WASHINGTON, D.C. – An analysis released by the Congressional Budget Office (CBO), yesterday affirms that H.R. 3200, the America's Affordable Health Choices Act, would offer targeted assistance to those in need today and lead to an increase in employer-sponsored health insurance coverage.
The analysis was developed in response to questions by House Republicans and offers further evidence that several of the leading claims being made by opponents of health reform are unfounded. In addition to confirming that H.R. 3200 will increase the number of Americans receiving employer-provided care, CBO also reinforces that the vast majority of Americans will be in private, employer-sponsored coverage, and that of the Americans who enter into the health insurance exchange, the majority will choose to enroll in private plans.
The analysis was developed in response to questions by House Republicans and offers further evidence that several of the leading claims being made by opponents of health reform are unfounded. In addition to confirming that H.R. 3200 will increase the number of Americans receiving employer-provided care, CBO also reinforces that the vast majority of Americans will be in private, employer-sponsored coverage, and that of the Americans who enter into the health insurance exchange, the majority will choose to enroll in private plans.
“This analysis is proof that our bill will meet President Obama’s direction to build on what works in our current system and fix what’s broken,” said U.S. Reps. Henry A. Waxman (D-CA), Charles Rangel (D-NY) and George Miller (D-CA), the Chairman of the House Committees on Energy and Commerce, Ways and Means and Education and Labor. “It reinforces that we are on track to delivering reforms that will reduce costs for American consumers and businesses, ensure access to quality, affordable health insurance for all and give Americans the peace of mind of knowing their coverage can never again be denied or taken away.”
The analysis confirms that provisions in H.R. 3200, such as the individual and employer responsibility requirements, retaining the tax benefit for employer-sponsored insurance, and the targeted income-related structure of affordability credits would result in dramatically increased coverage without crowding out private insurance.
The analysis specifically refutes estimates released by the Lewin Group, a research firm funded by one of the nation’s largest insurance companies, that significantly exaggerate the number of Americans who would enter into the public health insurance option.
Some key excerpts from the CBO letter:
INCREASE IN EMPLOYER SPONSORED INSURANCE COVERAGE. “We estimate that about 12 million people who would not be enrolled in an employment-based plan under current law would be covered by one in 2016, largely because the mandate for individuals to be insured would increase workers’ demand for insurance coverage through their employer.”
MEDICAID COVERAGE DOES NOT CROWD OUT PRIVATE HEALTH INSURANCE. “CBO does not anticipate a substantial shift from private insurance to Medicaid. Specifically, we estimate that about 1 million people who would otherwise have employment-based insurance or individually purchased coverage would end up enrolling in Medicaid in 2016.”
CBO REFUTES THE LEWIN ESTIMATE OF INFLATED PUBLIC OPTION ENROLLMENT AND CONFIRMS THAT THE PRIVATE PLANS WOULD BE DOMINANT IN MARKETPLACE. “For several reasons, we anticipate that our estimate of the number of enrollees in the public plan would be substantially smaller than the Lewin Group’s, even if we assumed that all employers would have that option.” [Note: CBO projects only about 10-11 million individuals in the public option by 2019]
WHILE THE CBO LETTER INDICATES THAT THEY ARE NOT CERTAIN OF THE HOUSE PROPOSAL’S OVERALL AFFECT ON PREMIUMS, THEY NAME SEVERAL FACTORS THAT THEY EXPECT WILL LEAD TO DECREASED COSTS FOR THE AVERAGE CONSUMER (E.G. ENCOURAGING HEALTHY CONSUMERS TO PURCHASE INSURANCE, REDUCING THE “COST SHIFT” OF THE UNINSURED, AND REFORMS TO MEDICARE). "The resulting pool of enrollees would be somewhat healthier, on average, than is the pool of enrollees in employment-based insurance today; as a consequence, the average cost of covering those enrollees would be several percent lower than under current law (holding other factors equal).”
“The proposal would ultimately reduce the uninsured population by roughly two-thirds, which would greatly attenuate the pressure to shift costs that arises today when uncompensated or undercompensated care is provided to people who lack health insurance. One recent estimate indicates that hospitals provided about $35 billion in such care in 2008—an amount that would grow under current law but would be expected to decline considerably under the proposal.”
