The New Health Dialogue

The CBO just released a preliminary estimate of the Senate Finance Committee's Chairman's Mark of "America's Health Future Act of 2009." While we must remember that their findings are preliminary -- and the bill is likely to be changed as it goes through committee -- there's some encouraging news.

First, according to the CBO and the Joint Committee on Taxation, this legislation would result in a NET reduction of the federal budget deficit of $49 billion over the next 10 years -- and would continue to reduce the deficit in the following 10 years. It is important to note that this is a net reduction which means that even with the projected net cost of $500 billion to expand insurance, the savings and revenues will more than outweigh those costs.

The net cost includes things like subsidies for low-income people to purchase insurance and tax credits for small employers. The savings and revenues in the bill include: $409 in savings from reforming Medicare and Medicaid and $215 billion for an excise tax on high premium insurance plans.

Additionally, the CBO projects that by 2019, if this plan is enacted, 94% of Americans will have insurance, as employer coverage holds steady and we see increases in people purchasing insurance through the new exchange and taking-up Medicaid or CHIP coverage.

We expect to hear a lot about affordability and subsidy levels etc... as the bill goes through committee and to the floor. The bill will change. But the framework shows that we can -- as President Obama pledged -- expand health care coverage and improve health care without enlarging the deficit. In fact, we can shrink it.