Numbers Game

TNR's Jon Cohn explains the numbers behind the Dems' new health care plan.

So what's the real bottom line? Covering 95 percent of residents--and 97 percent of legal residents--through a program that will require outlays of around $1 to $1.3 trillion but should, if fully offset, not inflate the deficit by a dime.

Insofar as the new media reports make it seem like HELP came up with a magic elixir to cover everybody for far less money than most experts thought, I suppose there's a certain rough justice here. When the partial HELP estimate came out a few weeks ago, the media made the opposite mistake--and made it seem like the HELP bill showed reform to be way more expensive than it really was.

Still, neither the media--nor progressives--are doing the reform cause a favor by hyping the $600 billion figure. Right now, the committee with the jurisdicton over those other elements--Senate Finance--is busy hacking away at its program to bring the price tag in at under $1 trillion. But to do that, Finance is cutting subsidies and, most likely, coverage. The proper, honest reading of HELP's bill sets out a marker for how big a program has to be: at least $1 trillion and probably a bit more.

And where is that offset coming from? Not only the public option saving money and the reform of Medicare/Medicaid, but as Ezra Klein explains the real trick is the employer mandates to cover all employees under the plan:

The June 15th proposal didn't include an employer mandate. And without one, the news was grim: Employers would drop coverage for 15 million employees and send them to the Health Insurance Exchange where they would need government subsidies to afford health insurance. That meant costs exploded and coverage contracted. Health reform looked like a bum deal.

But oh, what a difference a mandate makes: The new version of the HELP bill includes an employer mandate for firms with more than 25 workers. Every full-time worker who isn't given health-care coverage triggers a penalty of $750. Every part-time employee not given coverage costs $375. Doesn't seem like very much, does it? But it's enough. In Massachusetts, the employer mandate has been a success with a piddling $295 penalty. Indeed, the evidence we have suggests that the small penalty creates a massive change in behavior.

And you see the result in CBO's latest score. The June 15 report estimated that 15 million Americans would lose their employer-based coverage under HELP's bill. Today's report estimates that a mere 150,000 will lose their coverage. That's nothing. And it means that a lot more Americans end up insured and the government spends a lot less in subsidies.

This is important news, and also explains why Republicans are already counter-attacking on the mandates issue by saying it will be average Americans who will be forced to have insurance (and penalized) rather than employers having to offer it and being penalized if they don't. Republicans are trying to kill the mandates issue the same way they have with gay marriage: by making it a state's rights issue, knowing that the more states enact laws to exempt themselves from mandates, the more likely Obamacare will fail...which is of course the point.

Remember, Obamacare can't pass. If it does, the GOP is done. They will do anything to stop it. Perception is reality here, and luckily, progressives understand this and are launching their own ad campaign.

Here's one.

The fight for Obamacare is truly on.