KHN Morning Briefing

Summaries of health policy coverage from major news organizations

CMS Study Finds Senate Health Bill Would Increase Costs Less Steeply Than Thought

A report from the Center on Medicare and Medicaid Services finds that the Senate health bill would increase health care spending less steeply than previously thought.

"A top Medicare official found that the final version of the Senate health-care bill may have the effect of expanding coverage to more uninsured people while not increasing overall health-care spending quite as steeply as previously anticipated," The Washington Post reports. "Democrats had nervously anticipated the report, written by Richard S. Foster, the chief actuary for the Center on Medicare and Medicaid Services, or CMS, which administers the two health-care programs. Foster released several studies late last year raising questions about the fiscal impact of the House and Senate bills."

In this most recent report, "Foster found that an additional 34 million U.S. citizens and legal residents would receive health coverage under the revised Senate bill by 2019, compared to the 31 million estimated by the Congressional Budget Office, the nonpartisan agency that conducted the official cost estimate of the Senate bill. … But the CMS report estimated that the final Senate bill would cost $882 billion from 2010 to 2019, slightly more than CBO's cost estimate of $871 billion for the same 10-year period" (Murray, 1/9).

The Associated Press/The Seattle Times: "The study found that health spending, which accounts for about one-sixth of the economy, would increase by less than 1 percent than it otherwise would over the coming decade even with so many more people receiving coverage. Over time, cost-cutting measures could start to reduce the annual increases in health care spending, offering the possibility of substantial savings in the long run. At the same time, however, some of the Senate's Medicare savings could be unrealistic and cause lawmakers to roll them back, according to Medicare's top number crunchers" (Superville, 1/10).

The Hill: "The report supports GOP criticisms that the Democratic health overhaul proposal is flawed because it would cut hundreds of billions from Medicare at a time when its long-term solvency is in question." Foster "raised doubts about whether a significant number of healthcare providers could remain profitable if the proposed Medicare cuts went into effect. 'Providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries),' Foster wrote" (Bolton, 1/9).

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