On July 2, 2009, the Senate HELP Committee released a revised health care reform bill called the Affordable Health Choices Act (the “Act”). In response to the release, the Congressional Budget Office (“CBO”) and the staff of the Joint Committee on Taxation (“JCT”) completed a preliminary analysis of Title I of the draft Act, providing comments to Senator Edward Kennedy.
In reviewing the Act, the CBO noted that it would, among other things: (1) require that all legal residents have health insurance or face IRS imposed penalties, (2) establish insurance exchanges through which individuals and families could purchase insurance coverage, (3) set certain minimum requirements regarding pricing and availability (4) provide federal subsidies to reduce the cost of coverage for some enrollees, and (5) require employers with more than 25 workers to “play or pay.” If an employer did not offer health insurance and contribute at least 60% of the premium, it would have to pay a penalty equal to $750 per full-time worker and $375 per part-time worker. According to the CBO’s preliminary assessment, the revised plan would result in a net increase in the federal budget deficits of $597 billion over the 2010-2019 period.
Once the legislation is fully implemented, the CBO and JCT estimate that 20 million fewer people would be uninsured. Importantly, the CBO indicates that the figures presented in its analysis are not a “formal” or “complete” analysis of all effects. Specifically, the CBO notes that its analysis does not include the estimated administrative cost to the government in implementing the program, the cost of establishing and operating the insurance exchanges, or the likely effects on spending for other government programs.
As the health reform debate continues, we will continue to provide timely information.