Jonathan Gruber, PhD, a MIT Economist who has been closely following the health insurance reform process, issued a compelling new report based on data from the non-partisan Congressional Budget Office. As the Politico wrote, "The report concludes that under the Senate’s health-reform bill, Americans buying individual coverage will pay less than they do for today's typical individual market coverage, and would be protected from high out-of-pocket costs." Here are some key points:
Gruber concludes that the Senate proposal's health insurance exchange, choices and competition, and policies to hold insurers accountable would reduce costs. Savings for people purchasing coverage in the individual market would range from $200 to 500 for individuals and families, and would be greater if people opted for basic benefits. People with low incomes would receive premium tax credits that would reduce the price that they pay for health insurance by as much as $2,500 to $7,500 in 2009 dollars.
Two charts based on his report illustrate these savings:
The coverage Americans get under the Senate plan would be better than today's typical individual market coverage. For example, it would protect individuals from high out-of-pocket costs, meaning Americans would pay less premiums for more coverage. If instead Americans chose basic benefits similar to those offered in the individual market today, they would pay almost 20 percent less.
As Gruber concludes:
Analysis of the non-partisan information from the CBO suggests that for those facing purchase in the non-group market, the House bill will deliver savings ranging from $200 for singles to $500 for families in today’s dollars – even without subsidies. The savings are much larger for lower income populations that receive premium credits. This is in addition to the higher quality benefits that those in the exchange will receive, with actuarial values for low income populations well above what is typical in the non-group market today. It is also in addition to all the other benefits that this legislation will deliver to those consumers – in particular the guarantee, unavailable in most states, that prices would not be raised or the policy revoked if they became ill.
Nancy-Ann DeParle is Director of the White House Office of Health Reform