“In addition to proposed changes in Medicare’s payment rates, the proposal would also alter some of Medicare’s payment methods—or at least test such changes—which might ultimately reduce private insurance costs to a limited degree… To the extent that future steps to implement such changes in a more aggressive way also changed how doctors treated privately insured patients, some benefits could “spill over” to the private sector.”
CREATING MORE CHOICES FOR WORKER. “Increasing the availability of health insurance…might also encourage other workers to take jobs that better match their skills, because they would not have to stay in less desirable jobs solely to maintain their health insurance.”
For more information on the bill, including bill text, summary, information on revenue provisions, and fact sheets on the reform provisions in the bill, click here.
The analysis confirms that provisions in H.R. 3200, such as the individual and employer responsibility requirements, retaining the tax benefit for employer-sponsored insurance, and the targeted income-related structure of affordability credits would result in dramatically increased coverage without crowding out private insurance.
The analysis specifically refutes estimates released by the Lewin Group, a research firm funded by one of the nation’s largest insurance companies, that significantly exaggerate the number of Americans who would enter into the public health insurance option.
Some key excerpts from the CBO letter:
INCREASE IN EMPLOYER SPONSORED INSURANCE COVERAGE. “We estimate that about 12 million people who would not be enrolled in an employment-based plan under current law would be covered by one in 2016, largely because the mandate for individuals to be insured would increase workers’ demand for insurance coverage through their employer.”
MEDICAID COVERAGE DOES NOT CROWD OUT PRIVATE HEALTH INSURANCE. “CBO does not anticipate a substantial shift from private insurance to Medicaid. Specifically, we estimate that about 1 million people who would otherwise have employment-based insurance or individually purchased coverage would end up enrolling in Medicaid in 2016.”
CBO REFUTES THE LEWIN ESTIMATE OF INFLATED PUBLIC OPTION ENROLLMENT AND CONFIRMS THAT THE PRIVATE PLANS WOULD BE DOMINANT IN MARKETPLACE. “For several reasons, we anticipate that our estimate of the number of enrollees in the public plan would be substantially smaller than the Lewin Group’s, even if we assumed that all employers would have that option.” [Note: CBO projects only about 10-11 million individuals in the public option by 2019]
WHILE THE CBO LETTER INDICATES THAT THEY ARE NOT CERTAIN OF THE HOUSE PROPOSAL’S OVERALL AFFECT ON PREMIUMS, THEY NAME SEVERAL FACTORS THAT THEY EXPECT WILL LEAD TO DECREASED COSTS FOR THE AVERAGE CONSUMER (E.G. ENCOURAGING HEALTHY CONSUMERS TO PURCHASE INSURANCE, REDUCING THE “COST SHIFT” OF THE UNINSURED, AND REFORMS TO MEDICARE). "The resulting pool of enrollees would be somewhat healthier, on average, than is the pool of enrollees in employment-based insurance today; as a consequence, the average cost of covering those enrollees would be several percent lower than under current law (holding other factors equal).”
“The proposal would ultimately reduce the uninsured population by roughly two-thirds, which would greatly attenuate the pressure to shift costs that arises today when uncompensated or undercompensated care is provided to people who lack health insurance. One recent estimate indicates that hospitals provided about $35 billion in such care in 2008—an amount that would grow under current law but would be expected to decline considerably under the proposal.”
“In addition to proposed changes in Medicare’s payment rates, the proposal would also alter some of Medicare’s payment methods—or at least test such changes—which might ultimately reduce private insurance costs to a limited degree… To the extent that future steps to implement such changes in a more aggressive way also changed how doctors treated privately insured patients, some benefits could “spill over” to the private sector.”
CREATING MORE CHOICES FOR WORKER. “Increasing the availability of health insurance…might also encourage other workers to take jobs that better match their skills, because they would not have to stay in less desirable jobs solely to maintain their health insurance.”
For more information on the bill, including bill text, summary, information on revenue provisions, and fact sheets on the reform provisions in the bill, click here.
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