The Congressional Budget Office said Thursday that many of the health care proposals championed by President-elect Barack Obama and other Democrats would carry a high price tag and would generate only modest savings.
The budget office, an influential voice in the work of Congress, analyzed 115 options, including proposals to expand coverage and slow the growth of health spending.
Some of the options, including proposals to increase taxes on cigarettes and nondiet soft drinks, are sure to meet stiff political opposition.
One bright spot in a generally bleak picture was the estimate of potential savings from a requirement for doctors and hospitals to use health information technology, including electronic medical records, as a condition of participating in Medicare.
Such a requirement could save the federal government $7 billion in the first five years and a total of $34 billion over 10 years, by reducing medical errors and avoiding unnecessary tests and procedures, the budget office said. It “would also lower health insurance premiums in the private sector,” the report said.
Without action by Congress, the report said, health costs will continue to soar, the number of people without insurance will rise by nearly one million a year, to a total of 54 million in 2019, and spending on health care will increase to 25 percent of the gross domestic product in 2025, up from 16 percent in 2007.
But Mr. Obama and other Democrats have not been precise about the cost of their proposals, nor have they said in detail how they would pay for them. One of the Democrats’ favorite proposals, rolling back tax cuts for high-income people, is already scheduled to occur in 2011, so, under the bookkeeping rules used by Congress, it would not produce a windfall of new revenue.
Mr. Obama and many other Democrats want the government to negotiate with drug manufacturers to get lower prices for Medicare beneficiaries.
The Congressional Budget Office said such negotiations “would produce small if any savings” because the government would not have enough leverage to secure significant discounts beyond those already obtained by private insurance companies that manage the Medicare drug benefit.
But the budget office said Medicare could save $110 billion in the next 10 years if Congress simply imposed a form of price controls, requiring drug makers to provide the government with a 15 percent rebate, or discount, on brand-name drugs covered by the new Part D of Medicare.
The federal government could save $12 billion in the next decade if it established a procedure for approval of generic versions of expensive biotechnology drugs, the report said. It did not estimate the additional savings for consumers and employers, which could be substantial.
So, health care voters, will you get the “universal” system anytime soon? Do not look for it or hpld your breath.