Explaining cost savings in the Senate bill

Reporting from Washington —  Some reader questions about the healthcare legislation in Congress:

If the Senate bill is estimated to cost $848 billion over the next decade, how can Democrats say it will cut the federal budget deficit by $130 billion?

The Congressional Budget Office says that the government will take in more in revenues from taxes and fees -- and save money by trimming the fat out of Medicare -- than it will spend extending health coverage to more Americans.

Under the Senate plan, a tax on high-cost insurance plans is expected to generate about $150 billion over the next decade. Fees on drug companies, medical device makers and insurers are expected to bring in about $100 billion. The bill also raises the payroll tax on high-income workers who receive Medicare.

At the same time, it projects extracting about $436 billion in cost savings in Medicare over the next 10 years, mainly by changing the way doctors and hospitals are paid.

Does that mean my Medicare benefits will be slashed?

Payments would be reduced to Medicare Advantage plans, a popular private alternative to standard Medicare.

The bill also would establish a commission that would be charged with finding other sources of savings.

The Congressional Budget Office says it is likely that the commission will focus on reducing payments for benefits that are not required under Medicare but that are often offered by Medicare Advantage plans.

What about the tax on cosmetic surgery?

The Senate bill imposes a 5% tax on elective cosmetic procedures or surgeries. It would apply if the procedure is “not necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease.”

That likely includes such procedures as nose jobs, breast implants and Botox injections.

If the bill becomes law, the tax could start as soon as January and raise an estimated $5 billion over the next decade to pay for the healthcare overhaul.

Are there differences in the way the House and Senate bills treat abortion coverage?

Both attempt to prevent federal funds from being used to pay for abortions, but the Senate language is less sweeping than the amendment adopted by the House.

The House bill expressly prohibits insurers from offering abortion coverage to anyone who receives federal subsidies, and prohibits the government-run insurer -- the “public option” -- from offering abortion coverage.

The Senate bill requires insurers, whether public or private, to segregate federal money from premium revenues in separate accounts to ensure that only private funds are used to cover abortions.

It is likely that Republicans and moderate Democrats will use the Senate floor debate to push for language that more closely resembles the House bill’s.

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