The Public Insurance Plan Is Not Responsible For High CBO Scores

Posted on  

"The Public Insurance Plan Is Not Responsible For High CBO Scores"

Since the Congressional Budget Office (CBO) issued very preliminary cost estimates of the Health, Education, Labor and Pensions (HELP) committee’s health bill and the Senate Finance Committee’s draft legislation, Republicans and some in the media have argued that the somewhat higher-than expected price tags undermine the President’s contention that a new public heath insurance plan would lower health care spending:

Rep. John Bohner (R-OH): The Congressional Budget Office came out with a score on Senator Kennedy’s bill, just part of the score — of the — of his bill, that says that the public option would cost over $1 trillion, and would cause 23 million Americans to lose their private health care coverage, and only 16 million of which would — would be covered under the — the government plan. [CNN, 6/16/2009]

ABC News: The President’s chances for an optional health care plan that would be run by the government may be fading after a Congressional Budget Office report found a Democratic plan in the Senate would cost at least a trillion dollars over the ten years and cover just 1/3 of the uninsured. [ABC News, 6/16/2009]

Sen. Lindsey Graham (R-SC): The CBO estimates were a death blow to a government run health care plan. The finance committee has abandoned that. [This Week, 6/21/2009]

Fortune Magazine’s Nina Easton: And I think the, the big speed bump this week, of course, was that CBO, Congressional Budget Office study that said that the costs of a public plan are going to be well beyond what they expected. [MTP, 6/21/2009]

Watch it:

But both estimates never scored the public option. The HELP Committee’s bill omitted any language about the public plan and, according to reporting by the Health Beat’s Maggie Mahar, the CBO couldn’t “mark up the Senate Finance Committee plan because the Senate Finance Committee plan doesn’t yet exist.” “Yesterday, I spoke to Peter Orszag’s Office of Management and Budget and they confirmed that there are many blank lines in the draft CBO is looking at. What was missing included a public-sector insurance option,” Mahar wrote.

In fact, rather than add to the costs of reform, a robust public option could produce savings that could actually be scored and identified by the CBO as a money-saver. As the New York Times editorialized on Sunday, “A public plan would have lower administrative expenses than private plans, no need to generate big profits, and stronger bargaining power to obtain discounts from providers. That should enable it to charge lower premiums than many private plans.” “It would also shave hundreds of billions of dollars from the amount needed to cover the uninsured — a crucial advantage as Congress scrambles to finance the reform effort,” the NYT concluded.

« »

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.