m left to wonder if the two people that wrote this article got a call from D.C.

Gio- 

New Math Boosts Health Plan

Budget Office Says Senate Bill Will Trim Deficit; Democrats Still Split on Key Details

The latest Senate health bill will cost $829 billion over a decade and slightly reduce the federal budget deficit, congressional budget crunchers said Wednesday, marking a major step forward for Democrats’ plans to overhaul American health care.

The nonpartisan Congressional Budget Office found that the sweeping measure will cover 94% of nonelderly legal U.S. residents, up from about 83% currently. The bill will reduce the deficit by $81 billion over the 10-year period, owing to trims in Medicare spending and new taxes.

The widely awaited report paves the way for the Senate Finance Committee to approve its bill as soon as this week.

After appearing in peril in August, the health overhaul has cleared a series of hurdles in recent weeks that have given Democrats increased confidence they will pass a bill. Lobbyists on both sides of the issue have shifted their focus to what the bill will look like rather than questioning whether a measure can succeed.

But plenty of potential pitfalls remain. Democrats are still divided over core elements of the legislation, including whether to create a public health insurance plan and how to pay for the overhaul. The hospital industry, a key ally, says the latest bill from the Senate doesn’t expand health insurance broadly enough to meet the terms of its pledge to contribute $155 billion to the effort.

According to the budget office, the bill spends $461 billion over a decade to give tax credits to low- and middle-income Americans to offset the cost of buying health insurance. It spends $345 billion to expand the Medicaid insurance program to cover a larger swath of the poor.

The bill, introduced by Senate Finance Committee Chairman Max Baucus, calls for the government to fund a series of new nonprofit health-insurance cooperatives designed to increase competition with private insurance companies. It gives doctors and hospitals incentives to improve the quality of their care and offer fewer unnecessary tests and treatments.

Most of the bill’s funding comes from $404 billion in cuts to Medicare and two other government insurance programs that Democrats say will reduce waste but won’t hurt recipients’ benefits. An additional $201 billion comes from a 40% excise tax on particularly generous health-insurance plans levied on insurers. The rest of the funding comes from annual fees on insurers, medical-device makers and pharmaceutical companies, as well as a series of other changes to the tax treatment of health expenses.

Mr. Baucus, a Montana Democrat, said the report shows that the bill succeeds in lowering the burden that health spending places on the federal budget — one of President Barack Obama’s top objectives. “Health reform should be fiscally responsible as it expands and improves coverage and these numbers reiterate that real reform can be just that,” he said. Dan Pfeiffer, a spokesman for the White House, called the budget office score “another big step forward for enacting health reform.”

While the plan is fully paid for, Republicans cautioned that the price tag is still so high that it will scare off potential supporters. “This partisan Finance Committee proposal will never see the Senate floor since the real bill will be written by Democrat leaders in a closed-to-the-public conference room somewhere in the Capitol,” Senate Republican Leader Mitch McConnell of Kentucky said.

Even some Democrats are weighing whether the measure should be scaled back as the Senate prepares to merge the Finance Committee bill with another version passed by its health committee this summer. Democratic New York Sen. Charles Schumer is pressing for a waiver from the proposed mandate to buy insurance for consumers whose health-insurance costs would exceed roughly 5% of their income, down from 8%. Finance Committee aides calculate that would leave additional millions without coverage. But it would lower the 10-year cost of the bill by $30 billion, and allow Democrats to scale back tax hikes.

In mid-September, the budget office estimated that an earlier version of the Finance Committee’s bill would cost about $774 billion over a decade. The Finance Committee estimated the actual cost of the bill it released around that time at $856 billion over a decade.

In weeks of debate over the bill, the committee made a series of changes that both added and reduced its cost. Democrats, as well as Republican Sen. Olympia Snowe from Maine, a key Republican swing vote, were concerned that the bill forced people who couldn’t afford it to buy insurance.

So the panel cut in half the new penalties on people who don’t carry health insurance and phased them in more gradually. It also narrowed the number of people who would be required to carry health insurance to exempt people who would have to spend more than 8% of their income on insurance, down from 10%. The new version also increased the tax on generous health-insurance plans and raised the annual fee levied on insurers.

Experts expected that the softened individual insurance mandate would mean the bill wouldn’t expand insurance coverage to as many people as the original draft. But two changes offset that. One was that the bill effectively made the tax subsidies to offset the cost of buying insurance more generous, which draws more people into the system. The other was a last-minute change to keep more children of low-income families on a government insurance plan instead of directing them to the new insurance exchange for coverage.

Just how far the bill expands insurance coverage is quickly becoming a flash point. Alissa Fox, a senior vice president at the BlueCross BlueShield Association, said she thinks the budget office’s finding that 94% of U.S. residents will have insurance coverage as of 2019 is too high, based on the insurer’s research. “We absolutely don’t think you would get the kind of private coverage that you’re estimating,” she said.

Write to Janet Adamy at janet.adamy@wsj.com and Jonathan Weisman at jonathan.weisman@wsj.com

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