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Kennedy health plan estimated to cost US$1 trillion

A US Senate panel proposal to expand healthcare coverage would increase the federal deficit by about US$1 trillion over 10 years and still leave millions without insurance, a congressional analysis said yesterday.

The Congressional Budget Office (CBO) said its calculations were preliminary and stressed that the Democratic-sponsored legislation was still being drafted.

But its estimates could fuel opposition to President Barack Obama's drive for healthcare reform, which critics fear would result in an expensive government takeover of the US healthcare system.

There are now an estimated 46 million people in the United States without any health insurance, and devising a way to get them coverage has become a major goal of Obama's presidency.

In a letter to Senator Edward Kennedy, chairman of the Senate's Health, Education, Labor and Pensions Committee and author of the plan, the non-partisan CBO estimated that once the reform plan was fully implemented about 39 million people would get coverage through new insurance exchanges -- a kind of clearinghouse for medical plans.

Individuals and small businesses would be able to shop in the exchanges for policies offered by insurance companies. Obama and fellow Democrats hope that a new, government-run plan would be one of those options.

But the CBO also said the number of people who receive coverage through an employer, currently the main provider for health benefits for most Americans, would fall by about 15 million, or 10 percent. And the number of people covered by government programs would fall about eight million as they move into policies offered through exchanges, the CBO said.


The CBO concluded that under the Kennedy plan, "the net decrease in the number of uninsured people would be about 16 million" -- far short of Obama's goal to provide healthcare coverage to all Americans.

Kennedy spokesman Anthony Coley said in a release: "As the CBO letter indicates, this is an incomplete statement of an incomplete bill. We look forward to a complete CBO estimate of a complete bill."

The CBO analyzed only the provisions of Kennedy's proposal, unveiled just last week. The Senate Finance Committee, however, is charged with finding ways to pay for it and is still developing proposals.

Obama has said any healthcare reform bill that Congress sends him must be fully paid for and not increase the deficit. One revenue-raising proposal being considered would tax some of the health insurance provided to workers by their employers.

While the CBO estimated the US$1 trillion pricetag over 10 years, it cautioned that the impact of a number of provisions remained uncertain.

Meanwhile, the House of Representatives Ways and Means Committee, one of several congressional committees drafting legislation, said its proposal would change the way doctors are reimbursed under the Medicare program for the elderly, something physicians' associations have been pushing for.

The committee said its new formula would dramatically alter the way most doctors are reimbursed and would cost the federal government less than US$300 billion over 10 years.

The doctors' reimbursement issue has been a major concern in the Medicare program, which will play an important role in driving cost savings throughout the the US medical system under the reform plan.


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