The CBO Tells People to Calm Down About the Public Plan
Jon Cohn reports that preliminary Congressional Budget Office estimates suggest that a "strong" public insurance option would save $150 billion over 10 years. His sources think the CBO will find the same thing when they score the House health-care reform bill. If so, that would be good news for supporters of the public-insurance option.
It's important to remember, though, that this really is preliminary. As I understand it, this is an expected score of the public option on its own. The final score will go up or down depending on the interactions between the public option and other elements of the final bill. If the Health Insurance Exchange is open to only the uninsured and small businesses, for instance, then fewer people will have access to the public option, and so there will be less savings. Conversely, if the exchange is large, and dominated by the public option, then CBO might decide to put all dollars spent in the exchange on the federal budget. That could increase the "cost" of health-care reform by trillions of dollars, making it look like the public insurance option is expensive, even as it's actually saving $150 billion. Thus does budgetary accounting rule our world.
If the $150 billion estimate is accurate, however, it's interesting proof of another point: the public insurance option is not the End of Days for private health insurers nor eternal salvation for consumers. Saving $150 billion over 10 years is saving $15 billion a year. On Wednesday, the hospitals voluntarily agreed to provide $155 billion in savings from reduced Medicare reimbursements. No one thought that a particularly big deal. It was probably a good thing, but it wasn't proof of final success or ultimate failure for health-care reform.
So too with the public plan. Conservatives saying that a policy that will save $15 billion a year will end American health care -- or, as Rep. Paul Broun would have it, "kill people" -- have jumped off the deep end. Liberals who have invested all their hopes in the public plan might also be a bit disappointed. The CBO score seems to imply the likeliest of all possible outcomes: The addition of a public insurance option is a good, but modest, change to the health-care system.
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