NASE Blogs

CBO Confirms Health Coverage Will Cost More After Reform [Commentary]

Nov 30, 2009

Posted by Kristie Arslan - I hope all of you were able to stomach your Thanksgiving dinner after taking a look at the Patient Protection and Affordable Care Act (H.R. 3590). This legislation is the result of Senate leadership's effort to merge the Senate Finance and Senate HELP Committee's proposals for health reform.  

The Senate moved the ball forward on health reform with a successful procedural vote prior to the holiday allowing for the debate on health reform and H.R. 3590 to occur this week. Debate is expected to be a lengthy process which will result in long days and late nights for Senators and staff. Some even speculate that the Senate will likely work through the holidays and into January prior to a final vote.

What will the final Senate health reform bill look like? It is anyone's guess considering the obstacles Senator Reid faces in gaining consensus. In addition to the political issues swirling around the bill on such items as the public option and abortion, expect to see offered an array of amendments, all of which may improve or further worsen the legislation.

With jobs and the economy a constant focus of legislators and the Administration, I find it astonishing that no one seems to care that the business community is defecting en masse, with almost all of the major business organizations and associations opposing the direction Congress is taking on reform. If the goal of reform is to improve the economy and help the business community get out from under suffocating health care costs in order to be able to prosper and create jobs, then why isn't anyone listening to them?

As we have expressed here at the NASE over and over again, we have real concerns that reform will ultimately increase the cost of health care for the self-employed. This belief has recently been validated by the Congressional Budget Office which looked at the affect of the Patient Protection and Affordable Care Act on health insurance premiums.   

According to CBO, "average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law." Thus, after reform those in the individual market such as the self-employed would be paying anywhere from 10 percent to 13 percent higher in premium costs than they would if we did nothing to the current health care system. 

Wait a second...isn't the point of reform to lower health costs, not increase them?  Guess not!

The reason for the higher costs is the new benefit requirements in the Senate bill. No longer will certain coverage options be, well, optional. For example, treatments for substance abuse and mental health issues will be required in all insurance policies. Individuals will be required to buy health insurance policies with more expansive benefits, adding to the cost of coverage. 

Meaningful coverage is important, but cost is key for small business and the self-employed. It seems Congress has swung that delicate pendulum between cost and coverage too far to the left, leaving over 22 million self-employed entrepreneurs with higher health costs post reform.