CBO: Progressives' Public Option Saves $85 Billion Compared to Blue Dogs' Preferred Approach

Posted by Jed Lewison, Daily Kos at 11:19 AM on September 25, 2009.

Congress Daily reports new CBO estimates show a strong public option would save an additional $85 billion compared to a weak one:

In a bid to wrangle concessions from the Blue Dog Coalition on healthcare reform, House leaders Thursday released CBO estimates for liberals' preferred version of the public option that show $85 billion more in savings than for the version the Blue Dogs prefer.

Rep. Stephanie Herseth Sandlin, D-S.D., a Blue Dog co-chair, said any possible new momentum toward a public option tethered to Medicare rates is, in part, "because of the cost issue" and the updated CBO score.

The original House bill required the public plan to pay providers 5 percent more than Medicare reimbursement rates. But as part of a package of concessions to Blue Dogs, the House Energy and Commerce Committee accepted an amendment that requires the HHS Secretary to negotiate rates with providers. That version of the plan will save only $25 billion.

In total, a public plan based on Medicare rates would save $110 billion over 10 years. That is $20 billion more than earlier estimates, a spokesman for House Speaker Pelosi said.

As Ezra Klein writes, the CBO scoring only reflects the savings to government -- there would be additional savings to consumers.

Moreover, the CBO is estimating savings to the government. That is to say, the $85 billion reflects reduced federal spending on subsidies because premiums in the public plan will be lower. Savings to individuals and businesses paying lower premiums will be much larger than $85 billion, and politically, much more important.

Those who oppose the public option -- Republicans and a diminishing group of Democrats -- really are on the wrong side of this debate. The public option isn't about creating an expensive new government program that would give Ronald Reagan nightmares -- it's about making health care insurance cheaper and better for more people.

The public option is a simple idea, it's a good idea, and it's popular. There is no reason it shouldn't happen.

Tagged as: congress, health care, public option