tazzygirl
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FactCheck already did there story back in Feb.
It all started with Alexander’s remarks, when he said the president’s proposal, much like the Senate bill on which it is largely based, would increase premiums:
Alexander: For millions of Americans, premiums will go up because those — when people pay those new taxes, premiums will go up — they will also go up because of the government mandates.
Later, Obama took on that claim directly, saying that Alexander was wrong.
Obama: No, no, no. And this is an example of where we’ve got to get our facts straight. … So let me respond to what you just [said] Lamar, because it’s not factually accurate. Here’s what the Congressional Budget Office says. The costs for families for the same type of coverage as they’re currently receiving would go down 14 to 20 percent.
Actually, both men were misleading.
What CBO said (see Table 1) is that for those who are in group policies, there would be no significant change in premiums, compared with what would be paid under current law. For those in large groups, there would be somewhere between no change at all and a 3 percent decrease in premium cost. For small groups, the change could fall between a 1 percent increase and a 2 percent decrease.
The only significant increases would be seen by those who buy their policies individually, CBO said. For those persons, the average premium per person would be between 10 percent and 13 percent higher
Alexander was technically correct when he said premiums would go up "for millions." CBO figured that 32 million persons would fall into the nongroup market by 2016, should the Senate bill become law. What he didn’t mention is that they would make up only 17 percent of workers covered by private insurance. And he didn’t mention these costs would go up because benefits would improve in the nongroup market.
The senator was correct when he cited "mandates" as one cause for the increase – but that’s not the only reason premiums go up. The bill would require plans to have a standard level of benefits. However, most of those buying their own coverage would receive subsidies that would prompt them to buy more expensive plans than they normally would. CBO said "the average insurance policy in this market would cover a substantially larger share of enrollees’ costs for health care (on average) and a slightly wider range of benefits." People would basically use money from the government to buy themselves a nicer plan than they would if they were only using their own money. CBO said well over half of those buying individual policies — 57 percent — would get government subsidies "that would reduce their costs well below the premiums that would be charged for such policies under current law."
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One last point: Alexander said “taxes” would also cause premium costs to go up – but that’s not really the case, according to CBO. Paradoxically, CBO predicts that the Senate bill’s excise tax on high-cost health plans would actually bring premium costs down. That’s because the tax would induce employers and employees to choose lower-cost plans with less coverage, to avoid being hit by the tax. CBO said the average premium for those affected by the tax would be 9 percent to 12 percent lower. The bill also includes some taxes on medical device manufacturers and drug importers; CBO found those taxes would have a less than 1 percent effect on premium costs.
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Republican Rep. Charles Boustany of Louisiana claimed that the House GOP health care bill would bring down health insurance premiums:
Boustany: We put forth a plan earlier in the year, during the debate, that actually the Congressional Budget Office showed that it brings down the cost of premiums up to about 10 percent. And, actually, for individuals seeking — and families seeking insurance in the individual market, those cost savings could even be higher.
It’s true that the CBO found that health care premiums for those in the small group market would decrease between 7 percent and 10 percent by 2016. But the small group market accounts for just 15 percent of premiums, according to the CBO. It estimated smaller drops for other segments of the private market. For example, premiums in the individual market, which accounts for just 5 percent of the private market, would go down between 5 percent and 8 percent, CBO said. The other 80 percent of premiums, which make up the large group market, may go down by as much as 3 percent, CBO said, but may actually stay the same as under current law.
http://www.factcheck.org/2010/02/health-care-summit-squabbles/
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