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Cost Concerns as Obama Pushes Health Issue
...An analysis released Monday by the nonpartisan Congressional Budget Office raised the hurdles for draft legislation in the Senate just as its Health, Education, Labor and Pensions Committee planned to begin voting on Wednesday. The office concluded that a plan by the committee’s Democratic leaders, Senators Edward M. Kennedy of Massachusetts and Christopher J. Dodd of Connecticut, would reduce the number of uninsured only by a net 16 million people. Even if the bill became law, the budget office said, 36 million people would remain uninsured in 2017.

That finding came as a surprise. Robert D. Reischauer, an economist who headed the budget office when Congress tackled the health care issue in the Clinton administration, said that if so many people remained uninsured, it might not be feasible to cut special federal payments to hospitals that serve many low-income people.

Mr. Obama said Saturday that the government could save $106 billion over 10 years by cutting such hospital payments as more people gained coverage....

...The practical problem for Mr. Obama is that by all accounts, the savings and efficiencies he envisions will not occur quickly, certainly not in the 10-year time frame of budget scorekeeping for purposes of passing legislation.

The budget office estimated that 39 million people would get coverage through new “insurance exchanges.” But at the same time, it said, the number of people with employer-provided health insurance would decline by 15 million, or about 10 percent, and coverage from other sources would fall by 8 million.

In effect, the office said, millions of people would get a better deal if they bought insurance through an exchange because they could qualify for federal subsidies not available if they stayed in their employers’ health plans. Subsidies are expected to average $5,000 to $6,000 a person....

...But a VAT could violate Mr. Obama’s campaign pledge not to raise taxes on households with incomes under $250,000 a year.