Unbiased Estimate: The Cost of Health Insurance Reform

By Meredith Ledford on February 20th, 2010
Health Insurance

Although most Americans are in agreement that something should be done to change the current health insurance system, there is no consensus on how the health insurance system should be reformed. Some say that we should provide everyone with coverage first, while others argue that we should begin by bringing down the cost of health insurance premiums.

Regardless of the proposed reform tactics, many want to know how much reform may cost. In an economy that is already facing massive deficits and unemployment in the double digits, the cost of health insurance reform may become important.

Estimates on the cost of health care reform fluctuates--some groups overestimate the cost, while others underestimate the cost. So you may be asking yourself, who should I believe and where should I go to get unbiased information?

The best source may be the Congressional Budget Office (CBO). The CBO is the "score-keeper" that both Republicans and Democrats use to analyze the effectiveness and cost of any proposed legislation.

In fact, President Obama's 2010 State of the Union Address mention of the CBO, as the independent score keeper of legislation, got a standing ovation from both sides of the aisle.

So what does the CBO say about current health reform bills?

  • Increases Coverage: The CBO estimates that the House bill may result in health care coverage for 96% of Americans. This could lead to a reduction in the cost of uncompensated care--the care you pay for the uninsured through increased taxes and higher health insurance premiums--and may result in lower costs for everyone and a savings for the economy
  • Decreases Your Cost: According to the CBO, your personal savings may come in the form of reduced premiums, caps on what you spend out of pocket, no co-pays for preventive health services, no annual caps on what insurance companies pay, and the provision of premium subsidies if you need help paying for coverage
  • Does Not Add to the Deficit: Although reform increases coverage to the many who currently don't have coverage, the CBO estimates that the reform policies currently proposed do not add to the federal deficit
  • Provides Savings to Business: The CBO estimates that health insurance premiums for small businesses are likely to drop by 1%-4% under the proposal because of lower prices. For large businesses, the CBO estimates that premiums may drop by $100 for an individual health insurance policy and by $200 for a family health insurance policy

According to non-partisan estimates, health care reform has the potential to provide savings to the backbone of our economy (small businesses), provide coverage to the most vulnerable Americans, decrease your health insurance cost, and not add to the deficit. Be sure you know what type of health insurance you want and need before reform comes down the pike--get a free health insurance quote from multiple providers.

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