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Where’s the $2,500 Savings Obama Promised?

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Unread 07.24.09, 11:25 AM
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Where’s the $2,500 Savings Obama Promised?

On 07.24.09 06:42 AM posted by Robert Book

Throughout his campaign, then-candidate Obama repeatedly made two promises about health care reform: that if you like your current health plan, you could keep it—and that it would cost about $2,500 per year less. Obama made this pledge on his campaign web site, in the second presidential debate, and in the third debate, :
If you have health insurance, then you don’t have to do anything. If you’ve got health insurance through your employer, you can keep your health insurance, keep your choice of doctor, keep your plan. … And we estimate we can cut the average family’s premium by about $2,500 per year.

One continuing theme in the current health care debate has been over whether you will actually be able to keep your plan if any of the current bills in the House or Senate pass.

But what about the $2,500 in savings?

There is nothing in any of the current health care reform proposals that would produce anything like that savings, or even any savings at all. In fact, we’re finding*just the opposite.

A study by John Shiels and Randy Haught of The Lewin Group estimates that the average private insurance premium—the cost of the health insurance you have right now—will actually go up, not down, costing the average working family $460 a year more. That figure accounts only for cost-shifting that they assume will occur because the new “public plan” will pay doctors and hospitals less than they receive now from private insurers, and in some cases less than the cost of providing health care service. In reality, the cost increase might be much higher, because a new “Health Choices Commissioner” will have the authority to mandate coverage of more services than your current plan – in which case you will not be able to keep your plan, and the plan with that extra coverage will necessarily come with a higher premium.

The closest the House bill (H.R. 3200) comes is to provide some income-based subsidies to purchase health insurance. These would apply only to those who both don’t have employer-sponsored insurance and who have incomes below four times the federal poverty level. They are designed to limit the percentage of income that an eligible family would spend on the “basic” government health insurance package in the new “public plan,” to 1.5-11 percent of income, depending on how close the family is to the federal poverty level. But this is not for the insurance you have now, it’s for government-run insurance “standard” insurance package (similar to Medicare, only with much higher premiums). And the subsidy is not “savings for the average family”; it is just shifting part of the cost of insurance from some families to other families—the ones who pay the taxes necessary to fund the subsidies.

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