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That magic number

Posted by: Ella Hushagen on Jul 01, 2009

The Congressional Budget Office (CBO) made headlines recently when it "scored" health reform proposals generated in the Senate. The CBO numbers - and thusly the headlines - weren't favorable, and left many lawmakers and health care advocates scratching their heads.

In just a couple of days in mid-June, the CBO seemed to rain hard on the whole health reform parade when it made back-to-back announcements that (1) the first draft of the Senate Health, Education, Labor and Pensions (HELP) Committee's bill would cost $1 trillion over 10 years and would only cover 16 million people, and that (2) the first draft of the Senate Finance bill would cost $1.6 trillion over 10 years.

So this begs a few questions....

What is the CBO? The CBO provides Congress economic data and analyzes the costs and impacts of legislation.

Are there any issues with CBO scores of health reform proposals? Many health policy wonks complain that the CBO doesn't score savings that may be wrung from the health system at the national level. As Politico reported,

Programs like disease prevention will save money, but the practices are more recent and have not yet been fully incorporated by the conservative CBO, said Ken Thorpe, a professor of health policy at Emory University.

Why do CBO scores matter? While the CBO's analyses are imperfect, they represent our best guess at what will happen if a particular piece of legislation is implemented, and in the era of pay-go (short for "pay as you go"), it's important to get a good score. This recent CBO score debacle demonstrates that, if the numbers come out higher than bill sponsors anticipated, it looks bad. And health reform opponents will make hay of it.

But what's a good score? There is no magic number. As a response to CBO's cost estimate, Senator Baucus has implied that $1 trillion over 10 years is his goal for the final Finance Committee bill.

Advocates need to keep a close watch on this process to ensure that consumers don't get the short end of the stick as lawmakers craft fiscally responsible legislation. Stay tuned for more news on this after the July 4^th recess of Congress.