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Why Health-Care Reform Begins in 2013

Most of the major provisions in the House's health-care reform bill begin in 2013. That's a bit of a lengthy ramp-up period, but these things happen. Jon Cohn, however, makes a point I haven't heard before: The Congressional Budget Office scores bills across a 10-year budget window. And, even more arbitrarily, we seem to have decided that the final bill will cost $1 trillion over that period.

The slow start is a way of holding down costs in the 10-year budget window. If the bill begins in 2010, but the subsidies don't kick in until 2013, then that's three years that are under the budget but aren't costing much money. That means the new health-care system can really cost an average of $140 billion each year, as opposed to $100 billion, and that means you can afford a better system.

On the other hand, that means you have some pain happening before you see significant benefits. That strategy has backfired before, in the Medicare Catastrophic episode of 1988. But given that the pain is concentrated among a small slice of the wealthy, and given that you will have some insurance regulations and so forth going into effect immediately, it doesn't seem like a huge deal.

By Ezra Klein  |  July 14, 2009; 5:32 PM ET
 
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Comments

This is one of those you got to be kidding me moments. If there are more uninsured by the 2010 and 2012 elections it will be a political disaster.

http://jwalkerreport.blogspot.com/2009/07/reform-results-in-more-uninsured-by.html

Posted by: JonWa | July 14, 2009 5:57 PM | Report abuse

"...it doesn't seem like a huge deal."

Obviously YOU are healthy and have insurance. There are a whole lot of us out here who are not in that category. We think it IS a huge deal to have to wait for another three or four years.

Posted by: adagio847 | July 14, 2009 9:18 PM | Report abuse

There's potentially a talking point in here about a slow ramp up. It gets us started with the outlines of reform, so everyone gets to prepare but also lets us incorporate any new ideas on say cost cutting that come about. The Chicago Tribune for instance used the "let's slow down and do it right" line yesterday and this seems like a potential counter to that.

I should object to using scoring in this way where you use 10 years of revenue for 8 years of program. At some point, the new entitlement exists and you really should balance program and revenue per year. It's not like there really is a lock box.

JonWa: is the claim that transition effects make the uninsured problem worse between now and 2013 or that the current trends just continue until 2013 with say 1 million losing insurance per year.

Posted by: windshouter | July 14, 2009 11:12 PM | Report abuse

THIS IS IT!

The healthcare reform bill released by the House Of Representatives is an excellent bill as I understand it. It is carefully written, and thoughtfully constructed, informed, prudent and wise.

This is the type of bill that all Americans can feel good about. And this is the type of bill that has the potential to dramatically improve the quality of healthcare for all Americans. Rich, middle class and poor a like. Democrats, Republicans, Independents, and all other party affiliations. This bill has the potential to dramatically improve the quality of life of every American.

The house healthcare bill should be viewed as the minimum GOLD STANDARD by which all other proposed healthcare legislation should be judged. All supporters of true high quality healthcare reform should now place all your support behind this healthcare reform bill released by the United States House Of Representatives, as the minimum Gold standard for healthcare reform in America.

You should all now support this bill with all your might, and all of your unrelenting tenacity. This healthcare bill is a VERY, VERY GOOD! bill for all of the American people. Fight tooth, and nail for every bit of this bill if you have too. Be aggressive, creative, and relentless for this bill.

AND FIGHT!! like your life and the lives of your loved ones depends on it. BECAUSE IT DOES!

SPREAD THE WORD

(http://www.youtube.com/watch?v=RSM8t_cLZgk&feature=player_embedded)

God Bless You

Jack Smith — Working Class

Posted by: JackSmith1 | July 14, 2009 11:13 PM | Report abuse

Man, people are *really* complaining about 2013. When asked where to find the revenue, they basically say, from the same place you got the revenue for the Iraq war, Medicare part D, the Bush tax cuts, TARP, the AIG bailout & the stimulus.

It's hard for me to disagree with this, especially since there's an objective need for more stimulus at least for the next 2 years, probably for the next 3. There's such a thing as being too scrupulous, and in the name of PAYGO, Dems seem to be giving Republicans a gratuitous free gift for the 2010 and perhaps 2012 elections.

"Never let your sense of morals prevent you from doing what is right" - Salvor Hardin

And if Dems still want to be super-pristine about PAYGO, there are places where they can find the revenue for health care in 2010: A Tobin or financial transactions tax; the non-profit deductability thingy; replacing the Bush tax cuts with a "health care" tax cut (uninsured get money to buy insurance, already insured get a tax cut comparable to Bush tax cut); etc.

Posted by: roublen | July 15, 2009 5:55 AM | Report abuse

windshouter, I'm using the CBO's own scoring. Which says right in the report that there will be 1-2 million more uninsured in 2012.

Posted by: JonWa | July 15, 2009 6:16 AM | Report abuse

The point of 2013 is that it will be after the next presidential election. The political pain that the administration wants to postpone will occur when private employers begin cancelling their coverage to put their employees on the public plan.

Posted by: tomtildrum | July 15, 2009 10:33 AM | Report abuse

The federal government needs until 2013 to ramp up the huge, cumbersome and expensive bureaucracy to support the public plan. (Not to mention that time will be needed to permit the states to ramp up duplicative state-based Exchanges.) Gosh, this will create lots and lots of jobs! It's good for the economy! Can you say stimulus?

Also, the federal government needs a long timeline to issue numerous, lengthy regulations to implement redundant protections and provisions that the states have had in force for years and years. But that's not wasteful of tax dollars, is it?

Also, the tax on high income individuals takes effect beginning in 2011, so the feds need a couple of years to raise revenue to pay for this bloated creature.

Posted by: Policywonk14 | July 15, 2009 12:19 PM | Report abuse

The best way to analyze this issue is to ask the following question:

What would this program cost today if all of it's provisions both revenue and outlays where as they will be in 2020?


That will give you an idea of how much the annual cost will be when things are fully phased it.

Posted by: cautious | July 16, 2009 4:39 AM | Report abuse

I agree completely with tomtildrum. The Dems want to be sure Obama (whom I supported) is re-elected in 2012. Because otherwise we will be told there would be a chance of a veto of this bill.

Chump change - again.

Posted by: MaryinSeattle | July 17, 2009 5:45 PM | Report abuse

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