Please see below for a fact check on Senator Thune’s remarks on CNN’s State of the Union this morning, where he was wrong on costs:

RHETORIC: Sen. Thune Claimed CBO Report Concluded That Reform Would “Increase The Cost And Bend The Curve Up,” Claimed The Bill Does Not Address Cost Containment. “The whole objective ought to be the bend the cost down, and you have the Congressional Budget Office saying the health care proposal will increase the cost and bend the curve up, and you have the CMS Actuary saying 20% of the hospitals will close, and 17 million people will lose employer-based coverage. And this was a devastating week in terms of this proposal that is currently before the Congress, and it needs to be defeated. We need to start over, and we need to focus on what mark just said, and that’s cost containment. Unfortunately, this bill does not do that.” [CNN State Of The Union, 12/13/09]

REALITY: SEN. THUNE MUST HAVE READ THE WRONG REPORT – CBO FOUND REFORM WOULD CUT COSTS

NYT: CBO Estimate Showed That Senate Bill “Could Significantly Reduce Costs For Many People Who Buy Health Insurance On Their Own, And That It Would Not Substantially Change Premiums For The Vast Numbers Of Americans.” The New York Times reported that, “[t]he Congressional Budget Office said Monday that the Senate health bill could significantly reduce costs for many people who buy health insurance on their own, and that it would not substantially change premiums for the vast numbers of Americans who receive coverage from large employers…Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums. But as a result of the subsidies, it said, most people in the individual insurance market would see their costs decline, compared with the costs expected under current law. The subsidies, a main feature of the bill, would cost the government nearly $450 billion in the next 10 years and would cover nearly two-thirds of premiums for people who receive them.” [New York Times, 12/1/09]

Ezra Klein On Senate Bill: CBO Statements Confirm That, “The Curve, As They Say, Is Bent.” The Washington Post’s Ezra Klein wrote of the Senate health reform bill: “One actual surprise is that the Senate bill doesn’t just pay for itself. It balances itself out. That is to say, the bill is not deficit neutral because it costs a billion dollars and then the government raises a billion more dollars in taxes. In that scenario, the government is spending more, but paying for it. Rather, ‘CBO expects that, during the decade following the 10-year budget window, the increases and decreases in the federal budgetary commitment to health care stemming from this legislation would roughly balance out, so that there would be no significant change in that commitment.’ In the first 10 years, in other words, the bill improves the deficit a bit, but the government is spending $160 billion more on health care than it otherwise would have. In the second decade, however, that ends: The savings from Medicare and Medicaid, paired with the excise tax (which CBO says ‘is effectively a reduction in the existing tax expenditure for health insurance premiums’) and a handful of other changes, leaves the government spending no more on health care than it otherwise planned to. That’s impressive stuff. And it implies, of course, that in the third decade, the federal commitment actually goes down relative to expectation. The curve, as they say, is bent.” [Washington Post – Ezra Klein, 11/19/09]

CBO On Senate Bill: An Insurance Plan With Reform Would Cost Almost 20% Less Than The Same Plan Without Reform. The Washington Posts’ Ezra Klein reported on a section of MIT professor Jonathan Gruber’s analysis of the CBO estimate of the Senate Bill: “In their most recent communication with Congress, CBO also projected that, absent reform, the cost of an individual policy in the non-group market would be $5500 for a plan with an actuarial value of 60%. This implies that the same plan that cost $5500 without reform would cost $4460 with reform, or almost 20% less.” [Washington Post – Ezra Klein, 11/30/09]

REALITY: SENATE BILL IS DESIGNED TO ADDRESS COST CONTAINMENT

MIT Health Economist: “I’m Sort Of A Known Skeptic On This Stuff… [But The Senate Bill] Really Make[s] The Best Effort Anyone Has Ever Made [To Bend The Cost Curve]…I Can’t Think Of Anything I’d Do That They Are Not Doing In The Bill. You Couldn’t Have Done Better.” In an interview with The Atlantic, Jonathan Gruber, noted health economist and professor of economics at MIT, said: “‘I’m sort of a known skeptic on this stuff,’ Gruber told me. ‘My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.’” [The Atlantic, 11/21/09]

