Federal actuaries said that the Senate's health overhaul bill would result in higher health insurance premiums for many Americans, though they added that much of the increased costs would be defrayed by government subsidies.
Subsidies would ease premium hikes: study
The Congressional Budget Office and Congress' Joint Committee on Taxation said in a new report that in 2016 the individual insurance market would see the biggest increase—a potential 10% to 13% increase—even though most people would see a sizable reduction because of billions of dollars in federal subsidies.
About 57% of people who buy their insurance in the individual market would receive federal dollars, the CBO and the committee estimate, resulting in premiums that six years out would be almost 60% lower than if nothing were changed.
Senate Democrats highlighted what they see as a net lowering of premiums over time. “The analysis we received today indicates that whether you work for a small business, a large company or you work for yourself, the vast majority of Americans will see lower premiums than they would if we don't pass health reform,” Senate Finance Committee Chairman Max Baucus said.
Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for individuals and $15,200 for families under the Senate bill, compared with $5,500 and $13,100 currently.
Increases in premium costs for those who have employer-sponsored coverage would be much less, possibly reaching 3%, though many could see a slight decrease instead, the actuaries said.
Under the Senate bill, roughly 83% of Americans would have coverage sponsored by their employer, the CBO and Joint Committee on Taxation said. A proposed excise tax on high-premium insurance policies—the so-called “Cadillac plans”—is expected to drive those who have such plans into lower-premium options.
The analysis looks at how the market would be affected in 2016 when most of the provisions included in the bill have been implemented.
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