Fox News' Major Garrett presented President Obama disagreeing with Sen. Lamar Alexander's falsehood that under the Senate health care bill "premiums go up because of the government mandate" and Rep. Paul Ryan's falsehood that the Senate bill "does not ... reduce the deficit" as a he-said, he-said debate. But the non-partisan Congressional Budget Office (CBO) supports Obama on both points.
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From the February 25 edition of Fox News' Special Report:
GARRETT: But Republicans brought serious complaints about insurance premiums, for example. And then, the sparks flew.
[start video clip]
SEN. LAMAR ALEXANDER (R-TN): Premiums will go up, and they will also go up because of the government mandates.
OBAMA: It's not factually accurate. The cost for families for the same type of coverage as they're currently receiving would go down 14 to 20 percent.
ALEXANDER: I believe, with respect, you're wrong.
[end video clip]
GARRETT: Republicans also pressed Mr. Obama on costs.
[start video clip]
REP. PAUL RYAN (R-WI) [video clip]: This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health care entitlement at a time when we have no idea how to pay for entitlements we already have.
[end video clip]
GARRETT: The president said current Democratic bills try to save in one instance by reducing what he called wasteful subsidies for Medicare Advantage, prompting an unexpected convergence.
CBO backs Obama: Bill would actually result in lower premiums for most enrollees
CBO: Premiums paid by most individuals would decrease. The CBO estimated that premiums paid by a majority of people insured on the individual market would decrease when factoring in federal subsidies that are included in the bill. CBO stated, "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 [Joint Committee on Taxation] 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." Conservative claims that the bill would increase premiums in the individual market are based on estimates that do not factor in subsidies. CBO stated that figures identical to those cited by conservatives "indicate what enrollees would pay, on average, not accounting for the new federal subsidies."
CBO: Premiums increase for some in nongroup market rise due to people buying more coverage. CBO found that the increase in average premiums in the nongroup market was due to people purchasing "a greater amount of coverage:
Average premiums would be 27 percent to 30 percent higher because a greater amount of coverage would be obtained. In particular, 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. Those expansions would reflect both the minimum level of coverage (and related requirements) specified in the proposal and people's decisions to purchase more extensive coverage in response to the structure of subsidies.
This increase would be partially offset by "a net reduction in costs that insurers incurred to deliver the same amount of insurance coverage to the same group of enrollees" and "a shift in the types of people obtaining coverage."
Washington Post's Ezra Klein: "CBO found health-care reform would reduce premiums." The Washington Post's Ezra Klein reported on Alexander and Obama's exchange in a February 25 post:
Lamar Alexander and Barack Obama just had a contentious exchange on this point, so it's worth settling the issue: Yes, the CBO found health-care reform would reduce premiums. The issue gets confused because it also found that access to subsidies would encourage people to buy more comprehensive insurance, which would mean that the value of their insurance would be higher after reform than before it. But that's not the same as insurance becoming more expensive: The fact that I could buy a nicer car after getting a better job suggests that cars are becoming pricier. The bottom line is that if you're comparing two plans that are exactly the same, costs go down after reform.
CNN's Velshi: "57 percent of those insured will see a government subsidy, which will bring the average premium down, actually." During CNN's coverage of the health care summit, Wolf Blitzer aired a portion of Obama's exchange with Alexander, and chief business correspondent Ali Velshi stated that Obama was "more right than Senator Alexander." Velshi stated: "The CBO, which is an independent -- independent of the political party -- says that rates will go up. But here's the reality: 57% of those insured will see a government subsidy, which will bring the average premium down, actually. It would be -- it would drive average premiums down 7 to 10 percent, but this is all based on assumptions."
PolitiFact: "CBO reported that, for most people, premiums would stay about the same, or slightly decrease." A January 27 PolitiFact.com analysis labeled the claim that health care reform would cause premiums for most Americans to increase "pants on fire" false and stated: "The CBO reported that, for most people, premiums would stay about the same, or slightly decrease." From PolitiFact.com:
On Nov. 30, 2009, the Congressional Budget Office, or CBO, released a detailed analysis on how health insurance premiums might be affected by the Senate Democrats' health care bill. The CBO is an independent agency whose estimates for pending legislation are considered nonpartisan and rigorous.
The CBO reported that, for most people, premiums would stay about the same, or slightly decrease. This was especially true for people who get their insurance through work. (Health policy wonks call these the large group and small group markets.) People who have to go out and buy insurance on their own (the individual market) would see rates increase by 10 to 13 percent. But more than half of those people -- 57 percent, in fact -- would be eligible for subsidies to help them pay for the insurance. People who get subsidies would see their premiums drop by more than half, according to the CBO. So most people would see their premiums stay the same or potentially drop.
CBO: Premiums in group market will not increase. CBO estimated that the large group and small group markets make up 83 percent of the insurance market and that those premiums will not increase.
CBO back Obama: Both health bills would reduce deficit
CBO: Senate bill yields "a net reduction in federal deficits of $132 billion" over 10 years. From CBO's December 19 cost estimate of the Senate bill incorporating the manager's amendment:
CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting the Patient Protection and Affordable Care Act incorporating the manager's amendment would yield a net reduction in federal deficits of $130 billion over the 2010-2019 period.
CBO expects Senate bill to continue deficit reduction during decade after 2019. CBO also estimated on December 20 that the bill will continue to reduce the deficit beyond the 10-year budget window that ends in 2019 "with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of GDP."
CBO also estimated the House bill will result in deficit reductions through 2019 and in the subsequent decade. From the November 6 CBO estimate:
According to CBO and JCT's assessment, enacting H.R. 3962 would result in a net reduction in federal budget deficits of $109 billion over the 2010-2019 period (see Table 1) [this estimate was later updated to $138 billion over the same period]. In the subsequent decade, the collective effect of its provisions would probably be slight reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.