The White House budget director told Congress Tuesday that the final cost of the administration’s health care reform plan will exceed the $634 billion the president has set aside for the effort.
Office of Management and Budget Director Peter R. Orszag declined to give a final price tag of the overhaul, telling the Senate Finance Committee hearing he didn’t want to play the “typical Washington game of gotcha.”
But he called the $634 billion that President Obama has pledged for health care reform during the next 10 years a “significant down payment.”
“With regard to benefits and coverage, we want to leave everything on the table at this point to allow the process to play out,” Mr. Orszag told the panel. “So you should not expect - and you will not be receiving - definitive answers from me on exactly what the administration does or does not favor on the benefits and coverage side of health reform.”
The committee chairman, Sen. Max Baucus, Montana Democrat, said health care costs are growing too rapidly because “the system pays for volume, not quality.” He added that, as more Americans are forced to forgo medical treatments because of rising costs, health insurance becomes more expensive because providers shift the cost of uncompensated care to paying customers.
“It’s a vicious cycle,” he said. “Each problem feeds on the others. We need a comprehensive response.”
Mr. Orszag, in responding to a Baucus question about the “cost of doing nothing,” predicted that ignoring the problem will lead to a fiscal crisis for the federal government that also will burden state capitals.
But the committee’s ranking Republican, Sen. Charles E. Grassley of Iowa, said he worries that the administration’s proposed cuts to private Medicare Advantage plans - savings that would be used to pay for health care-related spending boosts elsewhere - would come at the expense of rural states.
“I want to make sure that we - if we have a national system of health care - it’s going to deliver the same thing in Iowa as it does in California, because, for 40 years, it didn’t,” he said.
Mr. Grassley added that, while he agreed with the president’s commitment to health care reform, “it won’t fix all the problems with our economy,” nor will it mend broken components of the health care “entitlement” programs, he said, such as Medicare and Medicaid.
“Fixing health care is necessary but not sufficient,” Mr. Grassley said. “Still, we have a great opportunity before us, and it’s an opportunity we are taking.”
Mr. Baucus reiterated his commitment to quickly craft and pass a sweeping reform package, saying he hopes to “mark up” a comprehensive health care reform bill in June and have the bill ready for the president’s signature this summer.