CBO Report Shows ObamaCare Raises Premiums

December 3rd, 2009 Mike Gonzalez

Media coverage of the CBO scoring of Senate Majority Leader Harry Reid’s health care bill left out some of the fine print and heroic assumptions that were in the report. The Heritage Foundation believes they merit your consideration.

Premiums Rise

The media quotes the CBO as saying that ObamaCare would not make premiums rise for people who get their insurance through their job or other groups. This is mostly because millions of people would no longer receive coverage from their employer, and instead would buy insurance in the so-called “non-group” market that sells individual health plans. These would likely be older and sicker Americans.

While this transition could make premiums cheaper for those who would continue to receive health benefits through their workplace, they would likely see higher taxes down the road for subsidies that would be offered to people buying individual insurance, the CBO reports. And the CBO notes that other taxes imposed on medical device manufacturers, insurers and other providers would be passed onto consumers “in the form of higher premiums for private coverage.”

Additionally, the CBO said Sen. Reid’s health care bill would raise premium rates for people who buy it in the so-called “non-group” markets, and these increases would be 10 to 13 percent. So anyone who cites the CBO as saying Americans would not see their premiums jump assumes that employers will not dump their workers into an exchange where people get insurance individually.

There Is a Crowd-Out Effect

And that’s an assumption that goes too far. In fact, the CBO notes that roughly 6.4 million people who have work-based health coverage under the current law would lose it under Sen. Reid’s bill. That’s because some businesses would find it unaffordable to offer health care to their workers under the Reid bill. They’ll opt for paying the $750 fine and dumping their workers onto a health exchange. Many older and sicker employees would likely lose their job-based coverage, even if they like it, according to the CBO. Businesses would push these workers to get their health care in the “non-group” or individual market because it’s cheaper for companies. But as noted above, it’s not a better deal for the individuals.

Younger People Assumed to Fall in Line

At the other end of the spectrum, the CBO analysts make the assumption that younger, healthier workers are going to comply with the “individual mandate” in the bill. That’s the one that forces every American to buy health insurance or pay a fine (a provision whose constitutionality has been and will continue to be questioned). However, these younger workers will look at the option between a much more expensive, mandated health plan — providing benefits they don’t want or need — and a less expensive annual fine and be much more likely to forgo the health insurance plan and pay the fine. As the CBO reports, it’s the younger workers who are the biggest losers in this “reform.”

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  • Guest
    I am an Eastern European. I came to the U.S. in 1991 and it became my beloved home. I am very saddened by what has been happening to our country in recent months. This is the country we all looked up to for the last two hundred years, during and following each world war, Nazi atrocities, communist takeover of half of the world and murder of millions, Solidarity movement, and then the return of some normality to my neck of the woods in Poland.

    We looked up to the U.S. as the land of independent, self-reliant, creative, just, and generous people. The nation that not only mistrusted the government and bureaucracy, but also acted on this justified mistrust and limited the role of the government in the lives of its citizens. The nation that didn’t require IDs to be carried at all times and the nation that religiously enforced the freedom of speech.

    When I was growing up, my country was communist, although it nominally called itself socialist. Perhaps it was a hybrid. The government run the healthcare system. My mother is a doctor with two medical specialties. At the time, she was earning less than a skilled laborer. The healthcare system was so inefficient and wait lines were so long that one had to routinely bribe administrators and physicians to receive a timely care of basic quality. The innovation was rare and discouraged. Not many new treatments were developed. Many bright people decided against studying medicine, as it was no longer seen as an attractive profession.

    With a quiet node from FDR, it took communists about two years to complete the takeover of the entire country, starting in 1944. Communists/socialists relied on a brutal communist secret police to maintain the power. We lost thousands of patriots in executions and hundreds of thousands were imprisoned. Many escaped the country to never return. We fought the communists with arms until the early 1950s, and after that with underground political activities and resistance. This scenario played out around the world and in the end communists have killed or worked and starved to death over 200 million people, many times more than the Nazis. The victim count still continues in North Korea, Cuba, and several South American countries where large regions have been overrun by communist guerillas.

    Following the communist takeover of my country, the government not only began “managing” healthcare, but also confiscated/nationalized commercial and multi-family real estate, factories, banks, insurance companies, large farms, universities, schools, and other enterprises. As a result, the economy was permanently in the state of a near collapse. The government was pretty much the only employer and brave, decent people who voiced their opposition were fired and could no longer find employment, even if escaped imprisonment.

    The government controlled the prices, which discouraged innovation and risk-taking. The remaining tiny, privately owned businesses were constantly harassed by tax collectors and other enforcers of social justice. The government catered to the lowest classes, knowing that the middle class was still independent enough to pose a threat to the regime of ruthless, immoral thugs, who, of course, always claimed to have the best interest of the people on their minds. That's why my doctor mother was earning less than a brick layer. That's why the quality of manufactured goods was poor and why the streets were frequently dirty and publicly owned buildings unkempt. That’s why children of laborers received extra points during admissions to universities. That's how communists - or socialists - nearly destroyed morality, work ethics, personal responsibility, innovation, culture, arts, and an education system.

