Fox News' Emanuel advances Lieberman's dubious claim about public option increasing debt
Research ››› ››› DIANNA PARKER
On Fox & Friends, correspondent Mike Emanuel advanced the falsehood that a public option will increase the national debt by adopting Sen. Joe Lieberman's claim that it "could rack up major debt, sending the country into a recession worse than the one we're currently in." In fact, the Congressional Budget Office (CBO) found that health care bills with a public option reduce or have no major impact on the deficit; moreover, every proposed bill with a public option thus far has required enrollees to cover its costs through premiums, rather than have the plans be paid for through federal revenues.
Emanuel repeatedly advances Lieberman falsehood on public option, calls it an "interesting take"
From the November 9 edition of Fox News' Fox & Friends:
STEVE DOOCY (host): Clearly, Harry Reid is going to be involved in this, Mike Emanuel. Do we know what other senators could play a vital, pivotal role?
EMANUEL: Well, it's interesting. Senator Joe Lieberman, who is the independent from Connecticut, was on Fox News Sunday yesterday. And he had an interesting take about the public option. Let's take a listen.
LIEBERMAN [video clip]: If the public option plan is in there, as a matter of conscience, I will not allow this bill to come to a final vote, because I believe the debt can break America and send us into a recession that's worse than the one we are fighting our way out of today.
EMANUEL: And you may ask yourself at home, why is Joe Lieberman such a big deal? He is only one of 100 senators. Well, if Joe Lieberman agrees to join the Republicans on a filibuster, then guess what? Health care reform could be stuck in mud, if you will, and not go forward in the U.S. Senate -- guys.
EMANUEL: Senator Joe Lieberman's already saying that he will hold up health care if the government-run public option is in there, arguing another massive entitlement could rack up major debt, sending the country into a recession worse than the one we're currently in, guys.
But CBO has shown that a public option reduces or has no impact on the deficit
CBO estimated federal budget deficit reductions of $109 billion during first decade. CBO found that the health care reform bill that passed the House on November 7, the Affordable Health Care for America Act (H.R. 3962), "would yield a net reduction in federal budget deficits of $109 billion over the 2010-2019 period."
CBO said public option in HELP bill "did not have a substantial effect on the cost" projections for the bill. According to a July 2 analysis of the Senate HELP Committee bill, the bill "includes provisions regarding a 'public plan,' but those provisions did not have a substantial effect on the cost or enrollment projections, largely because the public plan would pay providers of health care at rates comparable to privately negotiated rates -- and thus was not projected to have premiums lower than those charged by private insurance plans in the exchanges."
Bills with public option require its costs to be covered by premiums, not federal funds
House, Senate health committee bills require premiums to cover costs of public plan. Although the Senate has not released the text of its compromise bill, both the House bill and the Senate HELP Committee bill require their public options to charge premiums sufficient to cover administrative costs as well as the cost of enrollees' benefits. The Senate Finance Committee bill did not include a public option.
From the Affordable Health Care for America Act, H.R. 3962:
SEC. 322. PREMIUMS AND FINANCING.
(a) ESTABLISHMENT OF PREMIUMS. --
(1) IN GENERAL.-The Secretary shall establish geographically adjusted premium rates for the public health insurance option --
(A) in a manner that complies with the premium rules established by the Commissioner under section 213 for Exchange-participating health benefits plans; and
(B) at a level sufficient to fully finance the costs of --
(i) health benefits provided by the public health insurance option; and
(ii) administrative costs related to operating the public health insurance option.
From the Affordable Health Choices Act as passed by the Senate Health, Education, Labor, and Pensions Committee:
5) PREMIUMS. --
(A) PREMIUMS SUFFICIENT TO COVER COSTS. -- The Secretary shall set premium rates in an amount sufficient to cover expected costs (including claims and administrative costs) using methods in general use by qualified health plans.
Bills' tax revenues are used to cover expansion of coverage, with or without public option
Senate Finance bill with no public option requires tax on high-cost plans to cover expansion of Medicaid and subsidies for lower- and middle-income Americans purchasing insurance. According to CBO's analysis of the Senate Finance Committee bill, the revenues from the excise tax and penalty payments, along with the savings from Medicare, would pay for the expansion of the Medicaid program and the subsidies to help certain lower- and middle-income Americans purchase private insurance through the exchanges.
House bill requires tax on high-income Americans to cover expansion of Medicaid and subsidies for lower- and middle-income Americans purchasing insurance. CBO's November 6 cost estimate of H.R. 3962 indicates that expanding Medicaid and providing subsidies for some families to purchase insurance through the exchanges would cost roughly $891 billion over 10 years. This cost is offset, in part, by revenues from a surtax on high-income Americans as well as savings from Medicare and other federal health programs. From CBO:
The estimate includes a projected net cost of $891 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $1,052 billion in subsidies provided through the exchanges (and related spending), increased net outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $167 billion in collections of penalties paid by individuals and employers. On balance, other effects on revenues and outlays associated with the coverage provisions add $6 billion to their total cost.
Over the 2010-2019 period, the net cost of the coverage expansions would be more than offset by the combination of other spending changes, which CBO estimates would save $427 billion, and receipts resulting from the income tax surcharge on high-income individuals and other provisions, which JCT and CBO estimate would increase federal revenues by $574 billion over that period.
CBO score of Senate HELP bill shows bulk of cost is for subsidies for lower- and middle-income Americans purchasing insurance. CBO's July 2 analysis of the Senate HELP Committee's bill, which includes a public option, shows that the subsidies to help certain low- and middle-income Americans purchase insurance through the exchange would cost around $723 billion.
Numerous media outlets reported Lieberman's claims
Media outlets run with Lieberman's baseless claims. The Associated Press, Politico, CNN.com, NBC News' First Read blog, The New York Times, and The Wall Street Journal have all uncritically reported Lieberman's stated rationale for saying he would join a filibuster of the Senate health care bill if it included an opt-out public option. By contrast, in an October 27 post to CBS News' Political Hotsheet blog, Stephanie Condon wrote: "Lieberman has said he opposes a public option because of the potential burden it could place on taxpayers. However, Democrats have crafted a public option that would be financed by premiums rather than federal funds."