New Faith in the CBO

I have newfound faith in the non-partisan Congressional Budget Office whose director Douglas Elmendorf told the Senate Budget Committee today that "Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already bleak budget outlook," according to a Washington Post account. The director urged Congress to end or scale back the tax exclusion for employer-sponsored health care coverage. The Wall Street Journal reports that "The CBO assessment quickly reverberated around Capitol Hill, where House and Senate Democratic leaders are struggling to secure votes to advance health legislation before a scheduled break in August."

Details of the 1000+ House bill are emerging. Business Insurance reports that the bill would impose an unspecified tax on insured and self-insured plans to cover the cost of medical research. The tax is projected to raise $375 million annually. The Self Insurance Institute of America promptly protested. Business Insurance further reports that

Several other provisions in the House Democrats’ measure, which is designed to extend coverage to many currently uninsured individuals, would affect benefit plans.

For example, one last-minute addition to the bill would bar flexible spending accounts, health reimbursement arrangements and health savings accounts from being used to reimburse participants for over-the-counter drugs.

Under another provision, employers could extend health care coverage to employees’ same-sex or opposite sex partners without the cost of that coverage being added to employees’ taxable income.

A third late addition would bar employers that sponsor retiree health care plans from cutting benefits to current retirees unless comparable reductions were made for employees.

Apparently the AMA is still willing to play ball with the Democratic leadership. The Wall Street Journal reports that

In a letter delivered to House Ways and Means Chairman Charles Rangel, a New York Democrat, the AMA expressed its "appreciation and support" for the bill, providing a crucial private-sector boost. Among other things, the group welcomed a provision that would put in place a new formula for payments to doctors under Medicare, avoiding deep cuts scheduled to take place next year and in future years.

The AMA's support of House bill is striking because many doctors have expressed concern that a proposed public health-insurance plan to compete with private insurers might hurt their own bottom lines.

Finally, Modern Healthcare reports that the Senate Finance Committee bill may emerge tomorrow. The Committee's chairman Sen. Max Baucus, in contrast to the HELP Committee and the House leadership, has been seeking a bipartisan bill with assistance from Sen. Charles Grassley.