Varney falsely claimed that under Senate bill, cost of employer-sponsored coverage would rise without subsidies
Research ››› ››› JUSTIN BERRIER
On Fox News' America's Newsroom, Stuart Varney misrepresented an analysis by the Congressional Budget Office (CBO) to falsely claim that under the Senate health care bill, the cost of "your employer-provided health care would not go up, only because of the subsidy from the government." In fact, the CBO found that in 2016, premiums for employer-sponsored insurance in the large-group and small-group markets would remain stable without subsidies under the Senate bill.
Varney claimed "the subsidy from the government" keeps premiums of employer insurance stable under Senate bill
From the December 1 edition of Fox News' America's Newsroom:
VARNEY: The CBO makes two assumptions. That's what health care reform finance is based upon. Assumption number one: that politicians will indeed cut $400 billion out of Medicare. That would mean cramming down on hospitals and doctors, the end of Medicare Advantage, and fewer tests like mammograms or pap smears. The assumption is that the politicians would indeed cut that $400 billion. Assumption number two: that there will be $450 billion worth of subsidies to you for the cost of your health care that you get from your employer. In other words, the assumption is that the government would take in billions, hundreds of billions of dollars from a raft of new taxes and pass it out to people who are gonna be subsidized for their employer-provided heath care. Those are the two assumptions on which everything is based. If those two things happen, yes, it will be deficit-neutral, and, yes, your cost will be stable. But Bill, as you pointed out right up front, this fails the cost-cut test.
VARNEY: A raft of taxes, taking money in, vast amounts of money, from a variety of different sources, all paid into the central government, which would then funnel it out in subsidies to individuals with employer-provided health care. So the cost to the individual from your employer-provided health care would not go up, only because of the subsidy from the government, and that's only because of these massive new taxes.
In fact, CBO found premiums for employer-sponsored insurance remain stable without subsidies
Premiums could decrease for those in group coverage. In its November 30 analysis, the CBO estimated that for large-group insurance -- which it said would comprise 70 percent of the total insurance market in 2016 -- "the legislation would yield an average premium per person that is zero to 3 percent lower in 2016 (relative to current law)." In the small-group market, "which consists of employers with 50 or fewer workers, CBO and JCT [Joint Committee on Taxation] estimate 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)" before accounting for any subsidies "stemming from the small business tax credit."
Most subsidies will go to those purchasing nongroup coverage, none to large group. The CBO estimated that 57 percent of individuals with nongroup coverage would receive subsidies in 2016, versus 12 percent in small-group coverage, "stemming from the small business tax credit," and none in large-group coverage, which would make up 70 percent of the insurance market in 2016. From the CBO analysis:
Subsidies hold down costs for many purchasing insurance individually. The CBO estimated that premiums in the nongroup market would increase 10 to 13 percent in 2016, before subsidies, because the average plan would "cover a substantially larger share of enrollees' costs for health care (on average) and a slightly wider range of benefits." CBO further stated that "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 estimate. Thus, 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."