Pink Fire Pointer Healthcare Reform Update - 12May2010

Healthcare Reform Update - 12May2010

CBO Increases Cost Estimate for Healthcare Reform Law

On Tuesday, the Congressional Budget Office (CBO) released its latest estimate of the total cost of the healthcare reform law.
• The CBO predicts the healthcare overhaul will cost about $115 billion more in discretionary spending over ten years than the original cost projections.
• If approved over the years by Congress, the additional spending would bring the total estimated cost of the overhaul to over $1 trillion.
• The CBO estimated in March that the gross cost of the overhaul would be $940 billion over 10 years, but cautioned that it couldn’t make an estimate of the discretionary costs without more time and information.
• In its latest projection, the CBO included provisions that were not factored in the previous estimate.
• The new numbers reflect the costs of funding programs in the law that are authorized but not paid for. For example, the Department of Health and Human Services is expected to need $5 billion to $10 billion to implement changes in Medicare, Medicaid, the Children’s Health Insurance Program and insurance industry reforms.
• The CBO also expects federal agencies to spend $10 billion to $20 billion over 10 years on administrative costs to implement the overhaul.
• Many Washington insiders expect the numbers to continue to rise, since the CBO noted this new estimate does not include 38 sections of grant programs, which cover 406-pages of legislation.
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Obama Administration Files First Response to Healthcare Reform Lawsuit

• Late on Tuesday, the Justice Department defended the legality of the healthcare reform law in its first response to a number of court challenges.
• This first argument came in a lawsuit that the Thomas More Law Center, a conservative group, filed in federal court in Detroit the same day President Obama signed the first part of the healthcare reform law.
• The group based its lawsuit on a provision that requires most Americans to buy health insurance or face a fine. According to the Thomas More Law Center, this provision is beyond the scope of Congress' power and is an unconstitutional tax.
• The group also holds that the law violates their constitutional rights because federal tax dollars will be used to fund abortions.
• The Justice Department responded by arguing that Congress acted to address a national problem and that the lawsuit was premature because no one had been harmed by the law.
• The Justice Department also argued that Congress did not exceed its authority because individuals who do not want to buy insurance may qualify for an exemption from any penalty, and that U.S. law prohibits lawsuits that are aimed at blocking the collection of taxes.
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Missouri Poised to Become First State to Vote on Healthcare Reform Law

• On Tuesday, the Missouri House gave final approval to a measure that will appear on the state’s Aug. 3 ballot, allowing residents to vote on whether people and employers should be compelled to have health insurance.
• The referendum seeks to defy a provision in the new federal healthcare reform law that requires most Americans to have health insurance or face fines beginning in 2014.
• The legal impact of the Missouri measure is questionable, because courts generally hold that federal laws trump state laws.
• To date, roughly four-fifths of the states have proposed some sort of measure attempting to let people opt out of the federal health insurance mandate.
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