Fact or fiction? Little change in premium costs

Claim: The Senate bill would scarcely make any difference in the cost of most people's premiums.

The insurance reform bill that the Senate is debating this week would create a complex system of purchasing exchanges, taxpayer subsidies, new coverage requirements, and new mandated minimum benefits. But it is likely to have very different effects on different parts of the population. The pressing question for many Americans is: Will I end up paying more or less for my coverage? For the first time, Congress's nonpartisan scorekeeper, the Congressional Budget Office (CBO) this week offered its estimate of the Senate bill's effect on the cost of insurance premiums.

Fact or fiction?
Fact. The CBO concluded if the bill became law, 70 percent of the nonelderly population, 134 million people, would be insured by large employers' policies. For this group, the Senate bill would have almost no effect on premiums. For a subset of this group, people enrolled in high-premium "Cadillac" plans, premium costs could decline by about 10 percent, CBO said. But most employers offering Cadillac plans would respond to the new tax on such plans by requiring "greater cost sharing (by employees), more stringent benefit management, or coverage of fewer services." "Stringent benefit management" means denying payment for certain procedures. The group getting the biggest premium reductions would be 18 million people in the individual market who'd get subsidies. For them, premiums would be as much as 60 percent lower. The subsidies would be paid for tax increases, fees, and cuts in Medicare spending.

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