NCPA - National Center for Policy Analysis

REPUBLICAN HEALTH PLAN WOULD REDUCE PREMIUMS, CUT DEFICIT

November 5, 2009

The Congressional Budget Office (CBO) Wednesday night released its cost analysis of the Republican health care plan and found that it would reduce health care premiums and cut the deficit by $68 billion over ten years.

The Republican plan does not call for a government insurance plan but rather attempts to reform the system by creating high-risk insurance pools, allowing people to purchase health insurance policies across state lines and instituting medical malpractice reforms.

According to CBO, the GOP bill would:

  • Lower costs, particularly for small businesses that have trouble finding affordable health care policies for their employees.
  • Decrease rates by 7 percent to 10 percent for this group, and by 5 percent to 8 percent for the individual market, where it can also be difficult to find affordable policies.
  • Have the smallest economic impact on the large group market that serves people working for large businesses that have access to the cheapest coverage; those premiums would decline by up to 3 percent.

The analysis, however, shows the Republican plan would do little to expand coverage:

  • The CBO found that under the Republican plan, insurance coverage would increase by about 3 million and that the percentage of insured non-elderly adults would remain at about 83 percent after ten years.
  • The House bill would increase coverage to an additional 36 million people, raising the number of insured to 96 percent.

How much will the Republican bill cost?

  • The CBO put the price tag for the GOP plan at $61 billion, a fraction of the $1.05 trillion cost estimate it gave to the House bill that lawmakers are set to vote on this weekend.
  • And the CBO found that the Republican provision to reform medical malpractice liability would result in $41 billion in savings and increase revenues by $13 billion by reducing the cost of private health insurance plans.

Source: Susan Ferrechio, "CBO: Republican health plan would reduce premiums, cut deficit," Washington Examiner, November 5, 2009.

For preliminary CBO analysis:

http://www.cbo.gov/ftpdocs/107xx/doc10705/hr3962amendmentBoehner.pdf 

 

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