As debate began in the Senate on healthcare reform following the Thanksgiving recess, the Congressional Budget Office released on November 30 its much-anticipated analysis of the impact on healthcare insurance premiums should the proposed Senate healthcare reform bill–the Patient Protection and Affordable Care Act, introduced by Senator Harry Reid (D-Nevada) on November 18, 2009 as a substitute for the House reform bill, H.R. 3590–become law.
While the extensive CBO analysis, performed in conjunction with Congress’s Joint Committee on Taxation (JCT), warns that the “factors affecting premiums are complex and interrelated–and thus can be difficult to disentangle,” and also notes that it “does not incorporate potential effects of the proposal on the level or growth rate of spending for health care that might stem from increased demand for services” that could be produced by expanding healthcare insurance, it concludes that the impact on premiums for employer-sponsored plans would be minimal at most, while those who are in private plans would see an increase of 10% to 13%, prior to any government subsidies that those individuals would receive.
CBO writes in its analysis that the “average premium per person covered (including dependents) for new nongroup policies would be about 10% to 13% higher in 2016 than the average premium” for those policies in 2016 under current law (it is in 2016 that the provisions of the bill would be fully implemented). CBO also notes that “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.” In dollar terms, CBO said “average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.” These nongroup policyholders would account for 17% of the entire health insurance market by 2016, CBO says.