CBO: Senate health plan to cost $849 billion

updated 8:37 p.m. ET Nov. 18, 2009

WASHINGTON - Setting up a historic year-end health care debate, Senate Majority Leader Harry Reid unveiled long-awaited legislation Wednesday night to extend coverage to all but 6 percent of eligible Americans and bar private industry from denying insurance because of pre-existing medical conditions.

The Democrat's $849 billion measure is designed to remake the nation's health care system, relying on cuts in future Medicare spending to cover costs — as well as on higher payroll taxes for the well-to-do and a new levy on patients undergoing elective cosmetic surgery.

Aides said the mammoth, 2,074-page bill would reduce deficits by $127 billion over a decade and by as much as $650 billion in the 10 years that follow, citing as-yet-unreleased estimates by the Congressional Budget Office.

"Tonight begins the last leg of this journey," said the Nevada Democrat, less than two weeks after the House approved its version — and nearly 10 months after President Barack Obama's Inauguration Day summons to action.

‘We're closer than ever’
Obama welcomed Reid's action, saying, "Today, thanks to the Senate's hard work, we're closer than ever to enacting solutions to these problems. I look forward to working with the Senate and House to get a finished bill to my desk as soon as possible." There was no mention of Obama's longtime goal of signing legislation by year's end.

The Congressional Budget Office estimated it would cost $849 billion over 10 years, spread coverage to 31 million Americans who currently lack it while still reducing federal deficits by a total of $127 billion in that decade.

An aide said the CBO also estimated that the bill would achieve cuts of $1 trillion over a decade in projected health care costs. The estimate of 94 percent coverage was less than the 96 percent estimated for legislation the House passed earlier this month, but no precise comparisons were possible without as-yet-unreleased CBO documentation.

Republicans vowed a protracted struggle to block the legislation and deny the president a victory that would cap a tumultuous first year in office.

"This bill has been behind closed doors for weeks," said Sen. Mitch McConnell of Kentucky, the Republican leader. "Now, it's America's turn, and this will not be a short debate. Higher premiums, tax increases and Medicare cuts to pay for more government. The American people know that is not reform."

An early showdown on the Senate floor is expected by week's end.

Subsidies for lower incomes
Reid's Senate measure would require most Americans to carry health insurance and would provide hundreds of billions of dollars in subsidies to help those at lower incomes afford it. It also would mandate that large companies to provide coverage to their workers.

Beginning in 2014, it would set up new insurance marketplaces — called exchanges — primarily for those who now have a hard time getting or keeping coverage. Consumers would have the choice of purchasing government sold insurance, an attempt to hold down prices charged by private insurers.

After weeks of secretive drafting, Reid outlined the legislation to rank-and-file Democratic senators at a closed-door meeting. "Everyone was positive," said Sen. Amy Klobuchar, D-Minn.

That didn't mean there weren't problems — far from it. At his news conference, Reid pointedly refrained from saying he had the 60 votes necessary to propel the bill over its first hurdle.

Reid met privately earlier in the day with Sens. Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, moderate Democrats who have expressed concerns about the measure.

Nelson later issued a statement strongly suggesting he would vote with fellow Democrats on an initial showdown expected within days. Aides have said privately that Reid decided to retain an existing antitrust exemption for the insurance industry as a way of satisfying the Nebraskan's concerns.

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