Kennedy Health Plan to Add 1 Trillion to Deficit

According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period. When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million.--CBO A preliminary analysis of the major provisions related to health insurance coverage contained in the “Affordable Health Choices Act,” June 15th 2009

A trillion more on the budget and it won't even cover everyone and it might even be more expensive! The Kennedy plan has always been the deeper edge of the pool in regards to costs compared to the alternate plan being pushed by Max Baucus. We knew it would be pricey, but this is is crazy and its no wonder some liberals were thinking about ditching the CBO estimates.
From the Times:

An analysis released Monday by the nonpartisan Congressional Budget Office raised the hurdles for draft legislation in the Senate just as its Health, Education, Labor and Pensions Committee planned to begin voting on Wednesday. The office concluded that a plan by the committee’s Democratic leaders, Senators Edward M. Kennedy of Massachusetts and Christopher J. Dodd of Connecticut, would reduce the number of uninsured only by a net 16 million people. Even if the bill became law, the budget office said, 36 million people would remain uninsured in 2017.

That finding came as a surprise. Robert D. Reischauer, an economist who headed the budget office when Congress tackled the health care issue in the Clinton administration, said that if so many people remained uninsured, it might not be feasible to cut special federal payments to hospitals that serve many low-income people.

Mr. Obama said Saturday that the government could save $106 billion over 10 years by cutting such hospital payments as more people gained coverageSenator Orrin G. Hatch of Utah, a senior Republican on both committees drafting health legislation, said he found the office’s numbers stunning. He calculated that the Kennedy bill would cost taxpayers $62,500 per uninsured person over the 10 years..

Insolvency is where we are headed if this plan goes through, anyway the President has routinely been spouting nonsense about savings that don't exist, the truth is getting out:

The practical problem for Mr. Obama is that by all accounts, the savings and efficiencies he envisions will not occur quickly, certainly not in the 10-year time frame of budget scorekeeping for purposes of passing legislation.

Expect more nonsense from the President as reality begins to hit home, anyway they are still scrambling to find a way to pay for all of this and now they are looking at a VAT tax:

Democrats on three House panels continue to meet privately to seek consensus on a single plan. Democrats on the House Ways and Means Committee said they were trying to decide whether to finance coverage of the uninsured with one broad-based tax, like the value-added tax, or a combination of smaller taxes.

The value-added tax, common in other countries, is collected in stages from each business that contributes to the production and sale of consumer goods. Economists say a 5 percent VAT could have raised $285 billion last year. But a VAT could violate Mr. Obama’s campaign pledge not to raise taxes on households with incomes under $250,000 a year.

If democrats pass a VAT tax to provide coverage for 15 million Americans, many of whom choose not have insurance, the GOP will retake the Congress.

For the CBO summary of the Kennedy- Dodd plan.