On Friday, the CBO released new estimates of H.R. 3200's impact on coverage and the federal budget. CBO's estimates allow us to "follow the numbers" to locate the winners and losers.
The biggest winners? People who can't get insurance because they can't afford it or because they are sick. CBO estimates that 97% of Americans would have coverage by 2019. Also, persons eligible for both Medicaid and Medicare, who will benefit from a new prescription rebate program, and beneficiaries who would get expanded prescription drug coverage to cover Part D's infamous "doughnut hole."
Where would most people get coverage? Through employer-based (private) insurance, not the public plan option. Here is CBO's breakdown. By 2019:
- The number of uninsured would drop by 37 million compared to current law (from a projected 54 million uninsured to 17 million uninsured).
- The number of persons covered by their employers would increase by 2 million, from an estimated 162 million to 164 million persons.
- The number of people covered through the health exchange would go from zero to 30 million persons. (Of these, CBO previously estimated that 8 t0 9 million would be in the public plan.)
- The number of people covered by Medicaid and SCHIP would increase by 11 million, from a projected 35 million to 46 million. (This is mainly due to the bill's requirement that Medicaid cover everyone up to 133% of the FPL.)
- The non-group (individual) insurance market would see a decrease of 6 million persons, from a projected 14 million persons to 8 million persons. This is likely due to the fact that the bill requires that all insurers, including those in the individual insurance market, abide by rules relating to acceptance of patients with pre-existing conditions, guaranteed renewability, and modified community rating.
The other winners? Physicians, who would benefit from higher spending at time when most other "providers" will be subjected to payment cuts. The CBO has this to say:
"Provisions that would result in the largest savings include permanent reductions in the annual updates to Medicare's payment rates for most services in the fee-for-service sector (other than physicians' services), yielding budgetary savings of $196 billion over 10 years ... [emphasis added in italics].
The provision that would result in the largest increase in Medicare spending would change payment rates for physicians' services to replace the 21 percent reduction in payment rates scheduled for January 2010, under the existing "sustainable growth rate" formula, with an inflation-based update. In subsequent years, rates would reflect separate updates for "evaluation and management" services and for all other services. CBO estimates that those changes would cost $228 billion over the 2010-2019 period (before taking into account interactions). Including those interactions, the net cost of the changes in physicians' payment rates would total $245 billion." [emphasis added in italics.]
CBO also estimates that Medicare will spend $6.4 billion more on designated services by primary care physicians.
The CBO's estimates could be wrong, since modeling behavior over 10 years is an uncertain science. Still, the "bottom line" is that the bill would provide affordable coverage to almost all Americans. They will get their coverage mostly from employer-based private insurance. No one would be turned down or overcharged because of a pre-existing condition. Physicians will benefit from the hundreds of billions of dollars being spent to end the Medicare SGR cuts, while payments to insurers, hospitals and drug companies would be cut by hundreds of billions of dollars. Primary care doctors would get even more.
Today's question: What is your take on the CBO's report?