    History books were impossibly distorted and children underwent social indoctrination. Every new, oppressive law had a cheerful name that promised benefits and freedoms to the population. The pillars of a citizen society – the judicial system, law enforcement, armed forces, civic organizations, and local “elected” governments – all lost trust and respect of the people. Ruthless and immoral ruled and benefited, decent, active, and brave were persecuted. The naïve, inexperienced, and mostly young, who became attracted to the communist slogans, frequently paid the price by being targets of communist infighting and internal purges. Those who survived, mostly the ruthless, faced hate as traitors of their nation and its most cherished values.

    Solidarity – an anti-communist political movement disguised as a labor union – was born in the summer of 1980. Unlike the people of Iran today, we were lucky to have Ronald Reagan in the White House and John Paul II in Vatican. Both brave, wise people, who understood the destruction socialism and similar oppressive, demoralizing regimes caused to nations, families, and individuals.

    We all expected Soviet tanks to roll into Poland at any minute, as it happened on previous occasions in Hungary and Czechoslovakia. As I entered high school at fourteen, my co-ed scout troop collected bottles, gasoline, and cotton rugs to fight tanks, and medications and bandages, so that the girls could serve as nurses. On December 13, 1981, I woke up to a strange sound, which turned out to be tanks entering my street. They were Polish, as the Soviets forced the Polish communist regime to suppress the freedom dreams of the population. Several hundred people died resisting in the following days. My parents and I went into hiding for several weeks, as secret police kept arresting Solidarity activists like my mother. We returned home after the initial wave of arrests had passed and Solidarity appeared defeated.

    Nine years later, as the economy kept worsening and underground opposition continued, the communist grip on the nation weakened and first Solidarity leaders entered the Polish parliament. Soon after, other communist regimes began collapsing around the world, Lech Walesa became the Polish president, the Berlin Wall collapsed, and the Soviet Union imploded and disappeared. It took more than 200 million lives, but we rejoiced the end of communism. The Polish economy recovered and Poles began building busy, hard-working, and successful lives for themselves. We thought the world would never forget the atrocities, terror, and destruction of societies caused by socialism and communism. Or so it appeared.

    It took Stalin’s communists a couple of years to complete the takeover of my country and it’s economy. It took the current U.S. government only one year to take over the healthcare system, imbed itself into the financial system, become the owner of major industry sectors, and increase the “social justice” pressure on businesses and propaganda in the media. The SEIU and ACORN militias harassed business executives and their families in front of their homes with socialist chants within days of the current president winning the election.

    Until recently, I maintained an optimistic outlook on the future of the U.S., especially as I watched the awaking interest in the politics among Americans.

    The developments of the last few days, however, are making me increasingly worried. With every day bringing the news of the leftist federal government taking over yet another industry, the historical parallels are hard to escape. I hear the same sentiment from many of my friends, who grew up in communist countries. We are all increasingly alarmed, as we see the same tactics that communists utilized to kidnap our countries being applied in the U.S.

    The latest victims are the healthcare industry and the student loan industry, which was also quietly nationalized in the last few days, thus indirectly giving the government control over universities that receive loan monies. The uneducated, unproductive classes are being catered to at the expense of the middle class and business owners. Children are being indoctrinated in schools and families are being torn apart, just as in the Stalinist USSR, where families were the last lines of defense against the government. Just as in the Soviet Union, the children are encouraged to disobey and even report their parents to teachers, social workers, and police. Women are encouraged to divorce by tax-supported agencies, while there is not one tax-supported organization in the nation that helps save marriages in crisis for the sake of adults, children and society. Irresponsibility is rewarded, responsibility is taxed.

    History is no longer a fact, but a vague interpretation that serves social policy. Individualism is being shoved aside for the sake of social justice. Courts and police are increasingly working along the lines of political correctness and social or racial justice. Schools are admitting and promoting students based on their background as much as on their actual achievement. Frequently ruthless communist, environmental or homosexual activists are members of the government and develop public policy. A supporter of a NAMBLA activist serves as the School Safety Czar. A follower of Mao Tse Dong has a position in Obama’s administration. And a few days ago, Al Sharpton stated in a TV interview: "First of all, then we have to say the American public overwhelmingly voted for socialism when they elected President Obama."

    Does America really have to learn from its own mistakes? If we don’t learn from experiences of other nations, this country will end up as just a brief spark of light in the sad, oppressive history of the humanity. I feel we are approaching the point of no return, when this last bastion of individualism and entrepreneurship will be remade into an increasingly impoverished, socialist backwater run by bureaucrats dishing out and taking away privileges.

    Has America really forgotten what socialism and communism are?
  • dontpaytaxes
    Please, pass this around before the violence erupts! This is the last step before the revolution begins. Please, pass it around! Let's try and get millions of votes!!!!

