Congressional Budget Office | Cost Estimate of Reconciliation Bill

March 18, 2010

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary estimate of the direct spending and revenue effects of an amendment in the nature of a substitute to H.R. 4872, the Reconciliation Act of 2010; that amendment (hereafter called “the reconciliation proposal”) was made public on March 18, 2010.

The estimate is presented in three ways:

  • An estimate of the budgetary effects of the reconciliation proposal, in combination with the effects of H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), as passed by the Senate;
  • An estimate of the incremental effects of the reconciliation proposal, over and above the effects of enacting H.R. 3590 by itself;
  • An estimate of the budgetary impact of the reconciliation proposal under the assumption that H.R. 3590 is not enacted (that is, an estimate of the bill’s impact relative to current law as of today).  More… | Washington Post Company

March 17, 2010

Published by The Washington Post Company, the site offers profiles of government decision-makers that anyone can edit. Contributors can use their name, or not, and all information is reviewed by our editorial team before publishing. More…

Potential Effects of the Patient Protection and Affordable Care Act on Discretionary Spending | CBO

March 15, 2010

Congressional Budget Office. Potential Effects of the Patient Protection and Affordable Care Act on Discretionary Spending. March 15, 2010. [Full Text (pdf)]

In its March 11, 2010, cost estimate for H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), as passed by the Senate, CBO indicated that it has identified at least $50 billion in specified and estimated authorizations of discretionary spending that might be involved in implementing that legislation. The authority to undertake such spending is not provided in H.R. 3590; it would require future action in appropriation bills. The attached table provides additional information about those authorizations.

Health Care Turning Point | Roger Battistella

March 15, 2010

Roger M. Battistella. Health Care Turning Point. MIT Press, 165 pages, $21.95.  Book Review ( “Mr. Battistella concentrates his salvos on “single payer” health care, the state-run medicine that prevails in the rest of the Western world….Decentralized market competition is the best option because, he says, “it depoliticizes responsibility for decision-making.” He is confident that trends are moving in a market-based direction.”

Cost estimate of H.R. 3590, Patient Protection and Affordable Care Act | CBO

March 11, 2010

Congressional Budget Office, Cost estimate of H.R. 3590, Patient Protection and Affordable Care Act, March 11, 2010. [Full Text (pdf)]

This summarizes the estimate by CBO and JCT of the direct spending and revenue effects of H.R. 3590 as passed by the Senate.

AMA – Competition in Health Insurance: A Comprehensive Study of U.S. Markets

March 5, 2010

American Medical Association. Competition in Health Insurance: A Comprehensive Study of U.S. Markets. Competition in the health insurance industry is disappearing with more markets across the country dominated by one or two insurers, according to the AMA’s newly released edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets.

In 24 of the 43 states reported in the new AMA report, the two largest insurers had a combined market share of 70 percent or more. Last year, just 18 of 42 states had two insurers with a combined market share of 70 percent or more.

The new AMA study reviewed enrollment by private HMOs and PPOs and found the following data, according to an AMA news release:

  • Ninety-nine percent of metropolitan markets are “highly concentrated” according to federal merger guidelines (up from 94 percent in the previous year).
  • In 54 percent of metropolitan markets, at least one insurer had a market share of 50 percent or greater (up from 40 percent in the previous year).
  • In 92 percent of the metropolitan markets, at least one insurer had a market share of 30 percent or greater (up from 89 percent in the previous year). More…

AEI | A Better Prescription: AEI Scholars on Realistic Health Reform

March 3, 2010

A Better Prescription: AEI Scholars on Realistic Health Reform. By Joseph Antos, Thomas P. Miller. February 23, 2010. Full report (pdf)

Executive Summary

After a year of political wrangling and two thousand-page bills that promise more than they can deliver, it is time for a more prudent approach to health care reform. Americans made it clear that they will not tolerate a top-down health reform that further centralizes power and decision making in Washington. They distrust the promises of lower cost and more secure coverage, and they fear losing what they have now.

A new approach to reform is needed, one that levels with the American people about what is possible and what is necessary. The better prescription requires that we rethink both the goals and methods of health reform.

  • We must set realistic priorities for reform. We have neither the resources nor the wisdom to solve every problem in the health system through one grand legislative act.

