Why healthcare reform is still alive, despite initial cost estimates

Dire pronouncements aside, the process is just getting started, with legislation at a formative stage and Obama yet to offer his plan.

Charles Dharapak/AP/File
Sen. Mike Enzi, the ranking Republican on the Senate Health, Education, Labor and Pensions Committee, sits among copies of the health care reform bill and its amendments on June 17, before its markup hearing on Capitol Hill in Washington.

Cable news is already asking: “Is President Obama’s healthcare reform dead?”

This comes after Sunday talk show interviews with senators sounding doubtful notes – most sensationally, the statement by GOP Sen. Lindsey Graham of South Carolina calling cost estimates for Democratic plans a “death blow to a government-run healthcare plan.”

Democratic Sen. Dianne Feinstein of California also raised eyebrows Sunday when she said that Mr. Obama may not have enough votes in the Senate to pass healthcare reform – a stunning statement given the Democrats’ large majority.

But the reality, budget experts say, is that healthcare reform is not dead – it’s just getting started. In fact, the White House has not even put out its own health reform proposal yet. The cost estimates that senators have been reacting to are not official. They’re preliminary estimates based on legislation as drafted. And one estimate – the Congressional Budget Office (CBO) scoring of legislation from the Senate Committee on Health, Education, Labor, and Pensions (HELP) chaired by Sen. Edward Kennedy (D) of Massachusetts – is based on just part of the committee’s plan.

The CBO reported that the 10-year cost of that plan would be $1 trillion and add only 16 million people to the ranks of the insured, out of a current uninsured population of 46 million. But the analysis “does not include elements of the plan that would further substantially reduce the number of uninsured,” write Robert Greenstein and Paul Van de Water of the Center on Budget and Policy Priorities.

The other CBO analysis that rang alarm bells was an initial estimated cost of $1.6 trillion over 10 years for the Senate Finance Committee’s preliminary plan. That number came in so high that committee chair Max Baucus (D) of Montana postponed consideration of the plan until July.

The House Democratic health plan unveiled on Friday has no price tag yet.

The problem with assessing the prospects of health reform now is that the discussion is about costs without the benefits, says Stan Collender, a budget expert at Qorvis Communications.

“It’s a little like getting halfway through a renovation of your home, and you’re saying, ‘Why on earth did I start this?’ ” says Mr. Collender. “You’ve got paint and dust everywhere, and you’re eating off a hot-plate in the basement. You’re kind of like that in the legislative process, which is, people are only seeing the cost, they’re not seeing what they’re going to get for it.”

By waiting to put out its own plan, or endorse someone else’s, the Obama administration is keeping its options open while gleaning valuable information on what may or may not fly in a final package. While some Republicans rail against the idea of a government-run insurance plan that would compete against the private insurers, a New York Times/CBS News poll found that 72 percent of the public supports this “public option.” The poll, released Saturday, also found that 57 percent of the public is willing to pay more taxes to insure the uninsured.

The White House has said it can save $622 billion in healthcare costs over 10 years by cutting hospital subsidies for the uninsured and cutting costs in Medicaid and Medicare.

Ultimately, CBO estimates, which loom large in the public-relations battle over reform, are subject to revision. Sen. Christopher Dodd (D) of Connecticut, who is filling in for the ailing Senator Kennedy on the HELP Committee, said Thursday that committee members would meet with CBO officials early this week. The CBO prides itself on being immune to partisan lobbying, but is always open to reassessing its estimates when presented with new information.

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