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CBO: Most People Would Pay Less for Insurance Under the Senate Bill

November 30, 2009 - by Donny Shaw

The Congressional Budget Office is out with a somewhat mixed report (.pdf) on how the Senate health care bill would affect insurance premiums.

Essentially, the report found that premiums on the individual market would go up, on average, by between 10 and 13 percent. But for the majority of people on the individual market what they would actually have to pay for insurance would be 56 to 59 percent less than what they would have to pay under the current system. That’s because of new subsidies in the bill, which would be distributed to about 57 percent of people on the individual market.

But for the 43 percent of people on the individual market who earn above the subsidy cut off level ($43,320 for individuals and $88,200 for a family of four) the actual cost of buying insurance would go up by 10 to 13 percent.

The reason premiums would go up, according to the CBO, is that insurers would be required to provide a wider range of benefits and a higher level of coverage under the bill. The CBO found that those changes on their own would lead to a 27 to 30 percent increase in premiums, but that increase would mitigated by two other aspects of the bill — “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.”

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