The coverage provisions in the Senate health bill have a much lower ten-year cost that do the coverage provisions in the House bill. According to the Congressional Budget Office (CBO), the coverage provisions in the Senate bill will cost $848 billion from 2010 through 2019, while the corresponding costs for the House bill are $1.052 trillion, more than $200 billion higher. (Please keep in mind, though, that the total cost of both bills is higher because of other provisions.)
When I was reading newspapers this morning (yes, I still get ink on dead trees), I noticed several claims that this difference in gross costs could be traced to a timing difference. The main coverage provisions in the House bill start in 2013, while the corresponding provisions in the Senate bill start in 2014.
This seems like a potentially important point, so I took another look at the cost estimates to get a sense of how big this effect is. The answer? It’s big. As illustrated in the following chart, a year makes a big difference in the gross coverage costs within the ten-year window:
The coverage costs in the House bill (denoted in gray) do indeed ramp up a year earlier than the costs in the Senate bill (denoted in orange). As a result, the ten-year cost estimates include seven years of coverage efforts under the House bill, but only six years under the Senate bill.
That timing difference accounts for almost all of the gap between the $848 billion gross coverage cost of the Senate bill and the $1.052 trillion of the House bill. (One way to see this is to note that the seventh year of the House bill costs about $200 billion, almost exactly equal to the difference in the ten-year cost estimates).
Bottom line: Over the ten-year window, the gross coverage costs of the two bills appear quite different, with the Senate bill coming in about 20% lower than the House bill. But much of that difference is timing. Over longer time periods, the gross coverage costs are much closer together.