CBO: Strong Public Plan Saves $150 Billion

This is some great news from Jonathan Cohn at The New Republic:

According to a pair of Capitol Hill sources, preliminary estimates from the Congressional Budget Office suggest that a strong public option--the kind that the House of Representatives is putting in its reform bill--should net somewhere in the neighborhood of $150 billion in savings over ten years.
I've written previously about how both the Senate HELP Committee bill and the House bill wrote the rules determining the amount of subsidies given to individuals to help them afford insurance was structured so that the Congressional Budget Office would score a strong public plan as saving large amounts of money.

I'm very pleased with these preliminary results from the CBO and they are right in line with my estimates. Last month, I calculated that a strong Medicare buy-in public option would make the HELP bill score between $200-$250 billion cheaper. The House bill has slight less generous subsidies than the previous version of the HELP bill I used to come up with my estimates. I'm also under the impression that the strong public plan scored by the CBO was not paying Medicare rates but Medicare rates plus 5-10%. These two factors should account for most of the difference between my estimate and the preliminary estimate from the CBO.

The only unfortunate piece of news is that my estimate was based on the assumption that the CBO would be unable/unwilling to calculate what effect competition from public option would have on reducing the cost of insurance from private insurance companies. It unfortunately appears that my assumption may have been correct. This mean the CBO is in fact understating the potential savings from a robust public option.

Overall this is all very good news and should greatly increase the chance that health care reform includes a strong public option. It is possible that Peter Orzag and Barack Obama were expecting these results from the CBO this whole time. Their focus on savings may have been part of a trap to trip up the opponents of a robust public plan. Of course, we also need to hope that the CBO doesn't conclude that a strong public plan would end up “dominating” the exchange.

1 comment:

jacksmith said...


It’s official. America and the World are now in a GLOBAL PANDEMIC. A World EPIDEMIC with potential catastrophic consequences for ALL of the American people. The first PANDEMIC in 41 years. And WE THE PEOPLE OF THE UNITED STATES will have to face this PANDEMIC with the 37th worst quality of healthcare in the developed World.


We spend over twice as much of our GDP on healthcare as any other country in the World. And Individual American spend about ten times as much out of pocket on healthcare as any other people in the World. All because of GREED! And the PRIVATE FOR PROFIT healthcare system in America.

And while all this is going on, some members of congress seem mostly concern about how to protect the corporate PROFITS! of our GREED DRIVEN, PRIVATE FOR PROFIT NATIONAL DISGRACE. A PRIVATE FOR PROFIT DISGRACE that is in fact, totally valueless to the public health. And a detriment to national security, public safety, and the public health.

Progressive democrats the Tri-Caucus and others should stand firm in their demand for a robust government-run public option for all Americans, with all of the minimum requirements progressive democrats demanded. If congress can not pass a robust public option with at least 51 votes and all robust minimum requirements, congress should immediately move to scrap healthcare reform and request that President Obama declare a state of NATIONAL HEALTHCARE EMERGENCY! Seizing and replacing all PRIVATE FOR PROFIT health insurance plans with the immediate implementation of National Healthcare for all Americans under the provisions of HR676 (A Single-payer National Healthcare Plan For All).

Coverage can begin immediately through our current medicare system. With immediate expansion through recruitment of displaced workers from the canceled private sector insurance industry. Funding can also begin immediately by substitution of payroll deductions for private insurance plans with payroll deductions for the national healthcare plan. This is what the vast majority of the American people want. And this is what all objective experts unanimously agree would be the best, and most cost effective for the American people and our economy.

In Mexico on average people who received medical care for A-H1N1 (Swine Flu) with in 3 days survived. People who did not receive medical care until 7 days or more died. This has been the same results in the US. But 50 million Americans don’t even have any healthcare coverage. And at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES!

If President Obama has to declare a NATIONAL STATE OF EMERGENCY to rescue the American people from our healthcare crisis, he will need all the sustained support you can give him. STICK WITH HIM! He’s doing a brilliant job.



Join the fight.

Contact congress and your representatives NOW! AND SPREAD THE WORD!

God Bless You



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