Saturday, October 31, 2009

CBO Attempts To Remove Itself From Health Care Debate: Says It Did Not Evaluate Proposals' Effects On National Health Cost Curve

The Congressional Budget Office (CBO) is trying to broaden the Congressional, public and media criteria for evaluating health care reform legislation. Additionally, it appears to be trying to extricate itself as the sole arbiter of health care reform and CBO explicitly stated that it did not evaluate whether proposed health care reform legislation would bend US national health care cost curve up or down.

CBO is trying to make Congress and the public aware that there are cost considerations outside of the federal budget impact of health reform and that there are also qualitative considerations for evaluating the proposed health care legislation.

It released a letter it sent to US Senate Finance Committee Chairman Baucus indicating that there are many ways to measure the impact of health care reform.

The letter states:
Current proposals to reform the health care and health insurance systems would affect the federal budget and the nation’s spending for health care in many ways, and those effects can be summarized using a variety of different measures. This letter aims to clarify the measures being used by the Congressional Budget Office (CBO) in its analysis of such proposals—in particular, the effects of proposals on federal budget deficits and on the magnitude of the federal budgetary commitment to health care.
CBO also states in the Baucus letter that budget effects are only some of the considerations:
The effects of health care reform proposals on the federal budget and national spending for health care are only some of the criteria that might be used in evaluating such proposals. Their impact on the market for health insurance, sources of insurance coverage, the cost of insurance before and after accounting for subsidies, the number of people with health insurance, the organization and delivery of health care, the quality and cost-effectiveness of health care, and many other factors are likely to weigh on policymakers as they make decisions about proposals. Although CBO has analyzed a number of those issues, this letter—in response to questions the agency has received—addresses only the impact on the federal budget.
CBO also mentioned that when it analyzes federal budget impacts of health reform, it does not consider the impact on total national health expenditures.
Major proposals to reform health care would affect not only the federal budget but also spending for health care by individuals, firms, and other levels of government. A broad measure encompassing those effects would be the impact on total national health expenditures. However, CBO does not analyze NHE as closely as it does the federal budget, and at this point CBO has not assessed the net effect of health care reform proposals on those expenditures, either within the 10-year budget window or for the subsequent decade. That is, CBO has not evaluated whether reform proposals would lower or raise—or bend down or up—the “curve” of national health expenditures.

Finally, the question of what impact proposals might have on health insurance premiums is also of considerable interest. CBO intends to address that issue in the near future.
CBO recognizes, without explicitly mentioning, that states and individual expense for medical care and health insurance were not considered in its federal budget impact evaluation of health reform legislation. Read the complete CBO letter here.


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