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October 12, 2009

Health Insurance Industry attacks Baucus bill

Rick Moran
I somehow wish they had gone after the House bills which are much more radical and dangerous to liberty.

But I think they figured the Baucus bill had a chance to become a template for the entire reform measure so they probably picked the right target.

A group called America's Health Insurance Plans issued a report that skewers the Baucus bill and exposes it as a cost raiser, not a cost saver for insurance.

Robert Pear in the New York Times:

"The overall impact will be to increase the cost of private insurance coverage for individuals, families and businesses above what these costs would be in the absence of reform," said Karen M. Ignagni, president of the trade association.

Democratic aides on the Finance Committee disputed the conclusion. They said the bill would provide tax credits to millions of people to help them afford coverage. Moreover, they said, people could keep the coverage they now have if they wanted. In addition, they said, some provisions of the bill would reduce the administrative costs of insurance.

Ms. Ignagni cited a report done last week for her organization by PricewaterhouseCoopers, the accounting firm.

The report says that the cost of the average family coverage, now $12,300, will rise to $18,400 in 2016 under current law and to $21,300 if the Senate bill is adopted. Likewise, it said, the cost of individual coverage, now $4,600, will average $6,900 in 2016 under current law and $7,900 under the bill.

The study provides ammunition to Republicans attacking the legislation and might intensify the concerns of some Democrats who worry that the bill does not provide enough help to low- and middle-income people to enable them to buy insurance.

We've seen similar numbers from the Heritage Foundation and others. And this is why the CBO estimate of this bill is so bogus.

As in every single state that has adopted a mandate for insurance and a tax credit to buy it, the subsidy has gone up uncontrollably as insurance has become more expensive. A subsidy to a family that would allow them to purchase a policy for $12,300 a year will nearly double in less than a decade.

The CBO assumes a far more modest increase in the subsidy. Hence, you may as well tack on $200 billion dollars more to the cost of the bill over a decade. And that's just for the subsidy. No telling if their "cost savings" will come close to what they are predicting, or revenue projections from taxes will hit the mark either. Just being off a few percentage points on both could significantly increase the cost to taxpayers.

It's all smoke and mirrors anyway. That's because no one has ever tried initiating such a gargantuan government program. Social Security and Medicare grew gradually over the decades. But this will be tossed into our laps in one, big chunk - with results to our economy that no one can predict.





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