The comprehensive health reform legislation that House Democratic leaders unveiled on October 29 would make significant progress in three critical areas: expanding health coverage and ensuring that such coverage is affordable, slowing the growth in health care costs, and instituting essential reforms in the health insurance market.

Moreover, the bill’s cost is more than fully offset; that is, the legislation would reduce budget deficits by $104 billion over ten years, according to the Congressional Budget Office (CBO). The bill’s revenues and spending reductions would grow faster than the cost of the coverage provisions, according to CBO, which estimates that the bill would modestly reduce deficits in years after 2019 as well.

Policymakers could further improve the legislation by incorporating, at some stage of the legislative process, a provision to limit the tax exclusion for employer-sponsored health insurance such as a modified version of the excise tax on high-cost plans in the Senate Finance Committee’s health reform bill. This would further reduce health care cost growth.

...snip...

- Expanding coverage. Under the House bill, 96 percent of non-elderly legal residents in the United States would have health insurance by 2019. Relative to current law, the bill would reduce the number of uninsured by 36 million, or two-thirds, by 2019, according to CBO’s preliminary estimates. The bill would cover 7 million more of the uninsured by 2019 than the bill that the Senate Finance Committee approved earlier this month.

- Slowing health care cost growth. The bill would take a number of steps, particularly within Medicare, to institute efficiencies to lower costs and change how health care is delivered to improve the quality of care. CBO estimates that the bill would substantially slow Medicare’s growth rate.
CBO Director Elmendorf has noted that changing Medicare’s payment rules is one of “two powerful policy levers” that the federal government has available to encourage changes in medical practice and thereby slow the increase in health care costs. The other lever that Elmendorf identified, a limit on the open-ended tax subsidy for employer-sponsored health insurance, is part of the Senate Finance Committee bill.

- Reforming the health insurance market. The bill includes essential reforms that would greatly improve access to affordable and comprehensive health insurance coverage for people (and employers) at all income levels. It would bar insurance companies from denying coverage or charging higher premiums to enrollees that have health problems and would limit insurers’ ability to charge higher premiums to individuals simply because they are older. It also would set minimum standards regarding what insurers could offer, including an annual cap on out-of-pocket costs and a ban on annual or lifetime benefit limits. These reforms would apply to all policies purchased in the individual market and, over time, all employer-sponsored plans as well.