The Blog

Another Day, Another CBO Report

2:02 PM, Nov 30, 2009 • By MATTHEW CONTINETTI
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Sen. Evan Bayh, the Indiana Democrat, asked the Congressional Budget Office to look at how the Senate bill may affect the cost of health insurance premiums. You can read the CBO / Joint Committee on Taxation report here. Both critics and supporters of the Senate health bill have found data to their liking.

The CBO modeled the possible effects of the Reid bill on the health market in just one year, 2016, two years after the plan is set to begin. The CBO found that the cost of a plan bought on the individual insurance market is likely to rise, while subsidies may lower group-insurance premiums for that year. But it's hard to make sweeping generalizations based on this report, since it studiously avoids long-term projections. "The proposal could have some broader or longer-term effects on the level or growth rate of health care spending and health insurance premiums," the authors write. "Such effects could arise from several sources, some of which would tend to raise premiums relative to the figures cited above, and others of which would tend to lower them." Translation: We don't have a clue.

Still, the historical trend has been that, whenever a third-party is paying for medical services, overall spending tends to increase. And when consumers pay for medical services themselves, overall spending tends to decline. Both the House and Senate bills maintain the third-party payment structure, and indeed make the byzantine way Americans pay for health care even more complex through regulations, mandates, taxes, and subsidies.

Phil Klein has more here.