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Initial Estimate by CBO Shows Healthcare Plan Adding to Federal Deficit

Congressional Budget Office director Douglas Elmendorf told lawmakers Thursday legislation to expand health care coverage would increase federal healthcare costs "to a significant degree" and...
July 21, 2009

Congressional Budget Office director Douglas Elmendorf told lawmakers Thursday legislation to expand health care coverage would increase federal healthcare costs "to a significant degree" and revenue will need to be found to keep from increasing the deficit.

"According to the assessment by CBO and the congressional Joint Committee on Taxation (JCT), enacting H.R. 3200 (the America's Affordable Health Choices Act of 2009, (as introduced on July 14, 2009) would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period," the CBO states. "That estimate reflects a projected 10-year cost of the bill's insurance coverage provisions of $1.042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those 10 years."
 
At the end of the 10-year period, the one-year figures for 2019 (only) show that "the coverage provisions would add $202 billion to the federal deficit, CBO and JCT estimate. That increase would be partially offset by net cost savings of $50 billion and additional revenues of $86 billion, resulting in a net increase in the deficit of an estimated $65 billion," according to the CBO.

Elmendorf told the panel, "The coverage proposals in this legislation would expand federal spending on health care to a significant degree and in our analysis so far we don't see other provisions in this legislation reducing federal health spending by a corresponding degree."

CBO July 14 Letter Analyzing H.R. 3200

CBO July 17 Letter Further Analyzing H.R. 3200

Congress Warned Reforms Could Hike Health Care Costs 'Significantly'
(Insurance Journal 7/17/09)

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