23 Of Nation’s Most Well-Respected Health Economists: “We Believe That It Is Important To Enact Health Reform…[It] Will Lower Health Care Costs And Help Reduce Deficits Over The Long Term.” In a letter to the President, 23 of the nation’s most well-respected health economists said: “As economists, we believe that it is important to enact health reform, and it is essential that health reform include these four features [deficit neutrality, excise tax on high-cost insurance plans, independent Medicare commission, delivery system reforms] that will lower health care costs and help reduce deficits over the long term.” [Letter from 23 economists, 11/17/09]

Group Of 23 Economists Included “Republicans, Democrats, Former Bush Administration Officials And Nobel Laureates,” All Of Their Recommendations Are Included In Legislation. In a Washington Post Op-Ed, Peter Orszag noted that, “the Office of Management and Budget reached out to 23 of the nation’s most prominent economists — a group that included Republicans, Democrats, former Bush administration officials and Nobel laureates — to get views on the four elements critical to reducing long-term health-care costs while improving the quality of care for all Americans. Each of the steps endorsed by this bipartisan group is embodied in the legislation under consideration.” [Washington Post Op-Ed, 11/19/09]

MIT Report On Senate Bill Based On CBO Data: American Families Will Save $500 Every Year, Low Income Americans Would Receive Tax Credits To Reduce Insurance Prices Up To $7,500. Politico reported that, “[a] new analysis by a leading MIT economist provides new ammunition for Democrats as the Senate begins formally debating the historic health-reform bill being pushed by President Barack Obama. The report concludes that under the Senate’s health-reform bill, Americans buying individual coverage will pay less than they do for today’s typical individual market coverage, and would be protected from high out-of-pocket costs…The ‘microsimulation’ analysis is by Jonathan Gruber, an economist at the Massachusetts Institute of Technology and a Treasury Department official under President Bill Clinton. Gruber used data from the Congressional Budget Office. Gruber concludes that people purchasing individual insurance would save an annual $200 (singles) to $500 (families) in 2009 dollars. And people with low incomes would receive premium tax credits that would reduce the price that they pay for health insurance by as much as $2,500 to $7,500.’” [Politico, 11/28/09]

CMS Report: Senate Health Care Bill Will Have “A Significant Downward Impact On Future Health Care Cost Growth Rates.” According to a recently released CMS report, the Patient Protection and Affordable Care Act will have “a significant downward impact on future health care cost growth rates.”  [CMS Report, 12/10/09]

TNR: The CMS Report Confirms That Medicare Care Spending “Really Would Come Down.” But the actual price may be even lower, at least as time goes forward. The Medicare Actuary does not project beyond the 2019 window. But it’s reasonable to assume that if the trend holds until 2019, it will hold for a few years beyond, to the point where medical care spending really would come down. And, in the end, the long-term trends on spending are what we really care about. It’s the potential for health reform to gobble up huge chunks of our national wealth twenty, thirty, or forty years from now. That’s the whole argument behind ‘bending the curve.’” [TNR, 12/11/09]

CMS Report: Senate Health Care Bill Saves Seniors Nearly $700 Per Couple Per Year While Reducing Premiums More Than $300 Per Year And Out Of Pocket Costs By Another $370 Per Year. According to a recently released CMS report, the Patient Protection and Affordable Care act saves seniors nearly $700 per couple per year, reducing premiums by more than $300 per year and out of pocket costs by another $370 per year in 2019.  [CMS Report, 12/10/09]

Study: “House And Senate Bills Would Save $683 Billion Or More In National Health Spending…And Lower Premiums By Nearly $2,000 Per Family.” The Commonwealth Fund released a report titled, “Why Health Reform Will Bend The Cost Curve.” It wrote: “The health reform bills passed by the U.S. House of Representatives and under consideration in the Senate introduce a range of payment and delivery system changes designed to achieve a significant slowing of health care cost growth. Most assessments of health reform legislation have focused only on the federal budgetary impact. This study projects the effect of national reform on total national health expenditures and the insurance premiums that American families would likely pay. We estimate that the combination of provisions in the House and Senate bills would save $683 billion or more in national health spending over the 10-year period 2010–2019 and lower premiums by nearly $2,000 per family. Moreover, the annual growth rate in national health expenditures could be slowed from 6.4 percent to 6.0 percent.” [Commonwealth Fund, 12/7/09]

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