  • We must take measured steps to reform the health system, allowing for frequent midcourse corrections as we learn how the system reacts to policy changes. We cannot anticipate every contingency and prevent every adverse consequence, no matter how many experts we consult or pages of legislation we write.

  • We must recognize that the success of health system reform depends crucially on the way individuals, health providers, employers, and others respond to changes in incentives. Government can act as a catalyst for reform without attempting to dictate the results.

  • We must recognize that the ultimate objective is to help Americans achieve healthier, more productive lives. Much of the responsibility for accomplishing that goal will rest with individuals, and their actions can be taken with no changes in government policy.

The following describes targeted actions that should be adopted by Congress as part of a broad health system reform effort. Such actions change the economic incentives and institutional rigidities now built into the health system that promote unrealistic expectations and prevent necessary system improvements.

Number One: Place the Money–and Greater Control–in Consumers’ Hands

Replace Existing Tax Breaks for Health Insurance with Tax Credits. The current “tax exclusion” promotes the purchase of insurance that reduces consumer awareness of the price of health care, which promotes the use of services that may not be worth their cost. It also provides no help for people without jobs and many low-wage workers. Tax credits can free consumers to purchase insurance that better suits their demands and willingness to pay.

Promote Better Health Insurance Choices. Allow insurers to offer coverage in any state once they have satisfied the insurance regulations in their home state. Reduce regulatory barriers that limit the variety of innovative insurance products that may be offered, and promote private “exchanges” that offer one-stop shopping and consumer-friendly information about the benefits, costs, and features of the health plan choices in the market.

Promote Information to Help Patients and Their Doctors Make More Informed Treatment Decisions. Make Medicare claims data available to assess patient outcomes and provider performance. Provide additional federal funding for sharing data, developing more accurate assessment methods, and disseminating clinical-effectiveness and performance information to patients and their physicians.

Number Two: Align Expectations with Reality

Promote Effective and Fiscally Responsible Competition in Medicare. Require all Medicare plans–both private Medicare Advantage plans and the traditional fee-for-service program–bid against each other, and set federal payment based on the low bidders. Provide beneficiaries a risk-adjusted subsidy in the form of a defined contribution rather than an open-ended entitlement to federal payment, allowing them to choose more expensive plans if they wish to pay a higher premium. Allow all plans, including traditional Medicare, greater freedom to develop innovative benefit packages to better meet the needs of beneficiaries.

Provide More Predictable Funding for Medicaid. Transition from uncapped federal financing to the states that pays a percentage of reported program costs to block grants that more accurately reflect the fiscal capacity and health needs of low-income people in each state. Subsidize the purchase of private insurance for Medicaid beneficiaries whose medical needs can be met through that avenue.

Number Three: Create Accountability in the Health System

Provide Better Access to Affordable Private Insurance. Create a functioning health insurance safety net by providing more federal assistance and better operating rules for state high-risk pools. Create a system of guaranteed access to private insurance in which everyone is offered one opportunity to enroll freely in health insurance and those who maintain continuous coverage are rewarded with lower premium rates.

Develop Better Ways to Pay for Health Services That Reward Superior Value. Replace fee-for-service payment methods in Medicare with methods that reward providers based on both the outcome and cost of care. Break down legal and financial barriers to appropriate access and sharing of health system information.

Reform the Medical-Liability System. Enact limits on malpractice awards. Implement specialized health courts better equipped than civil courts to adjudicate claims quickly and accurately.

Promote Personal Responsibility. Provide employers and insurers greater latitude to offer incentives that encourage individuals to achieve personal health goals. Provide greater flexibility in the design of high-deductible health plans and health savings account plans.


Market-based health reform provides the tools by which the health system can become more effective, more efficient, and more responsive to patient needs. It relies on financial incentives rather than central direction and control, and it recognizes that a one-size-fits-all approach will not work in a country as diverse as ours. Unlike a top-down approach, market-based reform fosters accountability throughout the health system.

A market approach is no panacea, but it does not claim to be. It does not make promises to immediately solve every problem. This approach offers something better: a framework for continuing health system innovation and improvement whose strength lies in its flexibility and ability to adapt to change. This is the only real prescription for sustainable reform of our health care system.