Reports
Fact Sheet: CBO Report Confirms America’s Affordable Health Choices Act Delivers
07/27/2009
This weekend, the Congressional Budget Office (CBO) affirmed that America`s Affordable Health Choices Act would deliver targeted assistance to those in need today and lead to an increase in employer-sponsored health insurance coverage. The CBO analysis confirms that bill’s provisions would result in dramatically increased coverage without crowding out private insurance.
For key excerpts of the CBO letter, please see the release below released last night by the Tri-Committees (Energy and Commerce, Ways and Means, and Education and Labor). [Find out More]
Tri-Committees: CBO Affirms H.R. 3200 Provides Targeted Assistance, Supports Employer-Sponsored Coverage and Refutes Lewin Estimates
WASHINGTON, D.C. – In response to questions by House Republicans, the Congressional Budget Office (CBO) today affirms that H.R. 3200, 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. This conclusion reflects the bill’s goal and the President’s direction to build on what works.
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.
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: “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]
DECREASED COSTS FOR CONSUMERS: While the CBO letter indicates that CBO is not certain of the House proposal’s overall affect on premiums, the letter names several factors that should 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 WORKERS. “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.”
Click here to view the CBO letter
For more information on the health insurance reform bill, including bill text, summary, information on revenue provisions, and fact sheets on the reform provisions in the bill, click here.