Conservative media have cited a study by insurance company WellPoint to claim that under health care reform, younger people would face premium increases of up to 178 percent. However, that study did not take into account subsidies provided by legislation to assist those buying insurance, which the Congressional Budget Office (CBO) estimated would substantially lower premium costs for many individuals purchasing coverage on their own through the exchanges.
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Conservative media cite WellPoint study to attack health care reform
WSJ cited WellPoint to assert that it is "utterly disingenuous" to claim bill lowers costs. In a December 21 editorial, The Wall Street Journal asserted that "the White House's core claim ... that reform would reduce health costs for individuals and businesses" is "utterly disingenuous," and that "[t]he best and most rigorous cost analysis was recently released by the insurer WellPoint, which mined its actuarial data in various regional markets to model the Senate bill. WellPoint found that a healthy 25-year-old in Milwaukee buying coverage on the individual market will see his costs rise by 178%."
Karl Rove: "One study suggested" premiums "might go up as much as 178 percent for younger, healthier workers." On the December 21 edition of Fox News' Hannity, contributor Karl Rove criticized the bill as a "power grab" and said: "We've been promised premiums are going to go down. Every bit of evidence is now pointing towards a pretty conclusive increase in premiums for Americans, most particularly for younger, healthier individuals. Their premiums are going to go up. One study suggested that they might go up as much as 178 percent for younger, healthier workers."
Ingraham asked whether 178 percent increase is "change you can believe in." On the December 21 edition of Fox News' The O'Reilly Factor, guest host Laura Ingraham said: "We have a graphic I want us to put up on the screen. And I want to -- it's a cost analysis from -- by WellPoint. And they did an extensive cost analysis from -- about states across the United States. A healthy 25-year-old in Milwaukee, Wisconsin, is going to pay an increase in health premiums of 178 percent; small business owner in Richmond, Virginia, with eight employees of average health -- 23 percent increase; a 40-year-old couple with two kids in Indianapolis -- 106 percent increase in health care costs. Is this change you can believe in, [Democratic strategist] Tamara [Holder]?"
But study explicitly states estimates do not include "application of any subsidies"
WellPoint: "Percent increase shown before ... the application of any subsidies." In its December analysis, which examined the impact of the Patient Protection and Affordable Care Act on insurance premiums in Wisconsin, WellPoint stated that the 178 percent figure did not take into account "any adjustment for the increase in medical costs over time or the application of any subsidies." From the WellPoint study:
CBO: Senate bill would actually result in lower premiums for many individual enrollees
CBO: By 2016, vast majority of people would not see higher premiums under Senate bill. In a November 30 analysis of Senate Majority Leader Harry Reid's (NV) original Senate health care bill, CBO estimated that for the large-group market, which it said would make up 70 percent of the total insurance market in 2016, "the legislation would yield an average premium per person that is zero to 3 percent lower in 2016 (relative to current law)." Further, in the small-group market, which would make up 13 percent of the total insurance market in 2016, "CBO and JCT [Joint Committee on Taxation] estimate that the change in the average premium per person resulting from the legislation could range from an increase of 1 percent to a reduction of 2 percent in 2016 (relative to current law)." CBO has since issued an updated cost estimate of the Senate bill to incorporate the manager's amendment, which stated that "the effects on premiums of the legislation incorporating the manager's amendment would probably be quite similar."
Majority of individual buyers would receive subsidies that would, on average, lead to premium costs "roughly 65 percent to 59 percent lower" than under current law. CBO estimated that while the average premium per person in the nongroup market would be about 10 to 13 percent higher in 2016, "[t]hose figures indicate what enrollees would pay, on average, not accounting for the new federal subsidies. 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 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."
Major cost-saving measures kick in after 2016. CBO analyzed the impact on premiums for 2016, but as Jonathan Cohn noted on The New Republic's health care blog, "many of the cost-saving measures in the bill aren't expected to yield savings until after that date." The Washington Post's Ezra Klein similarly wrote:
CBO is looking at 2016, which is long before the delivery system reforms will have really begun working, or the excise tax will have started restraining the growth in premiums costs, or the Medicare Commission will be aggressively experimenting to bring down costs first in Medicare and then in the system more generally. These are the numbers, in other words, from a world in which none of the cost control efforts work. In that world, health-care reform still does an enormous amount to help 30 or 40 million people, and a bit to help tens of millions more.