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Today, the Centers for Medicare and Medicaid Services (CMS), issued it’s memorandum on the estimated effects of the “America’s Affordable Health Choices Act of 2009″ H.R. 3962

As indicated in the table below, the estimated costs to expand coverage under the bill is about $935 Billion through FY2019. The net saving from Medicare, Medicaid and other reforms is estimated at a total of $529 Billion. Thus leaving a net cost for years 2010 -2019 at approximately $406 Billion before additional Federal administrative expenses, increase in Federal income, and other tax revenues that would result from taxing high-income individuals and families.

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The second chart show the Estimated Effects of H.R. 3962 on Enrollment by Insurance Coverage, 2019

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The Center concludes:

• The total Federal cost of the national insurance coverage provisions would be about $923 Billion during fiscal years 2013 through 2019
• By 2019, an additional 34 million U.S. citizens and other legal residents would have health insurance coverage meeting the essential-benefit requirements
• Total net savings in 2010-2019 from Medicare provisions would offset about $571 billion of the Federal costs for the national coverage provisions. (The reforms to the Medicare Sustainability Growth Rate physician payment mechanism, which would increase Medicare costs by an estimated $214 billion during this period, have been removed from H.R. 3962 and placed in a separate bill, H.R. 3961) The non-coverage Medicaid provisions would increase costs; however, the Office of the Actuary does not have the expertise necessary to estimate such tax impacts. CBO and Joint Committee on Taxation have estimated an overall reduction in the Federal budget deficit through 2019 under H.R. 3962 (and excluding the effects of H.R. 3961)
• The proposed Community Living Assistance Services and Supports insurance program would produce an estimated total net savings of $39 billion through fiscal year 2019. This result, however, is due to the initial 5-year period during which no benefits would be paid. Over the long term, expenditures would exceed premiums receipts, and there is a significant risk that the program would become unsustainable as a result of the adverse selection by participants.
• Total national health expendatures in the U.S. during 2010-2019 would increase by about 0.8 precent. The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.
• With the exception of  the proposed reductions in Medicare payment updates for institutional providers, the provisions of H.R. 3962 would not have a significant impact on future health care cost growth rates. In addition, the long-term viability of the Medicare update reductions is doubtful.

Republican House Minority Leader John Boehner released the following statement about this report:

House Republican Leader John Boehner (R-OH) responded today to an analysis by nonpartisan, independent experts at the Centers for Medicare and Medicaid Services (CMS) requested by House Ways & Means Ranking Republican Dave Camp (R-MI) on Speaker Nancy Pelosi’s (D-CA) health care bill.  The report unequivocally shows that Speaker Pelosi’s bill would raise national health care costs – not lower them as the Speaker and House Democrats have asserted – by $289 billion if it were enacted.  Boehner issued the following statement:

“This report once again discredits Democrats’ assertions that their $1.3 trillion government takeover of health care will lower costs, and it confirms that this bill violates President Obama’s promise to ‘bend the cost curve.’  It’s now beyond dispute that their bill will raise costs, which is exactly what the American people don’t want. Instead of working with Republicans on common-sense solutions to lower costs, Speaker Pelosi and House Democrats instead have chosen to create a health care monstrosity that will make things worse for middle-class families and small business.  It doesn’t have to be this way.  Democrats should scrap their current proposal and work in a bipartisan way on a plan to lower costs and increase access at a price tag our nation can afford.”

NOTE: House Republicans have offered better solutions to lower health care costs for families and small businesses.  The Congressional Budget Office (CBO) confirmed that the Republican health care plan will lower premiums by up to 10 percent and reduce the deficit by $68 billion over 10 years without imposing tax increases on families and small businesses.

Below is the Centers for Medicare and Medicaid Services (CMS) Estimated Effects of the “America’s Affordable Health Choices Act of 2009″ H.R. 3962 memorandum in it’s entirety:

OACT Memo –