Today the nonpartisan Congressional Budget Office confirmed that health care reform will deliver deficit reduction. In its analysis of new reconciliation legislation now being considered by the House of Representatives to amend the Senate-passed legislation, the CBO determined that the is bill fully paid for and will reduce the federal deficit by $130 billion over the next 10 years and $1.2 trillion over the following 10 years.
The upshot: This progressive health care reform package will deliver quality health care at lower costs to our nation, addressing concerns that the skyrocketing trajectory of our country’s health care costs over the next 20 years, if left unchecked, would result in health care spending equal to 28 percent of gross domestic product in 2030, according to the Council of Economic Advisors.
The savings delivered through health reform are profoundly important. They mean significant savings to the federal government and America’s families and businesses, but they could be even more substantial than calculated today by the CBO, which has been consistently conservative about scoring savings from payment and delivery system reform. The Senate legislation promotes innovations in health care provider payments and delivery system reforms, including the bundling of services and the development of accountable care organizations that will encourage payment for the quality of care, not the amount of care per visit to the doctor or per procedure.
Renowned economists expect these reforms to generate significant savings over the long term. CAPAF Senior Fellow David Cutler estimates that additional federal savings could amount to as much as an additional $500 billion over 10 years, while systemwide savings could equal $2 trillion in lower total health expenditures.
In addition, as the legislation expands coverage to most Americans, the impetus for health care providers to shift the costs of caring for the uninsured to the insured will be reduced. According to the CBO, this legislation will enable 32 million people to gain health coverage, which will result in more than 95 percent of Americans holding health insurance, thus reducing pressure on premiums for those who have coverage today.
In addition to these substantial savings, the cost reductions that would result from health care reform could lead to the creation of up to 4 million new jobs over the next 10 years.
Generating these important savings while dramatically expanding health care coverage for millions of Americans is why passing health reform legislation is critical to the fiscal health as well as economic security and well-being of our country, our families, and our businesses as they grow and prosper in the 21st century. Now is the time for the House to lead by passing health care reform legislation that meets our nation’s needs.