(CNSNews.com) – A “preliminary analysis” of the health care bill in the Senate Finance Committee by the Congressional Budget Office (CBO) shows that while the plan would subsidize the purchase of health insurance for people making up to 400 percent of the federal poverty level, the plan would also reduce the federal deficit by $81 billion over 10 years through tax increases, financial penalties, and savings apparently inherent in the plan’s design.
However, the CBO also stated that its preliminary analysis “does not constitute a final cost estimate” because it did not analyze the actual legislative language of the bill.
“The Chairman’s mark, as amended, has not yet been converted into legislative language,” wrote the CBO. “The review of such language could lead to significant changes in the estimates of the proposal’s effects on the federal budget and insurance coverage.”
The gross cost of the “America’s Healthy future Act of 2009,” according to the CBO is $829 billion over 10 years. That’s the figure for credits and subsidies provided through the bill’s proposed health insurance exchanges, as well as increased spending for Medicaid and the Children’s Health Insurance Program.
As for the exchanges, the CBO noted: “The proposal also would establish new insurance exchanges and would subsidize the purchase of health insurance through those exchanges for individuals and families with income between 100 percent and 400 percent of the federal poverty level (FPL).”
The estimated total costs will be partly offset, says the CBO, by “$201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources.” There also would be penalty payments imposed on people who don’t take health insurance, totaling an estimated $4 billion – also, “penalty payments by employers whose workers received subsidies via the exchanges, which would total $23 billion,” reported the CBO.
Overall, the bill would lower the federal budget deficit by $81 billion over the years 2010-2019, according to the CBO.