In another blow to Democrats’ health care claims, the
Congressional Budget Office released
an analysis on Monday projecting that the Senate health care bill
would raise premiums by more than $2,000 on family policies
compared to what the cost otherwise would be if Congress were
simply to do nothing.
The report, prepared at the request of Sen. Evan Bayh, found that
premiums on policies individuals purchase on their own or through
the government-run exchanges would cost 10 percent to 13 percent
more in 2016 than under current law. In dollar terms, in 2016 an
individual policy would cost $5,800 and a family policy would
cost $15,200 if the Senate bill were enacted, according to the
CBO, compared with $5,500 and $13,100 under the status quo.
In an appearance on Fox News Sunday, Bayh, a moderate Democrat
from Indiana, said
that the CBO report would figure prominently in his decision
making process as he evaluates whether he should support the
legislation.
“I’m going to be looking at - and we haven’t gotten the score
from the CBO yet; they’re about to give it to us - what does this
do for the cost of insurance for people who currently have it,”
Bayh said. “We want to cover the uninsured, yes, but we don’t
want to do it in a way that’s going to drive up the costs for
folks who currently have it. That’s one of the biggest complaints
that I hear from people. So I’m going to be looking very
carefully at what the bean counters have to say about that.”
The major driver of the increased premium costs are the new
mandates that will force insurers to offer more comprehensive
coverage, and effectively bar individuals from purchasing less
benefit rich insurance at a lower price.
The CBO said the legislation would have less of an affect on
group coverage — small employers may see their premiums go up 1
percent or down 2 percent, while larger employers could see no
change, or see their premiums go down 3 percent.
From the start of the process, one of primary rationales
President Obama has given for the urgent need to pass health care
legislation is that the cost of premiums are skyrocketing, and
putting more pressure on family budgets. In a speech to the
American Medical Association in June, Obama
declared that, “if we fail to act, premiums will climb
higher.” Now the CBO has estimated that if we do act — at least
in the way Democrats are proposing — premiums will climb even
higher than the unsustainable levels that supposedly prompted the
drive for reform in the first place.
Earlier this month, the actuary at the Centers for Medicare and
Medicaid Services found that the bill passed by the House would
raise overall health care spending in the United States,
despite pledges to the contrary.
UPDATE: TNR’s Jonathan Cohn, via Twitter, asks why I
didn’t mention the federal subsidies that would more than offset
the cost of the increased premiums for about 57 percent of those
obtaining insurance on their own. The reason I didn’t is that the
subsidies do not change the underlying cost of the policies —
the only difference is that other taxpayers are picking up the
rest of the higher tab. And
14 million Americans who earn too much to qualify for
subsidies (the cutoff is $43,320 for individuals; $88,000 for a
family of four) would see their premiums go up. The point is that
when the health care push began, we were led to believe that
legislation would reduce the economic burden of health care costs
by lowering premiums and containing the growth of health care
spending. But the current legislation does not accomplish that
goal. If liberals still want to argue that helping more Americans
obtain coverage is worth the costs, that’s fine. But saying that
government will subsidize the higher premium costs created by
health care legislation is a far cry from boasting that reforming
our health care system will lower the actual price of insurance.
With that said, rereading my post, I realize that the way I
phrased things originally made it sound as if anybody purchasing
insurance on their own would personally be paying more for
insurance than under the status quo, and that wouldn’t be the
case for those receiving subsidies — regardless of whether their
costs are ultimately borne by others. I just went back and
tweaked the language.
