CBO Director: Health Care Overhaul Could Raise Spending

Backers of the Democratic plan for overhauling health care often argue that spending on medical needs takes up too much of the American economy, at about 17 percent of the U.S. gross domestic product. The director of the Congressional Budget Office says the plan may end up costing more money in the long run — not because it's too ambitious, but because it doesn't go far enough.

CBO director Douglas Elmendorf told the Senate Budget Committee the proposal lacks "the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."

UPDATE: Sen. Max Baucus (D-Mont.) criticized President Obama's approach to financing the bill. Baucus, chair of the Senate Finance Committee, is wrestling with a $320 billion hole in the $600 billion legislation. One suggestion includes taxing employees on the value of their health insurance, a politically difficult step that Obama has asked the committee not to take.

"Basically, the president is not helping us," Baucus told reporters.

Earlier this week, Elmendorf published more of his findings in a letter to Rep. Charles Rangel (D-NY), chair of the House Ways and Means Committee. Elmendorf calculates that the America's Affordable Health Choices Act

"would result in a net increase in federal budget deficits of $1,042 billion over the 2010—2019 period. By 2019, CBO and the JCT staff estimate, the number of nonelderly people who are uninsured would be reduced by about 37 million, leaving about 17 million nonelderly residents uninsured (nearly half of whom would be unauthorized immigrants)."

NPR's Julie Rovner reports that the Senate Finance Committee is looking at more far-reaching changes, but is struggling to craft a bill that attracts bipartisan support.

Bonus: Massachusetts takes big step away from fee-for-service.

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