Right-wing media falsely claim that health care reform will increase premiums
Research ››› ››› TOM ALLISON
Right-wing media are using an exchange between President Obama and Sen. Lamar Alexander (R-TN) to falsely claim that the Senate health care bill would cause individual health insurance premiums to increase. In fact, the nonpartisan Congressional Budget Office estimated that the Senate's version of health care reform would result in lower premiums for most individual enrollees.
Malkin and Klein advance falsehood that premiums would increase under health care reform
Malkin: "[Sen.] Alexander was right on CBO saying Sen bill would hike premiums." From Michelle's Malkin's Twitter account, which linked to an American Spectator blog post by Philip Klein:
Klein: CBO estimated that individual and group plans would increase under Senate health care reform bill. From Philip Klein's American Spectator blog post:
By Philip Klein on 2.25.10 @ 11:08AM
Sen. Lamar Alexander has called out President Obama on claims that health care legislation would reduce premiums, noting that the Congressional Budget Office has estimated that premiums would be 10 percent to 13 percent higher in the individual market under the Senate bill than under current law.
The CBO report, which was released in November, found that in dollar terms, an individual policy would cost $5,800 and a family policy would cost $15,200 in 2016 if the Senate bill were enacted, compared with $5,500 and $13,100 under the status quo.
During the summit this morning, Obama argued that in exchange for paying more, Americans would be getting more generous insurance coverage. But the reason is that the Senate bill would impose so many new benefit mandates on insurance policies. In a free market, individuals should be allowed to buy more expensive insurance that offers more benefits, but the problem with the liberal approach is that it would force everybody to pay more, even people who may prefer to have lower premiums and less generous coverage.
Fact: CBO found bill would actually result in lower premiums for most individual enrollees
CBO: Premiums paid by most individuals would decrease. The CBO estimated that premiums paid by a majority of people insured on the individual market would decrease when factoring in federal subsidies that are included in the bill. CBO stated, "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 [Joint Committee on Taxation] 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." Conservative claims that the bill would increase premiums in the individual market are based on estimates that do not factor in subsidies. CBO stated that figures identical to those cited by conservatives "indicate what enrollees would pay, on average, not accounting for the new federal subsidies."
Washington Post's Ezra Klein: "CBO found health-care reform would reduce premiums." The Washington Post's Ezra Klein reported on Alexander and Obama's exchange in a February 25 post:
Lamar Alexander and Barack Obama just had a contentious exchange on this point, so it's worth settling the issue: Yes, the CBO found health-care reform would reduce premiums. The issue gets confused because it also found that access to subsidies would encourage people to buy more comprehensive insurance, which would mean that the value of their insurance would be higher after reform than before it. But that's not the same as insurance becoming more expensive: The fact that I could buy a nicer car after getting a better job suggests that cars are becoming pricier. The bottom line is that if you're comparing two plans that are exactly the same, costs go down after reform.
CNN's Velshi: "57 percent of those insured will see a government subsidy, which will bring the average premium down, actually." During CNN's coverage of the health care summit, Wolf Blitzer aired a portion of Obama's exchange with Alexander, and chief business correspondent Ali Velshi stated that Obama was "more right than Senator Alexander." Velshi stated, "The CBO, which is an independent -- independent of the political party -- says that rates will go up. But here's the reality: 57% of those insured will see a government subsidy, which will bring the average premium down, actually. It would be -- it would drive average premiums down 7 to 10 percent, but this is all based on assumptions."
Politifact: "CBO reported that, for most people, premiums would stay about the same, or slightly decrease." A January 27 PolitiFact.com analysis labeled the claim that health care reform would cause premiums for most Americans to increase "pants on fire" false and stated, "The CBO reported that, for most people, premiums would stay about the same, or slightly decrease." From PolitiFact.com:
On Nov. 30, 2009, the Congressional Budget Office, or CBO, released a detailed analysis on how health insurance premiums might be affected by the Senate Democrats' health care bill. The CBO is an independent agency whose estimates for pending legislation are considered nonpartisan and rigorous.
The CBO reported that, for most people, premiums would stay about the same, or slightly decrease. This was especially true for people who get their insurance through work. (Health policy wonks call these the large group and small group markets.) People who have to go out and buy insurance on their own (the individual market) would see rates increase by 10 to 13 percent. But more than half of those people -- 57 percent, in fact -- would be eligible for subsidies to help them pay for the insurance. People who get subsidies would see their premiums drop by more than half, according to the CBO. So most people would see their premiums stay the same or potentially drop.
CBO: Premiums in group market will not increase. CBO estimated that the large group and small group markets make up 83 percent of the insurance market and that those premiums will not increase.