Health care plan cuts deficit, CBO concludes

WASHINGTON — Democratic health care efforts got an important boost Thursday as the nonpartisan Congressional Budget Office reported that the $940 billion health care package could reduce federal deficits $130 billion over the next 10 years. The preliminary CBO analysis had been stalled for nearly a week, as Democrats scrambled to change their health care plan so that its cost remained under $1 trillion and deficits could be cut. The legislation is expected to be formally unveiled later today. A vote is expected no sooner than Sunday, the day President Barack Obama is scheduled to leave on an overseas trip. While all the details aren’t yet out, the Democratic plan makes at least three major changes from the versions that the House of Representatives and Senate passed last year. It would end the Medicare prescription-drug coverage gap, in which Medicare now stops paying for prescriptions each year once the government and the consumer have spent $2,830 on them. The benefit then resumes once annual out-of-pocket spending reaches $4,550.The bill would close that so-called “doughnut hole.” It would provide help for lower- and middle-income families, and expand coverage to about 32 million uninsured, meaning that about 95 percent of all Americans would be covered. It also would help states pay the cost of Medicaid, the state-federal health insurance program for lower-income people. The bill will contain many provisions that have broad support. Among them: Insurers couldn’t deny coverage to anyone because of pre-existing conditions, and there could be no lifetime limits on coverage. It’s also expected to extend Medicare’s solvency by nine years; Medicare’s fund that pays hospital benefits is expected to be exhausted by 2017. The bill aims to reduce Medicare spending by 1.4 percentage points a year. The sketchy details were no surprise, and are unlikely to trigger a new wave of instant support for the bill. House leaders are still seriously discussing a two-step process for consideration. First, the House would vote on the rules governing debate, rules that deem the Senate legislation, which many House Democrats dislike, as having passed. If that plan is approved, the House then would consider the changes in a second bill, called reconciliation. Both bills would need 216 votes to pass. Democrats control 253 House seats, and in the last major House health care vote, in November, 39 Democrats voted no. So far, only Rep. Dennis Kucinich, D-Ohio, has announced that he’ll switch.