Congressional Budget Office Releases Cost Estimates of Two Health Care-Related Bills

The Congressional Budget Office recently released two cost analyses of health care-related legislation. Summaries appear below.

• Association health plans: Legislation (HR 525) to allow small businesses to form AHPs across state lines would decrease federal revenues by $3 million in 2006 and $71 million between 2006 and 2010, according to a CBO analysis, CQ HealthBeat
  reports. Between 2006 and 2015, federal revenues would decline by $261 million as a result of the legislation, with about $76 million lost from off-budget Social Security payroll taxes, according to the report. According to the analysis, the measure would decrease enrollment in state Medicaid programs by extending private insurance to employees and their dependents. CBO estimates the bill would reduce net federal spending for Medicaid by $1 million in 2006, $24 million between 2006 and 2010 and $80 million between 2006 and 2015. However, some workers might lose employer-sponsored health coverage under the bill and enroll in Medicaid, CBO stated. Sen. Olympia Snowe (R-Maine) has introduced a similar measure (S 406) in the Senate, where it "faces difficulties," CQ HealthBeat reports.
  


• Children's hospitals: A bill (S 285) that would reauthorize funding for a program that pays children's hospitals to operate graduate medical education programs would cost $248 million in 2006 and $1.6 billion between 2006 and 2010 "assuming the appropriation of the necessary amounts," CBO states. According to CBO, the estimate accounts for "direct" costs, such as the salaries of medical residents, and "indirect" costs, which are intended to compensate hospitals for patient care costs. The measure was approved by the Senate Health, Education, Labor and Pensions Committee in February (CQ HealthBeat, 4/18).