Here's the latest health care reform claim, by Rep. Mike Pence:
"The CBO has confirmed what every American already knows, the Democrats' plan for a government takeover of health care will dramatically raise health care costs on working families. This latest CBO study reveals that the health care bill before the U.S. Senate will raise individual insurance premiums by up to 13 percent. That means every family that refuses the government's one-size-fits-all plan, will be forced to spend an additional $2,100 a year to keep their current health care.
Pence doesn't say, but here's where he gets the figure:
Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.
Fairly clear, right? Only if you're suddenly blinded.
The very next sentence in the CBO report is: "Those figures indicate what enrollees would pay, on average, not accounting for the new federal subsidies. The majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium, CBO and JCT."'
For those receiving subsidies -- the people who Pence's statement is targeting because they're the most vulnerable -- the CBO says that "...the amount that subsidized enrollees would pay for nongroup coverage would be roughly 56 percent to 59 percent lower, on average, than the nongroup premiums charged under current law."
People who don't qualify for the subsidies and don't want to keep their current plans may find that their "average premiums would increase by somewhat less than the 10 percent to 13 percent difference for the nongroup market as a whole." These people will pay more than they would today, assuming they don't purchase their insurance before the changes kick in.
The critical point here is that the subsidies will significantly offset the premium increases for the majority of people buying insurance individually.
The Democrats need to confront reality here, too: the cost of health care, for some people, will go up. But for most people, it'll go down -- and these estimates don't include the various unscoreable administrative savings and cost-containment mechanisms that will be built into the plan.
Note, per Ezra Klein, that unsubsidized premiums will go up only because the insurance offered on exchanges will be mandated to cover a lot more than plans on the indiv market currently cover. The deal is 30% more value @ 10-12% more cost. http://tinyurl.com/create.php
Link broken. Maybe this one? http://voices.washingtonpost.com/ezra-klein/2009/11/congressional_budget_office_re.html
Also, the final point about unscorables has intrigued me for a while now. On one level, I appreciate the CBO's conservative math because it gives me confidence that they're trying to be as empirical as possible. On another level, I want something to measure progress by. Is there anyone out there with the courage to try to estimate the value of these cost-containment mechanisms? I've noticed several economists endorsing them, but I haven't seen numbers associated. Just curious.
Actually, your statement that premiums will go down for most people is demonstrably incorrect. According to the CBO, premiums will go down for 57% of the people who directly purchase insurance in the individual market (about 18 million people). They will increase for 43% who buy individual insurance (14 MM). Premiums will be essentially unchanged for small groups (25 million) and large groups (134 million). So by my calculation premiums will go down for only 9% of the population (18 out of 191 million). That's not even adjusting for the 45 million people on Medicare who will not see any decrease in premiums either or for the millions who will be fined for not purchasing insurance.
And that concludes MBP's perfect example of how to avoid what was just pointed out in the article.
"Actually, your statement that premiums will go down for most people is demonstrably incorrect. " Back to the article: "The critical point here is that the subsidies will significantly offset the premium increases for the majority of people buying insurance individually. "
*individually* Meaning, not the non-group people. What was the point of your post again?
To point out that this legislation won't raise the out-of-pocket costs for the majority of the health care insurance market while expanding coverage and access for those who need it?
Just because someone is receiving a subsidy doesn't mean the cost has gone down. It means someone else is paying for it.