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Analysis

Senate Measure on Surprise Medical Bills Would Save $7.5B

By John Commins  
   July 16, 2019

The CBO estimates that most of the savings would come from reduced federal subsidies for healthcare and health insurance.  

A U.S. Senate bill aimed at protecting patients from surprise medical bills could also save the federal government about $7.5 billion over the next decade, according to estimates released Tuesday by the Congressional Budget Office.

CBO estimates that under the sweeping Lower Healthcare Cost Act of 2019 the federal government would have to spend about $18.6 billion through 2029, primarily for additional funding for community health centers and other federal programs.

However, that outlay would be more than offset by about $26.2 billion in savings generated by reduced federal subsidies for healthcare and health insurance, CBO says.The bill cleared the Senate Health, Education, Labor and Pensions Committee in late June on a bipartisan vote, and bill sponsor Sen. Lamar Alexander, R-Tennessee, hopes to have it passed on the Senate floor and signed by President Donald Trump by the end of July.

Last week, the House Health Subcommittee passed its own bipartisan package of healthcare reform measures, including a bill dealing with surprise medical bills.  

A recent study by the Kaiser Family Foundation found that 26% of all emergency department visits result in a surprise medical bill.

In addition to addressing surprise medical bills, some of the Lower Healthcare Cost Act's 55 proposals would also: allow cheaper generic or biosimilar drugs to enter the market earlier; impose new rules on contracts between insurers, providers, and pharmacy benefits managers; extend funding for community health centers and other federal healthcare programs; improve consumer access to healthcare cost and quality information; and prohibit some medical billing practices.

The CBO provided some caveats with their estimates, noting that it would be difficult to gauge the effect of provider and payer responses to the bill's provisions, or how well federal and state agencies would be able to implement the law.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

CBO estimates that the federal government would spend about $18.6 billion through 2029 for the bill, primarily for additional funding for community health centers and other federal healthcare programs.

However, that outlay would be more than offset by about $26.2 billion in savings generated by reduced federal subsidies for healthcare and health insurance.

The bipartisan bill cleared the Senate committee in late June on a bipartisan vote and a Senate floor vote is expected by the end of July.

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