Shortly after it posted its analysis of the Senate health care bill, the CBO put up a letter to Congressman Paul Ryan (R-WI) analyzing the House's other health care bill: the $200+ billion dollar "fix" (aka repeal) of the Sustainable Growth Rate.
For those of you who haven't been following along at home, the Sustainable Growth Rate was a cost-cutting measure enacted as part of the Balanced Budget Act of 1997. Not to bore you with unnecessary details, it tied the growth in physician reimbursement payments to GDP growth. This worked for a few years, because we had unusually low cost inflation, and unusually high GDP growth. Then those trends reversed, and physicians screamed bloody murder. Starting early this decade, Congress has annually enacted a temporary fix that either holds physician reimbursements steady, or raises them slightly, rather than cutting them as the law demands. Over the years, compound growth means that getting back to the SGR mandated trendline would require massive cuts in reimbursement rates: 21% this year, and according to the CBO, approximately 2% every year thereafter.
Permanent fixes were originally part of the House bill. The problem is, those fixes are, as you can imagine, very, very expensive. They made the bill cost more than $900 billion, and also, not be so deficit neutral. So they took it out and enacted it separately, without any financing measures.
Paul Ryan asked the CBO the natural question: "So what would these bills look like if they were enacted together?" The answer, according to the CBO, is that together they'd increase the deficit by $89 billion over ten years. And those increases would be back loaded: by 2019, they'd be pushing the deficit upward by $23 billion a year. The House health care bill makes the physician reimbursement fix somewhat cheaper. But the physician reimbursement bill makes the house health care bill cost slightly more--which is to say, if it were already law, the estimate of deficit reduction would be about $3 billion lower over the next ten years.