Sen. Gregg Questions Cost of Health Care Reform
GREGG COSTS
New Hampshire Union Leader
Joe Markman
Boston University Washington News Service
10/28/09
WASHINGTON, Oct. 28–Sen. Judd Gregg, R-N.H., has spent much of his time on the Senate floor this month criticizing the official cost estimate of the Senate Finance Committee’s health reform bill.
Gregg has said that Obama administration proposals, particularly health care reform, “swindle our children’s future,” and he called far too low the estimated 10-year, $829 billion cost that the Congressional Budget Office has assigned to the Finance Committee bill.
The fiscal conservative contends that the actual cost of reform will be closer to $2 trillion, and that about $1 trillion of that would be added to the federal deficit.
“If we’re going to do health care reform we should do it in a fiscally responsible way,” Gregg told the Senate on Wednesday.
But some health care experts say Gregg’s numbers may be motivated more by opposition to big government spending and expensive insurance reform than by a quest for accuracy.
“The Congressional Budget Office offers an independent analysis,” said Judy Feder, a senior fellow at the Center for American Progress, a progressive think tank. “Sen. Gregg is an opponent of reform. I’m confident in the CBO.”
She went on to say, “It is my understanding that the CBO has not only found the first decade of health reform legislation adequately funded, but finds that revenues grow faster than spending in the second decade.”
Gregg, in speaking on the Senate floor, described the CBO cost estimates as “Bernie Madoff accounting” and said, “You’d go to jail if you did that in the private sector.”
The $829 billion, 10-year Congressional Budget Office estimate of the Finance Committee bill starts counting costs next year, five years before many of the most expensive benefits would kick in.
Gregg’s estimate of $1.8 trillion over 10 years was put together by minority staff members of the Senate Budget Committee, on which he is the senior Republican. They calculated costs beginning in 2014, when many of those new benefits would start.
Under the CBO estimate, Gregg argues, revenues are counted for five years during which new health care costs, such as tax credits for low-income individuals or families to buy mandated health insurance, would not be included. In short, he says, the estimate includes 10 years of revenue but only five years of costs.
The CBO’s policy is that it does not question nor analyze estimates of others because that is not appropriate work for its analysts. Gregg’s Budget Committee staff is able and entitled to frame the numbers however it likes and is not required to follow the same guidelines as CBO, according to the nonpartisan office.
Some skepticism of the cost-savings measures in the Finance Committee bill is warranted, said Henry Aaron, a health care expert at the Brookings Institution, a nonprofit public policy group.
Aaron said the bill may wrongly assume that annual payments to hospitals and other non-physician Medicare providers would be scaled back from current levels based on an increase in productivity.
“Nobody makes the claim that in the first 10 or 15 years we’re going to completely turn around the trend… that health care spending grows more quickly than income,” Aaron said.
But, he added, “Throwing out a number like $2 trillion does not add to public understanding.”
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