By The Way – Obama Was Wrong About Insurance Premiums

I linked to the ABC fact check, in an earlier thread – but did any of you click on it? Huh? I didn’t think so…

Times Online thought that this exchange between Obama and Lamar Alexander went badly for Alexander:

…Alexander made the fatal mistake of claiming that even Congressional Budget Office thought Obama’s healthcare reform plan would result in more expensive health insurance premiums.

Quite the opposite, interjected Obama, suddenly in his legal scholar element: the Budget Office said that premiums would fall, which would then inspire middle class families to purchase better, more expensive insurance policies. “This is an example of where we’ve got to get our facts straight,” he chided, in the tone you might use while encouraging a toddler to eat all his peas.

Alexander attempted a flustered response, before declaring that he would like to submit his rebuttal in writing at a later date, instead of “arguing in public”. Obama, now sounding like the leader that has been mostly absent from the White House for the past year, declined the offer. “I’d like to get this issue resolved before we leave today, because I don’t believe I’m wrong,” he said.

For the Democrats, it was a long overdue moment of victory.

Not so fast, according to the fact check:

Who is right?

Well, the CBO analysis does say, flatly, 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.”

Why are premiums going up?  CBO cites the combination of three factors:

1. Premiums would be 27-30% higher because coverage would be better. The law, for example, requires that all policies cover maternity care, prescription drugs, mental health & substance abuse and no denial of coverage for pre-existing conditions.
2. Premiums would be 7 to 10 percent lower b/c of changes to the way the individual market is structured.
3. Premiums would be 7 to 10 percent lower b/c of an influx of more people, many of them healthy, into the insurance market.

The net effect of those three factors: Premiums would be 10 to 13 percent higher for the average policyholders.

President Obama’s claim of premium reductions of “14 to 20 percent” comes from adding factors two and three. The problem: You can’t ignore factor one. That’s why CBO’s conclusion is that, on average, people in the individual market would see their premiums go up 10 to 13 percent. You can keep your old, less generous plan, but only until 2018.

But it doesn’t end there.

The bill also includes generous subsidies for families with incomes under $88,000.  Those who get taxpayer subsidies would see their out-of-pocket premium cost reduced by “roughly 56 to 59 percent.”  And 57 percent of those in the individual market would be eligible for subsidies.

What more: “CBO says its estimates include “a substantial degree of uncertainly.” Not even the wizards at CBO can say for certain what will happen to your premiums”. But we can safely guess that their estimates are going to be lower than the eventual reality.

So the Dems have a “moment of victory” because Obama is able to lie unflinchingly? I guess congratulations are in order. He sure fooled Times Online.

MORE fact checks at the GOP  blog.

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