CBO: Healthcare Overhaul Does Little To Decrease Premiums

Not so says an extensive study from the Congressional Budget Office. Policy holders in both large and small group plans would see almost no change, according to the 28-page report released today. That agency summarized its conclusions starkly: “CBO’s assessment is that the legislation would have minimal effects on private-sector premiums via cost shifting.” Moving obligations from private to public insurance support accomplishes nothing.

The news is a blow to the healthcare package and particularly the logic behind it. Proponents of the bill have argued that it will bring insurance to 32 million unemployed people and will create a more competitive market place for insurance companies. The implied promise is that taxpayers with insurance will be able to find lower-priced alternatives to their current plans.

The CBO report will sharply raise skepticism about the plan both in Congress and among the public. There is a suspicion the healthcare overhaul could lead to an increase in the national debt which is already over $12 trillion dollars at a time when tax receipts are undermined by a slow economy and the government is spending hundreds of billions of dollars to stimulate the economy.

The effects of the healthcare program are expected to phase in over the next decade with most of the benefits coming after the first few years. The fact of the matter is that government forecasts about almost any economic trend do not have a good track record, and even the most sophisticated economists believe that predicting results over a period of many years is at best a guess.

The CBO has punched a hole in the healthcare plan when it is already facing a number of other deflating arguments.

Douglas A. McIntyre