    To: Congress, the House and the President

    Re: Taxes

    Sign this petition at:


    Over the past year, you’ve ignored the will of the people in many respects. You’ve pushed a monstrosity of a health care bill on us, which we’ve begged and pleaded you stop pushing. You’ve ignored the welfare and security of the people’s ability to find work and instead tossed them enough crumbs to get by through the intermittent passage of a UI bill that barely feeds a family of two, depending on where you live. You’ve pushed every possible anti-small business legislation in an order to crush the middle class and rich to help even out the dire needs of the poor. This is not America. This is class warfare, this is redistribution of wealth, this is tyranny and this is soon to be anarchy. In order to prevent anarchy, in order to prevent the violence and uprisings which we all feel are on the brink of happening, WE THE PEOPLE would like to present you with an alternative. The outcome of this alternative would end up keeping the peace, something we all want, something that is necessary to a civil society. This alternative would also help CONTROL the fanatical and power hungry desires of an out of control government. What is the alternative? Paying taxes. Or not paying taxes!

    The government needs OUR tax revenue for the overall general welfare of the country, which includes the upkeep of America’s infrastructure as well as the funding of our military, something we can all agree brings every man, woman and child protection. The problem that we all understand is that once this health care bill/education passes, among other anti-business bills such as cap and trade, the unionization of all businesses and other atrocious anti-business bills, NO AMOUNT of tax revenue will be enough to feed this out of control beast riddled with social program after social program. Just as Medicare costs were thought to be in the millions when the program first surfaced in the 60’s, in only a few short years we learned that the costs were potentially back bone breaking and today we have somewhere between 50 to 100 trillion in unfunded Medicare and social security liabilities. If it weren’t for the full faith and backing of the Chinese, Japanese and other countries who buy our treasuries and if weren’t for the productivity of the US worker whose pay check the government receives FICA taxes from, we’d had found ourselves in third world economic status in no time. But now that the government is taking away our economic freedoms, our ability to push this country forward without being swamped by social programs that tax us to death, now that the country is on the verge of losing its triple A bond rating, the possibility that those countries stop funding our liabilities is great. The fact that the US economy will be burdened by these bills and thus slow even more is no secret. And these problems equate to the death of the United States. It also means that no amount of tax revenue will keep our head above water and paying even a dollar in taxes will be a dollar wasted.

    So we come to you with this idea. Should you pass health care, should you continue to destroy the economic freedoms this country has enjoyed for two hundred plus years, we will not pay our taxes. If you think that you can control millions and millions of Americans through the IRS, then you’re sadly mistaken. Your IRS agents will be swamped with a convoluted mess of never ending paperwork, case loads and aggravation which means the revenue to the US government, which is drastically dropping due to the recession we’re in, will continue to drop and drop and drop. And let me assure you that soon enough, the US government won’t even have enough tax revenue to put gas in Air Force One.

    So we now present you with two options. The first, continue pushing through your despotic nonsense and chance losing the tax revenue of millions and millions of tax paying citizens. The second, come back to the center and start governing how WE THE PEOPLE want you to govern. I can assure you that should you choose the latter, the country will continue as it has for the past couple of hundred years but should you choose the former, you’re essentially risking civil unrest throughout the country, your political careers and potentially the life of this country. So I leave you with this… The choice is yours…. Choose wisely.

    Truly and Sincerely,

    The People of the United States

    If you would like to sign but don’t want to sign your own name, then sign “Susan B. Anthony” or “John Adams”. If an email is asked for, use ‘[email protected]’ or any other fake email. The point is to get as many signatures as possible. Thank you for your political patronage AND please, pass this around to anyone you think would be interested in signing it. Thank you!

    Sign this petition at:

  • Peggy McGilligan
    “This is a depth of political infamy not hitherto sounded.” One who takes even a passing interest in healthcare will neither drink alcohol, nor will he smoke tobacco. Or, he will find a way to quit. “In comparison with this, the thugs of India are as faithful friends and Judas Iscariot is entitled to a crown of glory.” Obamacare: government run healthcare like government run education, is a complete scam and a massive betrayal of the American people: http://theseedsof9-11.com
  • ryan10
    This was not covered by "the media" because it isn't news-worthy. You're taking something out of context, painting in fabulous colors, and throwing it at the masses. This out-of-context statistic was also brought up at the Healthcare summit and immediately clarified back into context by President Obama. Perhaps if you had watched the summit rather than joining the flame parade to discourage your audience from watching it themselves, you might have learned something.

    It's like if most people ate ramen noodles everyday for lunch because it was so cheap, then one day the government got together and made fresh fruit available at much lower prices. As a result, even though the fresh fruit was still slightly more expensive than ramen noodles, all these people started buying fresh fruit because of the great difference in quality. Now people's grocery bills are higher. While most people see this and move on, fringe media (like Fox News) sees an opening and...

    HEADLINE NEWS: Government TAKEOVER of food services RAISES your grocery bill!!!

    This is so common these days that it makes me very concerned for our country's future. A democracy requires an informed citizenry. A misinformed citizenry, as this kind of practice creates, simply will not work.
  • lorenso9825
    Oh, the lies! THE LIES!! "You can keep your health care." "No public funding for abortions." "Save 148 billion over ten years." "Americans are for this bill." And, we can make insurance cheaper by taxing the hell out of it!!
  • Harrison
    The public option will also ultimately put private insurance companies out of business because government has the taxpayer's deep pockets while private industry does not.
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