Health-Care Overhaul Goals Prove Challenging

By JANET ADAMY WASHINGTON -- Lawmakers are trying to keep the price of a health overhaul near $1 trillion over a decade. They also want the plan to result in near-universal coverage, so that more than 95% of Americans have health insurance. Reaching both of those numbers at the same time is turning into one of hardest tasks for Congress and the White House. The nonpartisan Congressional Budget Office has found that several initial efforts either sailed beyond the targeted price tag or left many people without insurance. The CBO said this week that one Senate proposal, when combined with certain expansions to the Medicaid program, would cost about $1.1 trillion over a decade and still leave 15 million to 20 million Americans uninsured in 2019. Currently, about 46 million U.S. residents lack insurance, according to the Census Bureau. The Senate Health, Education, Labor and Pensions Committee at first developed a plan that offered generous subsidies to lower-income Americans to help them buy health insurance. The proposal would require most people to carry insurance or pay a penalty. When the price tag came in too high, lawmakers whittled the subsidies, which helped the cost problem but made it difficult for people to buy insurance. "The more you're going to make people pay, the harder it is to say to them, 'You must buy it,'" said David Cutler, a professor of economics at Harvard University. Keeping the federal cost to around $1 trillion or less is critical because the White House is emphasizing that the plan won't increase the deficit -- meaning savings must be found for every dollar spent. Lawmakers are making progress in reducing costs in a healthcare reform bill they'd like to pass in August. WSJ's Janet Adamy looks at recent developments that help smooth over some of the bumps they've had in their debates. "Rising costs are crushing us," Vice President Joe Biden said Wednesday. "They're crushing families, crushing businesses, crushing state budgets -- and they are crushing the health-care industry itself." Mr. Biden trumpeted a deal with the hospital industry to cut government payments through Medicare and Medicaid by $155 billion over a decade, savings that could be used to fund an overhaul. According to a CBO estimate last week, the Senate health committee's proposal would cost $611 billion over 10 years. That estimate didn't include the cost of expanding Medicaid, the federal-state insurance program for the poor, because that's outside the committee's jurisdiction. The CBO said Tuesday that expanding Medicaid to a new batch of Americans with incomes as high as $33,000 a year for a family of four would add $500 billion to the cost of the proposal. The high cost estimates and prospect that millions would remain uninsured has left negotiators scrambling for ways to make the numbers work. The Senate Finance Committee, which is working on a parallel health bill, has discussed delaying the Medicaid expansion until 2013. That would reduce the 10-year cost of the bill. The committee is considering a narrower expansion of the program than the one calculated by the CBO, so the measure may result in a smaller reduction in the uninsured number by the end of the 10-year period. Republicans say the expansion of public programs would undercut the current employer-based health-insurance system. Sen. Mike Enzi of Wyoming, the ranking Republican on the health committee, said Wednesday that the committee's bill "breaks the Democrats' promise that if you like the care you have, you can keep it." Sen. Enzi said the plan "will force millions of Americans to lose their current health insurance." Another way to bring down the number of uninsured while keeping down the cost is to enact stricter mandates on businesses to offer health insurance and individuals to have it. However, those mandates are politically sensitive and carry costs of their own -- albeit not directly paid by the government. Write to Janet Adamy at janet.adamy@wsj.com