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Nation's Health Care Tab to Grow Under Senate Bill

12/09/09_Harry Reid smirks

File: Senate Majority Leader Harry Reid, D-Nev., leaves a Democratic caucus on Capitol Hill in Washington. (AP)

WASHINGTON – Democrats trying to push President Obama's health care overhaul through the Senate received a sobering economic warning from a new government report Friday that raises troubling questions about the bill's cost.

The analysis from nonpartisan economic experts at the Health and Human Services Department concludes that the nation's health care tab will grow more rapidly under the Democratic plan senators are debating -- an estimated increase of $234 billion over 10 years. It also calls into question the Democrats' plan to squeeze $493 billion in savings from Medicare over 10 years, saying it "may be unrealistic."

In more bad news, the report released Friday warns that a new long-term care insurance plan included in the legislation could "face a significant risk of failure." The silver lining: The bill provides coverage to 93 percent of Americans.

Republicans immediately pounced on the news.

"The experts tell us that the Reid bill would drive up costs and hurt seniors on Medicare," Sen. Mike Enzi, R-Wyo., said. "Higher costs and cuts to Medicare are not the reforms the American people want and need. How many more devastating studies do we need before the Democratic leadership will agree we need to scrap these flawed bills and start over?"

Sen. John Cornyn, R-Texas, said the report only confirmed his warnings.

"Democrats have refused to believe me and my colleagues when we told them that the monstrous 2,074 page, $2.5 trillion Reid health care bill would increase premiums, raise taxes and cut Medicare," he said in a written statement, citing a figure that exceeds the $848 billion estimate from the Congressional Budget Office and reflects what opponents say is the true cost of the bill when all the provisions are included. 

"Now we have President Obama's own independent actuary not only confirming these findings, but also concluding that the Reid bill would actually drive up this country's unsustainable level of health care spending," he said. "It's time for Democrats to take their heads out of the sand and face the fact that the Reid bill is bad for America. It's time to start over, craft a truly bipartisan bill that lowers costs for American families, businesses and taxpayers."

But Democratic leaders welcomed the report, with Reid saying it confirms that his bill saves money and extends the life of Medicare.

"We are continuing to strengthen this bill on the Senate floor, and we're already closer than ever to delivering historic reform to our broken health care system," Reid said. "With each passing day, we move closer to the finish line. Our bill saves money, saves lives and saves Medicare."

Senate Finance Committee Chairman Max Baucus, D-Mont., said the report contains "a lot of great news."

"This report is yet another independent, nonpartisan analysis making clear health reform will extend the life of Medicare for nearly a decade and reduce premiums and cost-sharing for Medicare beneficiaries by nearly $500 per couple annually," he said. 

"Also, the report shows that health reform will ensure both the federal government and the American people spend less on health care than if this bill doesn't pass, helping get a hold of America's debt and keep more money in people's pockets."

The news comes as Senate Democrats are considering changing a proposed expansion of Medicare to address complaints from doctors and hospitals and defray costs for consumers.

Under the plan, uninsured individuals ages 55 to 64 could purchase coverage under Medicare. The expansion is part of a compromise for dropping a full-blown national government-run insurance plan from the legislation that Democrats and the White House hope to push through the Senate by Christmas.

The American Hospital Association and American Medical Association have both criticized the proposed Medicare expansion since it was announced Tuesday night, saying the program pays health care providers less than private insurance companies, and warning against increasing the number of patients.

"We are trying to find a solution," Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, told reporters in the Capitol, saying that the groups had raised legitimate concerns.

Separately, officials said there were discussions about the possibility of defraying the expense of Medicare coverage for uninsured individuals under 65. Under some estimates, the cost could be as high as $7,600 annually — more than $600 a month — until subsidies become available in 2014.

Current Medicare beneficiaries pay $96.40 per month, with the government picking up the rest of the premium cost.

The officials spoke on condition of anonymity, saying they were not authorized to discuss possible changes publicly.

The other key part of Tuesday night's compromise called for creation of private insurance plans to be overseen by the Office of Personnel Management, the federal agency that oversees the insurance program used by members of Congress and their families.

When Senate Majority Leader Harry Reid unveiled the compromise, he told reporters he could finally see the end in sight of the long struggle to overhaul the nation's health care system. The measure under debate in the Senate would extend coverage to tens of millions who lack it, ban the insurance industry practice of denying insurance because of pre-existing medical conditions and generally rein in the skyrocketing cost of medical care nationally.

Democrats need 60 votes to overcome Republican opposition and pass the legislation, and optimism has seemed to increase since the Tuesday night announcement.

Fox News' Trish Turner, Jim Angle and The Associated Press contributed to this report.