Individuals who purchase health coverage through an “exchange” in the Senate Democrats’ health care bill would pay higher premiums than they would under current law for their plans, but new subsidies would offset the increased costs for more than half those people, according to a new analysis.
A Congressional Budget Office (CBO) reading of the Senate’s measure also indicates that part of the reason for the higher premiums is that proposed regulations in the bill would force insurance companies to offer a greater level of coverage in the plans they sold.
According to CBO, however, “the majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies . . . would cover nearly two-thirds of the total premium.”
According to the analysis, once the bill’s programs were fully implemented in 2016, people buying insurance plans individually on the exchange would pay 10 percent to 13 percent more per person than they would under current law. But some 57 percent of people on the exchange would get subsidies in the form of tax credits, and on average those individuals would actually pay 56 percent to 59 percent less for their premiums than they would otherwise.
The average premium for those buying through the exchange would be $5,800 for a single plan, or $15,200 for a family plan.
When the Tylenol kicks in, I am going to try reading it again because there is more to this report than that 10-13% increase. As far as I can assess right now, small businesses (50 employees and less), and individual policy buyers get hurt more than large corporations. Imagine that.
Nongroup Policies CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law. About half of those enrollees would receive government subsidies that would reduce their costs well below the premiums that would be charged for such policies under current law.
Employment-Based Coverage
The legislation would have much smaller effects on premiums for employment-based coverage, which would account for about five-sixths of the total health insurance market. In the small group market, which is defined in this analysis as consisting of employers with 50 or fewer workers, CBO and JCT 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). In the large group market, which is defined here as consisting of employers with more than 50 workers, the legislation would yield an average premium per person that is zero to 3 percent lower in 2016 (relative to current law). Those overall effects reflect the net impact of many relatively small changes, some of which would tend to increase premiums and some of which would tend to reduce them (as shown in Table 1).7
