CHOOSING THE NATION’S FISCAL FUTURE
BOX 5-12009 Health Care Reform Legislation
As this report went to press, the House of Representatives had passed theAffordable Health Care for America Act, and the Senate had passed the PatientProtection and Affordable Care Act. (For details on the House bill, see Committeefor a Responsible Federal Budget, 2009; Congressional Budget Ofﬁce, 2009d,2009f. For details on the Senate bill, see Congressional Budget Ofﬁce, 2009i,2009j.)In order to expand access to health care, the proposed health care bills would,among other things:
establish an individual mandate for the purchase of health insurance;
create “insurance exchanges” through which individuals would be able,within a subsidized and regulated framework, to choose among plans of-fering differing levels of coverage;
impose coverage requirements on larger employers;
provide tax credits to certain small employers who offer health insurance;and
expand eligibility for Medicaid.Under the two bills, 94-96 percent of the nonelderly U.S. population (who are legalresidents) would have insurance coverage by 2019—an increase in the number ofinsured people of 31-36 million (Congressional Budget Ofﬁce, 2009d, 2009j).The Congressional Budget Ofﬁce (2009d, 2009i) projects that the proposedexpansions in insurance coverage would increase net costs by $614-$891 billionover the next 10 years. That increase would be offset by increases in federalrevenues of $264-$574 billion and a combination of spending changes that wouldsave $427-$483 billion: the result would be a net reduction in federal deﬁcits of$109-$132 billion. The largest savings would come from changes in the MedicareAdvantage payment rates ($118-$170 billion) and reductions in annual updates toMedicare payment rates for most services in the fee-for-service sector other thanphysicians’ services ($186-$228 billion).One or both bills include a number of other measures designed to slow thegrowth of systemwide health care costs: payment reforms to discourage unnec-essary hospital readmissions; pilot programs to help hospitals and physiciansbetter manage and coordinate care (through “accountable care organizations”)and deliver more cost-efﬁcient care (through payment “bundling”); increased pay-ments to primary care providers and the promotion of medical homes designedto coordinate care; funding of new comparative effectiveness research and thedevelopment of new quality measures; measures to encourage greater pricetransparency; and measures to promote preventive services and wellness pro-grams (Committee for a Responsible Federal Budget, 2009:5). According to ananalysis that relies heavily on the Congressional Budget Ofﬁce, the 10-yearsavings associated with these measures in the House bill are quite modest—inthe neighborhood of $5 billion (Committee for a Responsible Federal Budget,2009:5).In the second decade, the Congressional Budget Ofﬁce (2009f, 2009i) expectsthe spending and revenue provisions of the House and Senate bills to slightlyreduce federal budget deﬁcits (relative to those projected under current law), bybetween zero and 0.5 percent of GDP. The effects of the spending provisionsalone would be even more modest.