CBO: Obamacare Will Raise Insurance Premiums Even More than Before
Rea Hederman /
On Friday, the last day before a long weekend due to Columbus Day and on the eve of the Finance Committee vote, the Congressional Budget Office revealed some new information about the affect of the Baucus plan on premiums for health insurance. Surprise! After the Senate Finance Committee worked on the bill, health insurance will now cost individuals and families even more than the Congressional Budget Office originally estimated. On September 22, 2009, the CBO estimated that the average premium for a single plan was $4,700 to purchase the Silver plan. Last Friday, the CBO upped their estimate by 6% to $5,000 for the same plan in the same year . Families would also see a $300 increase in health premiums from $14,700 to $15,000.
The reason for the premium increases are because businesses pass on costs and fees to businesses and customers. As the Finance Committee added more taxes to the bill, the insurance cost to many families increased. The finance committee also lowered the out of pocket premium payments for those making less than 300% of poverty. For example, a family of four with $42,000 in income would now pay $2,600 instead of $3,000 in health premiums. However, purchases of individual plans who make over three times the poverty rate will pay more under the revised Baucus plan as will families with over four times the poverty rate in income.
CBO still finds that the Baucus proposal would cause individuals who purchase single plans to pay 15-17% of their total income in health insurance if they earn between two and four times the poverty rate. Families would have to pay even more for group coverage spending 18-19% of their total family income for those with income between two and four times that of the poverty rate.
The CBO tables that were issued last Friday reveal how costs are shifted and increased during a committee markup. It is unfortunate that the new analysis was not released until the Friday before a holiday weekend, where it would go virtually unnoticed before the passage of the bill from Committee.