CBO’s estimates of the Senate bill’s impact on health insurance premiums

A newly released CBO report is great news for health reform supporters. While we expect opponents to distort its contents in coming days , a careful examination of CBO’s analysis finds that:

 Employees at small and large businesses would see lower premiums than under current law, even without factoring in new affordability tax credits for individuals and small business tax credits for employers.

A majority of individuals purchasing individual or family health insurance in the exchange would receive reductions of 56 to 59 percent in premiums below what they would pay under current law.

Average premiums would increase 10 to 13 percent for those who earn enough income to afford coverage on the individual market without subsidies.  CBO explains these projected premium increases by predicting that these Americans will select policies that cover a greater share of their costs and a wider range of benefits.

Interestingly, CBO does not analyze the impact of critical cost containment reforms already in the Senate bill. These provisions – comparative effectiveness research, payment reforms that reward quality and care coordination, preventative and primary care, and an Independent Medicare Commission – will be just beginning to have their impact in 2016, the year CBO chose to analyze. In the following years, these cost-saving provisions should drive down premiums even further.