Dec. 1 (Bloomberg) -- The Obama Administration hailed a
congressional report that predicted most Americans will pay no
more for insurance coverage under health-care legislation being
debated in the U.S. Senate.
On average, 134 million Americans insured through large
employers will see no rise in premiums and may pay 3 percent
less than they would if Congress failed to pass a health-care
overhaul plan, the nonpartisan Congressional Budget Office said
yesterday. Subsidies also will lower costs as much as 59 percent
for 18 million people buying their own insurance.
The agency released its analysis as the Senate began
debating the biggest revamp of U.S. health care in four decades.
Senator Evan Bayh, the Indiana Democrat who requested the study,
said it proves coverage can be expanded without boosting
expenses for those already insured. Republican leaders said
premiums will still rise for millions of Americans.
The numbers “came out better” for the Democratic
leadership “than I would have expected them to,” said Robert
L. Laszewski, an Alexandria, Virginia-based consultant to the
insurance industry. Still, there’s a difference between lowering
individuals’ insurance expenses and curbing the growth in
health-care spending, he said.
The legislation will provide “welcome relief on costs,”
said Dan Pfeiffer, a spokesman for President Barack Obama, on
the White House blog. The proposal calls for spending $848
billion over 10 years to add more than 30 million people to
insurance rolls.
Without Subsidies
The legislation would raise premiums by 10 to 13 percent
for 14 million people who buy their own coverage and make too
much for subsidies, the budget office found. The subsidies are
limited to people making as much as four times the federal
poverty guidelines, or $88,000 a year for a family of four.
This group would pay more because the legislation
establishes minimum coverage requirements, the budget office
said. Under the overhaul, insurers led by UnitedHealth Group
Inc. of Minnetonka, Minnesota, and WellPoint Inc., of
Indianapolis, would be mandated to cover items such as maternity
care and are banned from limiting lifetime or annual benefits.
The budget office found most who end up paying more will do
so voluntarily, said Pfeiffer, the White House spokesman.
“Where the CBO does see premiums rising, it’s not because
Americans are paying more for the same coverage,” he said.
“It’s that they’re making a choice to purchase better plans
that weren’t previously available.”
72 Percent of Services
People will buy policies paying 72 percent of covered
services, instead of a minimum 60 percent under the legislation
and typical now, the study found. Subsidies are tied to the 70
percent coverage.
The legislation, like a House-passed measure, would require
that Americans get health insurance or pay a penalty and set up
online exchanges for comparison shopping. The bills require
insurers to accept new customers, regardless of preexisting
conditions.
“What was the whole idea here?” said the No. 2 Republican
leader in the Senate, Jon Kyl of Arizona, in a speech on the
chamber’s floor. “The whole idea of health-care reform was to
reduce the cost of health care.”
Senator Mitch McConnell, of Kentucky, the top Republican in
the Senate, said a “bill that is being sold as a way to reduce
costs actually drives them up.â€
Laszewski, the consultant, said the study is only a partial
victory for Democrats because the issue of runaway health-care
costs is unresolved.
“If we don’t get costs down, those subsidies are going to
be meaningless before too long,” he said.
To contact the reporter on this story:
Alex Nussbaum in New York
anussbaum1@bloomberg.net .
