The American Spectator

Print Email

Text Size

The Spectacle Blog

Sen. Baucus, speaking on the Senate floor earlier this afternoon, erroneously claimed that the Congressional Budget Office determined that small business owners would see their health insurance premiums stabilize, or even fall slightly, if the Senate health care bill passed. But in reality, the CBO found that the bill would have virtually no impact on premiums for small businesses, and could even slightly raise them beyond what they otherwise would be if we did nothing.

In his remarks, Baucus told the story of a small business that was scrambling to maintain its workers, and was eventually forced to sign up with a provider that raised premiums by 20 percent, to avoid a 30 percent hike from another insurer.

“That happens today, and it is wrong," Baucus declared. "Wrong! Wrong! Wrong! So if you’re a small business person under this bill, you’re going to find your premiums are going to be much more stable, and there’s going to be a much greater pool into it, so your premiums, actually, as the CBO says, should be less. Not by a lot, but less. But stable. You don’t have to worry about an insurance company coming to you next year and saying, ‘We’re going to charge you a lot more.’”

But the CBO found that whether or not the bill passes, premiums would go up on small businesses. The only question was whether they would be marginally higher or lower in 2016 than they would otherwise be. Specifically, the CBO estimated "that the change in the average premium per person resulting from the legislation could range from an increase of 1 percent to a reduction of 2 percent in 2016 (relative to current law)." Get that? Relative to the current system that is "Wrong! Wrong! Wrong!" the bill could lower premiums modestly, but it could also increase them slightly.

Put in dollar terms, the CBO found that, "average premium per policy in the small group market would be in the vicinity of $7,800 for single policies and $19,200 for family policies under the proposal, compared with about $7,800 and $19,300 under current law."

So that means that under an optimistic scenario, a typical small business could hope to save $100 seven years from now on an expensive family policy, compared to what the business would have paid under the unsustainable status quo. At the same time, it's also possible that the business could end up paying even more for insurance than if we simply did nothing.